The Future of Finance Function 2016 survey sponsored by Aptitude Software.
An insight into the changing role of the CFO and what can be done to ease the transition.
VIP Independent Call Girls in Bandra West 🌹 9920725232 ( Call Me ) Mumbai Esc...
The Future of Finance Function
1. The Future of the
Finance Function
Survey 2016
Sponsored by
2. For full report please click:
Future of Finance Function 2016
Sponsored by
3. The Future of the Finance Function
Survey 2016
Survey Participants:
762
Senior Finance Position:
77%
Industries:
23
4. The Future of the Finance Function
Survey 2016
Geography of respondents Number of Employees
% %
Figure 1. Figure 2.
5. 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
6. 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.
8. 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….
9. 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….
10. 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….
11. 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….
12. 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….
13. 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.
14. 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
15. 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!
16. 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
17. 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.
18. 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
19. 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….
20. 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….
22. 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’
23. 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.
26. 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
28. 1. Standardisation 2. Automation 3. Front to Back
What is the most impactful approach….
29. 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.
30. 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.
The survey was completed by more than 760 senior finance professionals from across the globe, in 23 industries, making it one of the largest and most authoritative studies of its kind in 2016 and it didn’t disappoint in terms of its findings.
(good)
As finance professionals we are facing some of the most demanding and challenging conditions for decades – what I call the modern finance journey - namely:
• striving to be better business partners
• nurturing new finance talent to meet the exceptional demands of the digital economy
• guiding imaginative strategies and 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. In this webinar we 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
(need new slide for info)
Thousands of column inches are devoted daily to the changing role of the CFO. These changes have been foisted on them by rapidly changing consumer behaviour, new technology-infused business models and an ever-changing competitive landscape. While many have travelled a long way on the modern finance journey, our research shows that there is a significant gap between perception and what is happening on the ground. There are significant contradictions between where CFO’s want to be and where they actually are.
(include more info on this slide)
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‘
That is not to say that there isn’t a place for professional judgement and experience but within a complex financial role, decisions must stand up to scrutiny, during and after the event, and should be grounded, substantially, in hard evidence. When the balance between hunch and hard data is off, credibility is lost and finance leaders risk leaving themselves and their organisations exposed to reputational and financial risk.
(good)
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
Data volumes are roughly doubling every two years. In fact so profound is the potential impact of so called Big Data that the World Economic Forum considers it to be a new class of economic asset, akin to human capital and natural resources such as oil and gold. It’s not so much the volume of data that is causing issues but the variety of new data.
Increasingly, the ability to harness ‘unstructured’ data such as commentary and other text-based information in social media, tweets, emails, blogs and websites is adding to the richness enabling deeper insights than ever before. But few CFOs today are well positioned to take advantage of the profit opportunities afforded by data – something that comes through strongly in the survey.
The inability to master the variety and volume of new business data is a serious threat to the future finance function.
(good)
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
And
(good)
The modern CFO, who is increasingly trusted with making technology decisions, has to walk a tightrope between overseeing investment in emerging technologies to deliver new services to customers and leveraging new technologies to support the business on the inside. But this unique positioning also gives CFOs exceptional visibility into technology advancements and how they can be used to accelerate change, especially around the way that the modern finance function supports other decision makers, functions and stakeholders.
(good)
The right technology investment can liberate time. Automation and standardisation frees up well qualified personnel for retraining into higher value roles. CFOs know this is happening. 77% of senior finance professionals believe the finance function will consist of fewer but more highly skilled members. Yet over half say that automation and de-skilling of the accounting process is a threat to the future finance function.
(good)
Put bluntly, 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.
(put more info on slide)
Our research finds that CFOs are over-stretched.
Over 50% of senior finance executives surveyed consider they spend too much time on transaction processing, 42% feel they spend too much time on management accounting and 32% feel statutory reporting takes up too much of their time.
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. So it is no wonder that only 42% of CFOs believe that the finance function is perceived more positively by other business functions over the last 3 years.
Put bluntly, if organisations are looking to their CFO and finance executives to lead the way in innovative process improvements, identify opportunities for growth, improve profitability and sharpen efficiencies, then they need the time to do it.
The headline writers will have us believe everything has already changed, but the survey indicates there is a long way to go to catch up with the hype.
(good)
Need a slide after this with info introducing to ‘investing 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.
Soft skills ranked highest among the skills senior finance executives believe will be more in demand in three years’ time, followed closely by superior analytical capability, technology and process skills, and entrepreneurial skills.
Unsurprisingly, technical accounting was last on the survey list.
But while the buck may stop there, the skills development must filter down to their team. Automation and business intelligence systems have subsumed many finance tasks that were previously done by entry-level staff, and the process is no-where near to completion. Fewer staff doing higher-skilled jobs will be the norm, and it’s imperative that these employees are developed.
Our research very clearly shows that where senior finance executives invest strongly in their people, they are further down the line in the ‘Modern Finance’ journey compared to executives who do not. For example; They are almost twice as likely to be more engaged in helping the business create value. They are almost three times as likely to be more actively involved in strategy development. They are two and a half times more likely to be perceived more positively by other business functions. They are almost twice as likely to be more actively involved in business decision-making.
good
good
good
Finding data-savvy professionals with the business experience or insights needed to frame the right hypotheses, validate them, and then apply those findings to address specific business challenges or opportunities, will be key to success. But our research indicates that this is a also a major concern.
For example, 45% of those surveyed felt they did not plan adequately for the succession of their finance leaders and the same number couldn’t find the finance skills internally when they were needed. Only 36% of the senior finance executives surveyed said professional accounting bodies are producing people with the skills they need.
Patently, the skills gap is not going to be easy to fix.
(good)
(good)
(good)
Perhaps the most startling part of this year’s research is that CFOs underestimate the importance of process standardisation, automation and linking front office to back office systems.
Survey respondents top three most selected priorities were strategic advice to the board, business partnering and reporting more quickly and accurately to internal stakeholders.
Standardisation and automation of core financial processes came fourth and fifth respectively, whilst linking ‘front office’ customer facing processes to ‘back office’ functions was last on a list of eight!
Yet senior finance professionals who invested in process standardization and automation were more likely to have liberated time spent on transaction processing, statutory and management reporting in favour of more value-added initiatives.
(include notes on slide)
For example, when we compared organisations that said they had fully standardized with those that had yet to start of the standardization journey we found that they have considerably more time to spend on;
performance management, innovation and process improvement,
They also make quicker decisions based on comprehensive and accurate management information,
are perceived more positively by other business functions and
have a better view of organisational performance and forecast more accurately.
Fascinatingly, when we compared the impact of process standardisation, automation and linking front to back office systems, we 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. In other words, 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.
And what’s the quickest way to a standardised approach? Probably the cloud.