the future of finance function

The Future of the Finance Function Survey 2016

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For full report please click:Future of Finance Function 2016

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Survey Participants:

762Senior Finance Position:

77%Industries:

23


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


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


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


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


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


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


33% More

…..two and a half times more likely to be perceived more positively by other business functions

69% 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


…..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


the future of finance function

Economy & Finance