Companies of different sizes generally have markedly disparate strategies and needs, but almost all want to modernize their businesses, in search of growth or at least remaining competitive.
Unfortunately for middle-market companies, many that desperately need modernization are hamstrung by data-quality and system-integration challenges that tend to be weightier than those faced by larger, deeper-pocketed enterprises.
“Fragmented systems and manual workarounds slow decision-making and erode confidence,” said midsized professional services firm Cherry Bekaert in its survey of 200 U.S. CFOs about their views on modernization.
Additionally, the firm wrote in its research report, poor data quality and misaligned tools limit agility. And, while nearly half of middle-market companies (defined as those valued between $5 million and $250 million) are using AI tools, their impact “depends on redesigning workflows, not just adding new technology.”
The research found more than half (55%) of the surveyed CFOs believe data accuracy and consistency issues are significant hurdles, while 48% pointed to integration complexity as the top challenge their company faces.
The goal for most such companies, according to Cherry Bekaert, is clear: Move from reactive reporting to the proactive generation of insights.
However, systems that don’t interact well with one another are only part of the problem. Budget realities, for one, are a major constraint. A third of middle-market companies allocate less than 10% of their finance operations budget to modernization initiatives, the survey found.
Cherry Bekaert noted most CFOs still view ERP implementation or upgrades as the quintessential “modernization play.” But, the firm stressed, ROI is realized the fastest not with big-bang re-platforming, but rather with harmonized data and modular integration.
What business areas are most affected by a lack of strong data to support critical decision-making? Two stand out from the pack: Financial planning and forecasting, and the monitoring of operational performance.
Among the surveyed CFOs, 40% said their current tools are insufficient for reporting and analysis, and only 37% rated their planning and forecasting tools as extremely effective. “Most mid-market organizations are still relying on outdated or poorly integrated platforms that were not designed for today’s pace of business,” Cherry Bekaert wrote.
Virtually all (99%) of the survey respondents said they plan to modernize their finance operations over the following 12 months. After the first priority of improving data quality and integration, respondents said they’re focused on optimizing finance technology and systems (775), streamlining accounting and finance processes (76%) and enhancing reporting capabilities (74%).
