What to consider when
evaluating new finance
software in 2024

CFOs are embracing a new mandate to go beyond cost savings and add more value to their organizations in 2024. Finance stack upgrades are at the top of their agenda as they embrace a more strategic, technology-focused role.

But deciding which software platforms to implement can be daunting. So to assist in better evaluating your options, here’s an overview that we hope will be helpful.

Beyond cost savings: The strategic role of finance software

By and large, finance departments have managed to reduce their costs in the past decade or so without hampering performance. Having successfully trimmed the fat, CFOs are now shifting their focus to adding more value to their organizations.

Present-day software empowers finance teams to proactively add value through improved forecasting, scenario planning, and predictive analytics. As BCG notes, “To become a true value driver, finance functions must cultivate additional skills through partnerships with other functions [and] new digital and data capabilities.”

While emerging technologies like AI-assisted forecasting offer numerous opportunities for finance teams to enhance their value, the abundance of options has made choosing which platforms to add or subtract from their finance tech stacks harder than ever.

Here are the essential criteria for evaluating the right software for your organization:

Ease of use & integration

Having disparate systems that struggle to talk with each other can easily lead to miscommunication and data silos. In contrast, finance software that establishes a single source of truth allows everyone in the organization to get on the same page, unlocking powerful possibilities.

Integration with enterprise resource planning (ERP) systems is particularly important, for several reasons:

  • Being able to pull actuals allows you to view real-time data, eliminating lags and improving forecast accuracy
  • Eliminates error-prone manual data entry and report pulling
  • Boosts financial transparency 
 

For example, a Finario customer in the food and beverage category found Finario’s ease of use and integration with their existing systems to be a “total game-changer.” They’ve come to realize direct cost savings —such as reduced capital project cost overruns—but the bigger impact has been the finance group’s ability to better execute on the organization’s strategic vision. The single source of truth provided by Finario has enabled all their plants to use one cohesive forecast, eliminating confusion and ensuring they’re all pulling in the same direction.

Scalability & flexibility

As the past several years have shown, adaptability is invaluable; technological disruptions and external factors can reshape the business landscape on a dime. Going forward, your financial software should empower the organization with the flexibility to adapt to internal and external shifts and support agile decision-making.

Internally, systems should have the flexibility to adapt to increased scale. Growth is a good thing, but managing increased volumes and diverse lines of business can strain rigid systems. To avoid such challenges, consider implementing solutions that seamlessly scale alongside your company. This approach ensures smooth operations during periods of rapid expansion or when entering new markets while maintaining the agility needed to navigate changing landscapes.

This agility extends to optimizing your capital portfolio in response to external shocks. As highlighted in Gartner’s report3 Principles for Allocating Capital Across Enterprise Strategic Investments,” adopting a ‘capital activist’ approach is key to revamping your Capex portfolio based on changes in your external environment and maximizing its value over time. Essentially, this means continually reassessing where the highest growth opportunities are within your organization and allocating resources accordingly. Capital activism promises a higher ROI on your capital investments, but it also entails constant change within your organization. Thus, having systems that can adapt to this change is essential.

AI, automation and advanced analytics

As Forbes put it, finance departments will follow the “Elvis rule” in 2024: a little less conversation, a little more action. Simply talking about implementing AI is no longer enough. Market leaders have already integrated it into their operations, and are getting further ahead every day.

Fortunately, many software solutions on the market allow you to incorporate AI into your finance function. For example, by leveraging your existing data within your ERP, platforms like Finario provide predictive analytics that help you see what’s around the corner.

Other than advanced analytics, AI-powered automation can make your finance team a whole lot more productive. By taking care of routine tasks like invoice processing and pulling reports, your finance staff can focus on more value-added activities like engaging suppliers and delivering valuable insights to the business. Within capital planning specifically, workflow automation from Finario allows your team to spend less time chasing down approvals and more time making progress on their projects, while establishing a clear audit trail throughout the process.

Cloud functionality

As their quantity of data continues to explode, many businesses are looking to cloud-based solutions to support their financial processes. One survey found that cloud-based apps were an even higher priority than AI among executives.

While some businesses still prefer on-premises solutions, cloud-based apps are soaring in popularity for a number of reasons, including:

  • Real-time access and collaboration: Cloud-based finance software enables real-time access to financial data and tools, regardless of location. This facilitates better collaboration among team members and stakeholders, leading to more informed decision-making and effective teamwork.
  • Cost-effectiveness: Cloud solutions can be more cost-effective than traditional on-premises software, since they typically require lower upfront investment and reduce the need for in-house IT infrastructure and maintenance.
  • Integration with other systems: Cloud-based finance software tends to offer better integration capabilities with other business systems, leading to streamlined workflows and increased automation of finance processes like invoicing, approvals, and budgeting.

 

Deciding whether to use cloud-based or on-premises systems depends on your company’s unique needs. Learn more in our blog on choosing between cloud-based and on-premises applications.

Security & compliance

Given the evolving digital landscape and increasing number of cyber threats, in 2024, having finance software that protects your data is non-negotiable. According to Gartner, 41% of businesses have security top of mind when buying software, and find it difficult to identify the right apps for their needs.

So, what security features should they look for? Ideally, finance software platforms should have continuous threat monitoring, data encryption, and flexible control over each user’s access to maintain the highest security possible. Moreover, they should be independently audited and certified according to the widely-trusted SOC standard.

Gartner’s survey also found that 72% of businesses are set to spend more on finance software in 2024 than they did in 2023, with security as a top priority. To make the most of your investment, ensure that the applications you bring into your stack have the maximum level of security, operate well with your other systems, are flexible enough to change with your business, and bring in the latest AI-driven functionality.

Hear more about it at NAFES 2024

Selecting the right finance software in 2024 is a multifaceted decision with critical implications. The upcoming NAFES 2024 conference will further explore these themes, especially during the “5 Common Mistakes Finance Teams Make When Evaluating New Software” session.

We’ll have a booth all week at the conference, and look forward to seeing you there! If you’re planning to attend, we’d love to walk you through a demo of our platform ahead of time. Click here to get in touch.