- Oct 1, 2018,
In part 1 of this blog series, I discussed the disconnect between Finance and IT when it comes to the timeframes and expectations for digital transformation initiatives as revealed by a new study by Dimensional Research. In this blog, I’m going to focus on the other key findings of the study as it pertains to the challenges and complexities of financial approval processes.
The research report is based on an online survey of over 400 IT and Finance decision-makers from enterprises with 2,500 employees or more. All respondents have responsibility for processes requiring approvals and/or applications used to manage approvals. In addition, they have active Digital Transformation initiatives for their Finance organizations.
The findings reveal several key takeaways:
Approval processes are slow, painful and inefficient:
- 90% of Finance and 97% of IT report challenges with existing approval processes.
- 100% say timely approvals are important, but 90% say it’s normal to have to send follow-up reminders.
- Executives know that their executive peers are the worst offenders for requiring reminders to complete approvals.
- 60% say a typical manager spends more than 5 minutes performing a single approval.
Issues with approval processes directly impact the business:
- 92% of respondents report impacts on operational efficiencies due to complex approval processes, leading to: Wasted time and general lack of agility, project delays, after-the-fact POs, “rubber stamping” of approvals, delayed reimbursements and more.
- Poor approval processes have a direct financial impact to the business, including: lost prospective customers, late payment fees, non-compliance costs, lost early payment discounts, and more.
New capabilities to simplify approvals would have direct benefit:
- According to stakeholders, the most valuable capabilities for simplifying approvals are: a consistent, easy-to-use interface and workflow across all types of approvals, a single login for all approval systems, integrations with existing applications, the ability to display the right amount of information to make an informed decision, and a consolidated list of all pending approvals from all systems.
- 98% of stakeholders say they would see direct business benefits as a result of consolidating approvals, including: faster approval cycles which would bring financial benefits, times savings from Finance in chasing down approvers, a reduction in the time managers would spend doing approvals, improved employee satisfaction and increased user engagement and productivity.
- 52% of respondents stated that they would save more than an hour per week if approvals were consolidated and easy to perform.
To get your complimentary report, click here.