Federal agencies need fast, trustworthy financial data to manage risk, adapt to change, and connect spending to mission outcomes. But MeriTalk’s new Future-Ready Finance report, underwritten by Workday Government, shows many finance teams are still dealing with fragmented systems and manual workarounds that make confident decision-making much harder.
MeriTalk recently sat down with Annamary Holbrook, director of federal solutions consulting at Workday Government, to discuss what the findings mean in practice. She explained why real-time visibility remains elusive, where meaningful progress is starting to emerge, and what federal chief financial officers (CFOs) should prioritize next to build more mission-aligned financial management.
MeriTalk: In this new research, federal finance leaders point to a consistent gap between the need for real-time financial insight and what agencies can deliver today. How closely does that align with what you’re hearing from federal finance teams?
Holbrook: It’s what I hear every day, all day. I was just talking with a financial team about the lack of transparency and trust in their system. Teams are still working with static information, and many are relying on spreadsheets outside their systems just to get to something usable. But even then, they usually do not feel confident that what they are working with is complete or accurate enough to share broadly. In some cases, finance teams are hesitant to share their budgets with managers because they know the data is not right and is not presented in a way leaders can easily understand.
MeriTalk: The data shows just 12% of federal finance leaders can consistently provide real-time data to their leadership. More than half, 55%, say reports are outdated by the time they’re shared. Why is real-time finance still so difficult in government? What are the underlying barriers agencies need to address?
Holbrook: Real-time finance is hard because the government is trying to meet modern expectations on top of very old foundations. Many of these systems were built decades ago, and now, while they might have a new user interface layered on top, the underlying technology/design is crude compared to most any modern system. When agencies export data into warehouses or lakes for analysis, the connection to the supporting details is lost, and errors are introduced. Federal accounting rules are already more complex than commercial financials, and agencies are managing that complexity across disconnected systems for general ledger, procurement, budgeting, accounts payable, and more. The design is rigid, not dynamic, and that makes it very hard to layer analytics or artificial intelligence (AI) on top in a meaningful way.
There is also a structural barrier. The Office of Management and Budget (OMB) and the Department of the Treasury each influence different parts of the process, but their systems and processes aren’t aligned. Add to that the amount of institutional knowledge tied up in long-tenured staff, and it becomes even harder to transition to something new. That is why getting to real-time finance is bigger than a software refresh. It requires a complete reset in how federal financial management works.
MeriTalk: Finance leaders estimate they lose 35% of their time to manual reporting, fragmented tools, and data inconsistencies. Where are you seeing legacy systems create the most friction, and how is that impacting agency missions?
Holbrook: Honestly, I am surprised the number is only 35%. The biggest friction points show up wherever agencies try to stitch together disconnected systems. I have seen organizations feel confident only because they hired someone to build a custom application that connects their systems for a moment in time, but that is not scalable. The minute a source system changes, that integration can break, and then the agency is right back to depending on one person and one fragile workaround.
The mission impact is that leaders never fully trust the numbers. If you do not know where money is going, where needs are rising, or what trends are forming, you cannot allocate funding confidently or respond intelligently when priorities shift. When agencies are told to add funding in one place or cut it in another, they need to know where the need is greatest. Too often, they are making those decisions on shaky data. And if the financials are not right, it is very hard for the workforce side of the mission to be right, either.
MeriTalk: Many agencies are still working across disconnected finance, human resources (HR), procurement, and program systems. What distinguishes organizations that are successfully building a single, trusted data foundation from those still struggling with siloed data?
Holbrook: Frankly, I have not met an agency that has fully solved this. The organizations making real progress recognize that simply moving old systems into a hosted environment does not eliminate data siloes or complexity.
Too often, the government celebrates cloud transformation, but it’s just shifting the same issues into a new environment.
In a true software as a service environment, the vendor takes care of the underlying services such as disaster recovery, updates, scaling, and core protection, while the agency configures the environment to meet its needs. That changes the ownership model and reduces the operational burden that often keeps data fragmented.
MeriTalk: Building on that, where are you starting to see meaningful progress in federal finance modernization, even if agencies aren’t fully future-ready yet?
Holbrook: The encouraging sign is that there is a desire to learn. A new generation of leaders and staff is coming in with commercial experience and with a much higher expectation for agility, accuracy, compliance, and confidence in data. Agencies are also making progress in small pockets, whether that is budget work, procurement improvements, or strategic sourcing efforts.
The challenge is that most of that progress is still happening through the deployment of point solutions that have to then be configured and connected to old technology, not through a coordinated, end-to-end finance transformation. Until the risk of the current systems is severe enough to be felt and acknowledged – whether the risk is data inaccuracy, improper payments, weak controls, or low confidence in timeliness – the status quo keeps winning. Federal finance needs the same kind of top-down push and education that other modernization efforts have received.
MeriTalk: Nearly all federal finance leaders, 96%, believe responsible AI can significantly improve financial accuracy and oversight. Where do you see the most practical near-term opportunities for AI in federal finance?
Holbrook: Near term, the most practical AI use case is anomaly detection. Agencies can load large volumes of historical data, whether that is contracts, transactions, maintenance records, or other sources, into tools that compare across multiple inputs and surface patterns that deserve attention. That can help teams find issues faster and get quick wins from data they already have.
Where agencies still struggle is moving from reactive to proactive. AI can help spot what has already gone wrong, but it is much harder to use it in a truly forward-looking way when the underlying data remains fragmented and delayed. That is why the promise is real, but the operational constraint is still the architecture underneath it.
MeriTalk: Looking ahead, where should CFOs focus over the next 12 months to make meaningful steps toward more real-time, mission-aligned financial management?
Holbrook: CFOs should focus on two tracks at the same time. First, they should pursue practical point solutions now in areas such as planning, sourcing, contract management, procurement, and other automations that can expose teams to modern technology and help them start working differently. Those wins matter because they build familiarity with better tools and create space for agencies to modernize day-to-day practices.
At the same time, leaders need to step back and look at federal financial management with a fresh lens. That means educating decision-makers and the next generation of finance leaders on what is possible today, not just what is necessary to meet the expectations of the past.
They also need to be honest about the full cost of keeping legacy environments alive. A lot of that burden sits in IT, which is often responsible for maintaining outdated on-premises systems, preserving the institutional knowledge needed to support them, and stitching together reporting layers, integrations, and crosswalks across multiple systems just to produce usable information. That ongoing spend in people, support, and custom work is easy to overlook, but it is another reason modernization should be viewed through a long-term return-on-investment lens, not just as a technology upgrade.
Overall, real change also has to come from the top, with OMB, Treasury, and other federal stakeholders working together to drive federal finance forward.