Breaking the F&A gridlock: Finance leaders confront automation challenges

Despite the ongoing push for digital transformation and artificial intelligence, enterprises that rely on outdated technology, fragmented data use, and isolated processes create additional manual efforts. This hinders data-driven decision-making for finance leaders. To enhance the finance and accounting (F&A) workflow, forward-thinking finance leaders prioritize collaboration with IT to develop an effective data strategy, encourage cooperation between different functions, and invest in technology.

The HFS Pulse Chief Financial Officer (CFO) survey identifies the top 10 challenges in automating F&A operations (see Exhibit 1). Key issues include the lack of cohesion and collaboration between finance and technology functions and the absence of centralized data. These challenges highlight the need for technological modernization and solid, strategic leadership to realize the full potential of a ‘touchless’ F&A function—an optimized state where finance operations run seamlessly and autonomously, with minimal human intervention. Finance professionals can then shift their focus from manual tasks to strategic activities, using real-time analytics to make proactive, data-driven decisions.

Exhibit 1: Align tech leadership with business priorities to attain finance automation goals

Sample: 50+ CFOs
Source: HFS Research, 2024

Integrating outdated systems with AI-based platforms is like fitting a square peg into a round hole

Many enterprises rely on outdated legacy systems that fail to integrate with modern automation technologies, leading to manual and time-consuming processes such as reconciliation and reporting. In a conversation with a CFO from a leading US-based financial services firm, they mentioned that their current on-prem ERP system is a significant bottleneck. They plan to transition to a cloud-based ERP within 18 months for greater automation and efficiency. Until this upgrade is complete, manual work continues for tasks such as reporting and data management, as the existing system lacks the necessary agility for automation.

Outdated legacy systems pose a significant hurdle to automation because they aren’t designed to integrate with modern technologies. Enterprises must upgrade or replace these systems to fully leverage automation tools. Finance and technology functional leaders can collaborate to streamline the workflow and automate the process, creating a single source of truth.

Organizational siloes continue to cripple automation progress

Automation is most effective when organizations use high-quality, integrated, scalable systems with the proper infrastructure and talent. Some barriers include a lack of collaboration between accounts payable (AP) and accounts receivable (AR), as well as procurement, sales, and marketing functions. Addressing these issues is essential before automating processes; otherwise, errors will still require manual corrections, defeating the purpose of automation.

Our biggest challenge wasn’t the technology itself—it was breaking down the silos between departments. Automation only works when everyone is aligned, and that starts with getting our data and teams on the same page.

— CFO from a leading US-based financial services firm

This initiative requires direction from C-level executives and collaboration among various departments to achieve productivity. For instance, a CFO from an Indian pharmaceutical company saved several million dollars by reducing the marketing budget for one of the firm’s nonperforming products. The CFO collaborated with the marketing, R&D, and sales teams and utilized external data sources to assess the market potential of each product. This assessment included analyzing historical data, projected trends, and structured and unstructured financial and non-financial data points. Based on these insights, the marketing budget was effectively allocated to the product managers.

Cloud infrastructure, AI, and machine learning will change the dynamics of F&A—but the value is not as expected

CFOs must adopt a step-by-step approach, prioritizing cloud migration and AI-driven solutions to tackle finance automation challenges. Cloud platforms offer scalable, integrated systems that replace outdated legacy infrastructure, enabling real-time data access and enhanced decision-making.

AI can automate routine tasks such as invoice processing and reconciliation while offering predictive insights for more complex functions such as financial forecasting. Additionally, process mining can pinpoint inefficiencies, optimize workflows, and focus automation efforts where they can deliver the most value.

However, technology alone isn’t enough—change management is essential for overcoming organizational resistance. Clear communication, comprehensive training, and reskilling initiatives are crucial for helping finance teams adopt new tools and embrace innovation.

Key recommendations to accelerate F&A automation for a strategic impact

Enterprise stakeholders, investors, suppliers, and employees expect CFOs to share insights on various aspects of the business, such as key growth drivers, key performance indicators (KPI), reasons for decline, and many other areas. Delivering quality insights to various stakeholders involves embracing technology and automation, diving deep into data sources, and understanding patterns to make informed decisions. Achieving this level of analytics involves executing critical tasks using the OneOffice approach and building OneEcosystem in the F&A world.

• Collaborative leadership: Form cross-functional teams of finance, IT, and operations teams to align automation goals and ensure smooth implementation.
• Combine key drivers and KPIs: Combine the critical drivers, including customer base, consumer behavior changes, new technology, and free cash flow, and connect them with enterprise performance.
• Continuous learning: Promote ongoing learning and upskilling in automation technologies and data analytics to enable the team to adapt to new tools. Data feeding is the most critical task for CXO decision-making.
• Connect the ecosystem partners: Leverage third-party providers that bring innovative platforms to the F&A automation journey. For example, IBM installed GenAI-based F&A automation orchestration platforms that automated between 50% and 80% in record to report and bill to cash workflows.

Automation is not about replacing people—it’s about empowering teams to focus on strategic, high-value activities by eliminating repetitive tasks. The key is to start small, prove the value, and scale gradually.

— CFO from a major global manufacturing firm.

The Bottom Line: Finance automation won’t scale until outdated systems are modernized, data siloes are broken down, and IT becomes a strategic partner. To reach the “touchless” state, finance must simplify first, automate smartly, and scale rapidly. Modernize now, or remain stuck in manual mode!

Staying ahead of technological advancements is essential for CFOs to leverage these innovations and effectively drive the company’s growth agenda. If they don’t, the finance function risks remaining manual and stagnant. The key steps are to simplify processes first, then automate them, and finally scale rapidly. This approach will create a future-ready finance function that meets the expectations of investors and the organization.