What to know about Finance and IT in 2025
By Bert van der Zwan, CEO of Onguard
We’re always anticipating the future. We do it both in our personal lives and in business. Looking ahead can help us in making the right decisions. Formulating a long-term vision and steering the company towards it is part of a director’s job. What will the market look like six years from now? What developments need to be factored in? And how do we ensure that our company keeps adding value? No one knows exactly what the future holds, but it’s important to be aware that the decisions we make today help determine the future. Therefore, it’s good to put some thought into it. What will the world of finance and IT look like in 2025?
The ‘one-size-fits-all’ approach is obsolete
Suppliers like SAP and Oracle have traditionally dominated the world of enterprise software. These companies became massively successful by supporting all business processes, and organisations were effusive in their praise. However, today there is a greater need for specialist software. Rather than committing to an all-in-one supplier, companies are more likely to select ten suppliers, all with their own specialist software offered in the cloud. This enables companies to assemble a unique set of standard software packages to optimise business performance. Specialist software suppliers can also link software packages through the use of APIs, so we are seeing a proliferation of hybrid cloud solutions.
Personally, I think it’s preferable to purchase specific tools, such as payroll software, from specialist suppliers. It is a bit like going into hospital. If I need brain surgery, I don’t want to be operated on by a general surgeon, I want a brain specialist. It’s the same when it comes to software. The ‘one-size-fits-all’ approach is obsolete in today’s market. In my view, vendors such as SAP are general surgeons. The smaller and more specialist players are the brain surgeons.
Online cooperation shell
These small software specialists are now partnering with other small specialists all over the world. They are creating a complex web of data and connections that will soon become unsustainable. To make it sustainable, there needs to be a layer that interfaces between interacting software applications: an online cooperation shell that acts as a data transfer interface. This has the advantage of eliminating the need to link applications because the shell transfers the necessary data from application A to application B.
Think of payroll software, for example. The general ledger must reflect the financial information contained in payroll records. A shell that interfaces between the applications can transfer the necessary data from the payroll tool to the general ledger. In other words, the shell is an intermediate system that connects separate applications. This trend is gaining momentum and is expected to take off in the next two years. If we look ahead to 2025, I am confident that this approach will be firmly established and that conventional all-in-one ERP solutions will be a thing of the past.
From production associate to knowledge associate
Deloitte recently issued its ‘Crunch time V’ report, outlining its predictions for the financial services industry in 2025. There is so much happening in the world of finance. Everything is going real-time, self-service will be the norm and finance professionals will be doing new things in new ways. Finance departments can now report on current status with increasing accuracy. At the moment this happens about 70% of the time. Financial applications that provide real-time data are making traditional financial cycles less relevant. There is less call for monthly financial statements and business performance reviews when real-time data can be accessed instantly from any location. This is the answer to the growing need for financial figures and information that enable CFOs and directors to quickly respond to the market.
The availability of real-time information, among other things, will mean that finance professionals are required to perform a different range of tasks. Administrative tasks and processes will be delegated down the line and carried out partly by software. The emerging self-service trend is expected to be well established in the world of finance in 2025.
It has been happening in HR for some time. Rather than being handled by an HR professional, the concerned employee now enters their own sickness absence, which is the department manager monitors. And it is increasingly being introduced in finance. For example, when invoices for events organised by the sales department need to be paid, the sales manager enters the invoices in the system using standard invoice processing and financial control protocols. The controls embedded in the systems ensure that the finance department is kept up to date and remains in control of entries other departments make.
All of these trends suggest that the role of finance professionals will change from production associate to knowledge associate. Rather than being finance controllers, they will act more as business controllers and become real business partners for the CFO. Finance professionals will certainly not have disappeared by 2025. Far from it! Their range of duties and responsibilities will be considerably more challenging. I, for one, am excited about what awaits us six years from now.