the future of finance function
TRANSCRIPT
For full report please click:Future of Finance Function 2016
Sponsored by
The Future of the Finance Function Survey 2016
Survey Participants:
762Senior Finance Position:
77%Industries:
23
The Future of the Finance Function Survey 2016
Geography of respondents Number of Employees
% %
Figure 1. Figure 2.
As finance professionals we are facing some of the most demanding and challenging conditions for decades namely: striving to be better business partners nurturing new finance talent to meet the exceptional demands of the
digital economy guiding innovation standardising and automating core finance processes and linking
them to back office systems learning how to manage and analyse the burgeoning volume and
variety of data
Our study highlights that wherever finance professionals happen to be situated in the world, and no matter what industries they serve, we all share the same ambitions and hurdles. But the survey also points to the way forward.
So the key question is: how far have finance professional progressed along that modern finance journey?
This presentation will look at how much the role of the CFO has really changed; more broadly how the finance function is responding to the challenges of the digital economy and; finally what steps finance professionals need to take in order to make progress along the Modern Finance journey.
The changing role of the CFO is over-hyped
81% of senior finance professionals believe CFOs will be more influential in decision making BUT one third of CFOs are still making decisions based on 'gut feel'
The Future of the Finance Function, the great contradiction….
81% of senior finance professionals believe CFOs will be responsible for corporate data BUT almost two thirds admit they are struggling to master the variety and volume of new business data
The Future of the Finance Function, the great contradiction….
75% of senior finance professionals believe CFOs will play a greater role in innovation BUT two thirds currently admit they have too little time to spend on innovation and process improvement
The Future of the Finance Function, the great contradiction….
72% of senior finance professionals believe more CFOs will be responsible for technology BUT one third of CFOs are currently struggling to make the best use of technology
The Future of the Finance Function, the great contradiction….
77% of senior finance professionals believe the finance function will consist of fewer but more highly skilled members but 52% feel threatened by the automation and de-skilling of accounting processes
The Future of the Finance Function, the great contradiction….
CFOs are over-stretched
They are too bogged down in traditional accounting disciplines and this
leaves precious little time for satisfying the demands of their new role
or for nurturing their finance teams.
Two thirds, 68% say they don’t have time for process improvement and innovation
More than half, 51% say that they don’t spend enough time on business partnering and there is little time for pet projects.
Only 42%, of CFOs believe the finance function is perceived more positively by other business functions
Only 48%, of CFOs believe they are more actively involved in strategy development
Where is the CFO’s time going?....
52%
The percentage of CFOs that believe they spend too much time on….
Leaving not enough time for even the basics……
42%
32%
Half of CFOs, 50% believe they spend less time than they need on performance management than they ought to
In many cases, CFOs are ‘treading water’, unable to live up to the new expectations of the modern finance function because of a lack of time.
Process improvement and innovation, strategy development, performance management and business partnering are all under-served.
They need to start investing in their people to help them!
Finance functions who say that they invest strongly in their people are further down the line in the ‘Modern Finance’ journey than those who do not invest strongly in their people
Investing in people is essential to progressing along the finance journey…
… but less time in the hands of CFOs and their finance function means that people development is suffering.
The relentless march of progress, in the finance function and the roles of its senior members, has brought about a
change in the requirements of finance staff at every level.
Managing a team of traditional accounting staff is no longer the reality for most finance leaders. If CFOs are
required to be strategists, business partners, innovators, technology evangelists and financial stewards, they
need a wider arsenal of skills beyond the traditional accounting and management remit.
76% Invest strongly
43% Do not invest strongly
33% More
….. almost twice as likely to be engaged in creating business value
69% Invest strongly
25% Do not invest strongly
3x More
….. almost three times more likely to be actively involved in strategy development
CFOs whose finance teams invest strongly in their development are….
2x More
66% Invest strongly
27% Do not invest strongly
33% More
…..two and a half times more likely to be perceived more positively by other business functions
69% Invest strongly
25% Do not invest strongly
2x More
….. almost twice as likely to be more actively engaged in business decision-making
2.5x More
CFOs who invest strongly in their people are….
76% Invest strongly
43% Do not invest strongly
…..twice as likely to spend more time on business analysis and less on accounting
2x More
CFOs whose finance teams invest strongly in their development are….
33% More3x More
CFOs are struggling to recruit the skills required ….
2x More
33% of CFOs say they make decisions based on ‘gut feel’ rather than data, these organizations are more than twice as likely to respond too late to market change
Organizations who regularly find themselves making decisions based on ‘gut feel’ do so because they struggle to make the best use of technology with under ¼ of CFOs agreeing they make best use of technology
Unsurprisingly organizations that rely on ‘gut feel’ are half as likely to be able to forecast accurately
Crucially these organizations are half as likely review their strategy and their workforce are also half as likely to understand their organizational strategy
Although CFOs appear to be able to make decisions in the same timeframe regardless of whether they rely on management information or ‘gut feel’
CFOs underestimate the importance of process standardisation, automation and linking front office to back office systems, yet those that have fully achieved these goals
1. Are more likely to have liberated time
2. Are more likely to make quicker and more timely decisions
3. Are perceived more positively by other business functions.
4. have a better view of organizational performance and forecast more accurately.
Standardisation and Automation Trump Everything Else
The Importance of Standardisation
The Importance of Standardisation
Automation Standardisation Linking Front Office & Back Office Systems
Spend less time on transaction processing 30 36 26
Spend more time on innovation & process improvement 21 40 32
Are more actively involved in strategy development 26 40 33
Spend more time on business analysis and less on accounting 25 42 33
Make the best use of technology 58 58 46
Make quicker decisions 35 23 29
Are less likely to rely on gut feel 19 26 17
Forecast more accurately 25 22 27
Standardisation Automation Front to Back
Those that have completed the standardisation journey….
1. Standardisation 2. Automation 3. Front to Back
What is the most impactful approach….
When the impact of process standardisation, automation and linking front to
back office systems were compared, it was found that process standardisation
had the biggest impact of all, leading in six out of the eight criteria we
measured.
Once standardised, the impact of automation was to accelerate decision
making.
And finally…
Linking front office customer-facing systems to back office systems ensured that organisations forecast more accurately. Having information harvested from the sharp end of the business and merging it with financial information gave the deepest and most useful insights abut how the business was performing.
Thank you