How Millennials Impact Finance Technology Adoption

MILLENNIALS and Businessman drawing Landing Page on white background, reflecting How Millennials Impact Finance Technology Adoption.

Millennials are about 80 million strong and soon to become two-thirds of the workforce. Their relationship with technology is different; unlike previous generations, they grew up in a time when the widespread adoption of technology has accelerated from years to minutes. According to Christine Hollinden, founder of Hollinden Consulting, that fact has impacted how they communicate, as well as how they want to do business. “They’ve been exposed to more of everything—information, options, advancements, technology, and cultures,” she said. This means they are hungry to try out new tools and are not satisfied with the status quo. 

As finance transforms through the automation of low-value tasks and the adoption of advanced analytics, ”millennials can step up,” said Darpan Agrawal, director, finance business partner/controller, APAC at Philips Lighting. “They’re not afraid and are less reticent to adopt change than older generations,” he said. Added Rich Wagner, CEO at Prevedere Software: “Their expectation is that data should be immediately and readily available to them in a usable format. They want to reduce the disconnect between the time it takes to ask the question and get to the business decision.”

Now millennials are starting to move into more influential positions. “As they do, their demands and requirements of technology are much higher than previous generations,” said Phil Pettinato, chief technology officer at software-as-a-service (SaaS) treasury vendor Reval. “They’re looking for accessibility; they want to use technology wherever they are and on different devices. They want to work when they want to work, not in a rigid working environment.”

That’s one big reason vendors are seeing the rate of adoption of SaaS solutions picking up. The Adaptive Insights CFO Indicator Q1 2016 report  shows that CFOs expect to double their adoption of cloud technologies in the next few years. CFOs estimate that 33% of their IT infrastructure is SaaS today, and they forecast this rate to grow to 60% in four years.

That’s an important statistic for the younger generation because cloud solutions are the only way to provide the infrastructure to support three important millennial traits:

1. The propensity to work in groups and collaborate on projects: They can effectively work with team members at remote locations.

2. Their desire to maintain a strong work/life balance: They can work from home when they want to.

3. Their push for adoption of new technologies that can be deployed fast and updated regularly: SaaS solutions have a much shorter implementation life cycle, and the software features are updated remotely without disruption to the business.

Six ways millennials affect the rate of technology adoption

1. Shorter adoption cycle. Technical skills among millennials and low barriers of entry for new cloud/SaaS-based software have reduced the amount of training vendors need to offer. These days many users hit the ground running with fewer dedicated one-on-one sessions. That’s partly because millennials are digital natives and partly because technology itself has advanced to become more intuitive and visual.

2. Expectations of continuous improvement. “What stands out the most is an expectation that things will change,” said Bob Stark, vice president of strategy at Kyriba. “The newcomers into this space expect things not to stay the same. They’re not just interested in technology for the sake of technology or automating things the way they’ve been done before.”

3. Innovation from within. Technological innovation no longer originates only in the IT department. Now, Wagner sees it coming from inside the finance group as millennials themselves are coming up with new improvement ideas. “The business has become more empowered,” he said. The younger generation has less tolerance for waiting for others to get things done, according to Pawan Murthy, Prevedere’s senior director of marketing.

 4. Demanding better user experiences. According to Reval’s Pettinato, “Millennials are also looking for new user experiences and new ways of solving problems that can only happen within a SaaS environment, where everyone is using the newest version of the software.” Previously, companies installed software and often didn’t update or upgrade as long as it was working. “This new generation is looking to embrace change, to keep up with technological changes, in order to do things better,” he said. “A lot of that comes from their personal lives, where they’re used to looking for the latest and greatest technology to collaborate in the social world. They embrace change rapidly and are not afraid of taking on some of the responsibility of using this new technology to improve their work.”

5. Build software for multiple devices. Another challenge is that in the past, software was built for one specific device, mostly the desktop. Now it must be built for multiple devices: desktop, tablet, phone. “You have to right-size the features and build a platform for all of these user interfaces,” Pettinato said.

 6. Smaller deployments. “The previous generation was involved with very large deployments, with periodic milestones that took a long time before they showed any returns,” Pettinato said. “Now, companies driven by millennials are looking for immediate returns.” That’s where cloud-based solutions are very helpful. The software is already running and comes preloaded with historical data, saving weeks or months of work.

The upshot

For tech vendors, the new generation of finance professionals is good news. They’re pushing their employers to adopt newer and faster technologies. They’re pushing their vendors to make the user interface more intuitive. They learn fast, reducing the implementation cycle time, and are quick to “play” with the new system, leading to faster ROI. According to Reval’s Pettinato, the result is a benefit for everyone.

 Nilly Essaides is the director, FP&A practice, at the Association for Financial Professionals.

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