Finance Vs IT
What is the relationship between?
Nowadays the new technologies define the increasing number of requirements towards employees' skills and experience. Our country is no exception - the differences between professions become less defined. The demand is the highest for "jacks-of-all-trades" that can do everything and even more. However, the majority of these people aim at working for IT-companies even if in finance.
We would like to talk about these business trends using the example of finance experts and similar economics professionals. Why do finance people need to understand the specifics of IT and use some technologies in practice?
We talked to an expert in contracting who works for an FMCG-company from the tobacco industry to immerse ourselves in the topic. Our text was written based on the real experience of a financial expert who often wants to partially automate her work and start working for an IT-company in the finance department.
Some 10 years ago it was exceptionally fashionable, prestigious and expensive to study finance at the university. The society had a picture of successful financial analysts and many still have it. It was thought that a financial analyst is a person who knows everything about numbers and beyond, is a star of the business environment, has a stylish suit and lucrative wage from the first working day.
The same stereotype is still alive today. It is supported by the background of parents who graduated in economics-related fields and did not realize yet that the peak of demand for these professions has passed.
However, when recent graduates are searching for a job, it becomes clear: the knowledge obtained at the university is no longer relevant to the market. In IT technology classes they were shown how to open MS Excel and use Lookup function, which is unlikely to impress the managers. The methods of working with numerical data popular in 1960-s definitely won't help in processing and understanding the principles of Big Data.
Finance analyst 5 years ago vs finance analyst today
Some 5 years ago an advanced expert was drastically different from her colleague today If you were good at numbers, could estimate and prove your data to be reliable, were able to speak English at the Intermediate level, had developed presentation and communication skills, you would be considered an excellent expert. Those who had some experience of working with 1C software were hired immediately. A candidate without any knowledge of software products would not be rejected as the companies were ready to train new employees and show software interfaces.
Nowadays the employers expect finance analysts to have an ACCA certificate, advanced knowledge of SAP, 1C (and other similar software), forecasting skills using suitable software, highly developed analytical thinking, knowledge of English at the Upper Intermediate/Advanced level, as well as to have basic knowledge of Python.
The key issue here is that over those 5 years the employees did not get to the same page with employers and clearly do not understand how to acquire this "toolbox". Here is where the search for various workshops training offering the necessary skills stems from. It is also behind the desire of more experienced candidates to earn a higher salary in exchange for a suitable set of skills.
What are the problems for experts?
1. Processing Big Data in MS Excel
All financial analysts may have a spreadsheet with data on clients, financial flows, payments, outstanding amounts, relationships status etc. Multiple data in the cells based on complex formulas that regularly return errors and force the experts to fill out the data again. Data from Excel spreadsheets is usually manually loaded to SAP, 1C and other packages, which can also lead to system failures including the freezing of software and computers. Although it seems impossible, Excel may even run out of lines.
2. Wasting time of routine interactions
Again and again we are talking about lack of teamwork opportunities in Excel. When there are more than two financial analysts in a company, they have to negotiate the order of adding the data to the shared file. Otherwise, an employee may accidentally delete the changes made. The process of sending the updated file by email is adding another level of complications.
3. Lack of a consolidated system
When talking with our interviewee we realized that it is beneficial to have SAP along with 1C in a company. For many companies SAP is a luxury due to the high cost of the licenses and complexity of introducing it. But even if it is in place, the software is not used to the full extent. We got a very broad answer to the question of why experts struggle with excel only to manually input the data to SAP afterward. There is the software but there is no one able to show how the process can be optimized.
Financial analysts feel the acute need in a single automated system to be able to check the required data on demand: whom to pay, who was already paid and who owes to the company. Such a system is capable of minimizing human errors and avoiding the situations when at the year-end it turns out that someone was not paid or paid too much.
4. Documents circulation issues
A lot of time is spent on continuous editing, formatting and emailing of documents, the need to monitor that the final version of the file is up to date and that the updated document was not lost in the infinite stream of emails. Besides financial analysts want to automate the financial business processes.
5. Communication issues with IT department
Oftentimes setting a problem to an IT employee turns into a nightmare for the financial expert. To automate a simple task (for instance adding the client's bank details automatically when typing the company name) financial analysts draw infinite schemes and describe in writing what the outcome should be. This is made several times until the outcome fits the purpose. They acknowledge that had they had some understanding of how to implement this, it would be much easier to make themselves based on some system. Not involving the IT department.
6. Low wage level as compared to IT companies
No secret that the first association for many people is IT = money. On average the wage of a senior financial manager of a large multinational company is $1,000-2,000. This is conditional on fluency in one or (better) two foreign languages, 5+ years of experience, knowledge of numerous systems (SAP, 1C, Medoc, etc.), continuous upgrade of technological skills, and perfect communication skills. An employee with a similar CV can earn a double or even triple of that in an IT-company
How can IT technology help financial analysts?
We will show how to structure and automate financial business processes on the example of payment scheme among the companies within the group.
When we started introducing the ERP-system at one advertisement agency we faced chaotic financial processes. It made no sense to automate the financial business processes as they were.
We undertook a detailed business analysis, figured out how the existing schemes and relationships worked and proposed a new mechanism of payments distribution.
After structuring the financial processes, introducing the ERP-system and partially automating routine tasks, financial analysts felt the improvements.
It is possible to master any technology and automating finance using IT technology and leaving infinite routine tasks behind is no exception. All it takes is the desire of the experts to learn about the new field and people who can help.
If you saw yourself in this article and faced these issues in your work, want to be more competitive than you used to, welcome to our course Financial manager for financial analysts / economists/ accountants.
We will demonstrate the ERP-system, show how to automate managerial accounting using it, get rid of infinite struggles with transactions and solve many more problems faced by financial analysts and economists.