There’s a widespread intent from financial organisations to invest in emerging technologies in the next three years, with cloud enterprise resource planning (ERP) being the most favored choice, according to Gartner.
“Many finance organisations are trying to figure out the digital landscape and ways to identify and execute cost savings opportunities in order to allocate more funding to digital initiatives,” says Dan Garvey, vice president in the Gartner Finance practice. “As with many business functions, Covid-19 has accelerated the pace of finance investment in digital transformation.”
While digital transformation has been a major priority for finance organisations in the past, the pace of transformation has materially changed.
“Digital investment and transformation are no longer things that chief financial officers (CFOs) can take a ‘wait and see’ approach on or throw small investments at. The time is now, and CFOs need to act swiftly,” says Garvey.
Advanced data analytics, data storage, and robotic process automation (RPA) were all likely areas for investment in the next three years, while artificial intelligence (AI) and blockchain were less common responses.
“It’s not surprising to see cloud ERP as the top choice for finance organizations because it is a maturing technology with clearly established benefits that offer an escape from the bloated ‘monolithic’ ERP systems of yesteryear,” says Garvey. “Advanced analytics, data storage and RPA are also all established technologies with well-proven use cases in finance.”
AI and blockchain, however, are not so well-established and for many finance organisations would pose bigger implementation problems and a less certain return on investment. Moreover, it is possible to get some exposure to the potential benefits of AI without investing directly.
“Many cloud ERP and advanced analytics offerings are increasingly offering embedded AI capabilities, and that neatly solves many challenges around integration and in-house expertise,” says Garvey. “There’s no doubting the potential of building your own AI, but is the finance organisation capable of realizing that potential.”
Blockchain also has great transformative potential, but right now out-of-the-box use cases are also limited and not applicable to most of the work that the finance organisation conducts. The size of the business in revenue correlates closely with its propensity to invest in AI, blockchain or the Internet of Things (IoT).
“This is likely in part because of the sophistication of an organisation’s IT infrastructure,” says Garvey. “Implementing AI, blockchain or IoT is unlikely to be simple, and there are lower hanging fruit for most finance organizations that want to drive meaningful gains with emerging technologies.”