CFO Insights: Adapting the Role of Finance to Unlock Business Value
Learn what is top-of-mind for finance leaders in growth-focused organisations. Research from Oxford Economics provides insights on which processes are the biggest time wasters, the focus on compliance and ESG, the value of AI and how finance leaders help their organisations to compete. Preuzmite dokumentCFO INSIGHTS:
ADAPTING THE ROLE
OF FINANCE TO UNLOCK
BUSINESS VALUE
Midsize organisations are counting on finance to drive digital transformation
and growth.
ADAPTING THE ROLE
OF FINANCE TO UNLOCK
BUSINESS VALUE
Midsize organisations are counting on finance to drive digital transformation
and growth.
Introduction
Finance executives are in a unique position with responsibilities that have expanded
to include parts of the business not traditionally associated with their role, such
as technology strategy, market volatility management, cybersecurity, ESG and
sustainability. These executives have real opportunities to have a far-reaching
impact and continue to grow the business if they focus on innovating products,
services and business models, and harnessing emerging technology to create
processes that launch them forward.
Yet creating a business strategy that captures
the full potential of technology remains a
work in progress for many finance executives.
They must develop, update and execute these
strategies, while navigating changing regulations
and customer preferences. New players enter
the market almost daily, and for midsize
organisations, innovation becomes increasingly
important to keep up with a changing industry.
Compounding these problems, finance
processes are slow and consume valuable
resources. Spending extra time on tasks that
could be accelerated (or automated) takes
time away from critical strategy planning –
where executives can construct blueprints
for how to harness technologies that enable
innovation, employee empowerment and
customer satisfaction.
To better understand the challenges facing
the finance function, Oxford Economics
partnered with SAP to survey 600 executives
who have financial decision-making authority –
300 finance executives, 200 CEOs and
100 accounting executives – from midsize
organisations around the world and across
multiple industries. The survey revealed these
key takeaways:
1. The finance function has transformed.
Finance leaders have a wide range of new
responsibilities and are figuring out what
needs to be prioritised. They are the new
right hand for the CEO and need to keep
up with the changing landscape to make
smart decisions. Our survey found many
are still figuring out how to balance their
new responsibilities.
2. Compliance clouds the vision. Finance
decision-makers face operational challenges –
including expanding regulatory requirements
and emerging ones, such as ESG. These
operational hurdles can force shorter-term
thinking among finance executives, putting
things like innovation and AI implementation
on the back burner. Compliance failures can
lead to a loss of brand reputation and access
to ESG programme funding.
3. Finance executives need the right
tools in place. Many of our finance
respondents’ biggest concerns could
be eased with the right technology.
Their existing systems are not up to the
challenge: complying with regulations,
operating efficiently, ability to take action
on information in a timely manner and
security threats still prove difficult.
Finance executives are in a unique position with responsibilities that have expanded
to include parts of the business not traditionally associated with their role, such
as technology strategy, market volatility management, cybersecurity, ESG and
sustainability. These executives have real opportunities to have a far-reaching
impact and continue to grow the business if they focus on innovating products,
services and business models, and harnessing emerging technology to create
processes that launch them forward.
Yet creating a business strategy that captures
the full potential of technology remains a
work in progress for many finance executives.
They must develop, update and execute these
strategies, while navigating changing regulations
and customer preferences. New players enter
the market almost daily, and for midsize
organisations, innovation becomes increasingly
important to keep up with a changing industry.
Compounding these problems, finance
processes are slow and consume valuable
resources. Spending extra time on tasks that
could be accelerated (or automated) takes
time away from critical strategy planning –
where executives can construct blueprints
for how to harness technologies that enable
innovation, employee empowerment and
customer satisfaction.
To better understand the challenges facing
the finance function, Oxford Economics
partnered with SAP to survey 600 executives
who have financial decision-making authority –
300 finance executives, 200 CEOs and
100 accounting executives – from midsize
organisations around the world and across
multiple industries. The survey revealed these
key takeaways:
1. The finance function has transformed.
Finance leaders have a wide range of new
responsibilities and are figuring out what
needs to be prioritised. They are the new
right hand for the CEO and need to keep
up with the changing landscape to make
smart decisions. Our survey found many
are still figuring out how to balance their
new responsibilities.
2. Compliance clouds the vision. Finance
decision-makers face operational challenges –
including expanding regulatory requirements
and emerging ones, such as ESG. These
operational hurdles can force shorter-term
thinking among finance executives, putting
things like innovation and AI implementation
on the back burner. Compliance failures can
lead to a loss of brand reputation and access
to ESG programme funding.
3. Finance executives need the right
tools in place. Many of our finance
respondents’ biggest concerns could
be eased with the right technology.
Their existing systems are not up to the
challenge: complying with regulations,
operating efficiently, ability to take action
on information in a timely manner and
security threats still prove difficult.
Figure 1: Financial software needs an upgrade
To what extent is your organisation limited by its current finance software in the following ways?
Select one per row.
Our current system will not scale to support our growth
We outsource a lot of our finance function and want to bring it in-house
Our system is inflexible or lacks important finance capabilities
The supplier no longer maintains our system, or it is at end-of-life
We are concerned about the security of our current system
Our current system is not cloud and we want to move to cloud
Inability to easily aggregate data for reporting
11.5%
7.3%
8.5%
8.5%
14.3%
8.0%
15.0%
The future of finance is here, but are
executives prepared?
For a long time, finance executives looked for
the opportunity to improve operations while
making finance a more strategic business
partner to the C-Suite. The opportunity is finally
here. Their responsibilities now include volatility
management (49%), technology strategy and
road mapping (49%), sustainability and ESG
(45%), and cybersecurity (44%). They are
increasingly becoming a key stakeholder and
have a broader range of responsibilities and
priorities to balance.
Taking on these new responsibilities proves
difficult when existing finance software works
against them. Almost two-thirds say their
current system will not scale to support growth,
is not cloud-supported, is not able to easily
aggregate data for reporting or that the supplier
no longer maintains their system (Figure 1).
But while underperforming software or changes
to management processes present a great risk,
organisations are perhaps most at the mercy
of outside market disruption.
Not at all limited Minimally limited Moderately limited Significantly limited
28.8%
39.2%
38.7%
26.8%
34.2%
33.2%
32.2%
31.2%
29.7%
33.2%
45.7%
35.3%
43.5%
37.7%
28.5%
23.8%
19.7%
19.0%
16.2%
15.3%
15.2%
To what extent is your organisation limited by its current finance software in the following ways?
Select one per row.
Our current system will not scale to support our growth
We outsource a lot of our finance function and want to bring it in-house
Our system is inflexible or lacks important finance capabilities
The supplier no longer maintains our system, or it is at end-of-life
We are concerned about the security of our current system
Our current system is not cloud and we want to move to cloud
Inability to easily aggregate data for reporting
11.5%
7.3%
8.5%
8.5%
14.3%
8.0%
15.0%
The future of finance is here, but are
executives prepared?
For a long time, finance executives looked for
the opportunity to improve operations while
making finance a more strategic business
partner to the C-Suite. The opportunity is finally
here. Their responsibilities now include volatility
management (49%), technology strategy and
road mapping (49%), sustainability and ESG
(45%), and cybersecurity (44%). They are
increasingly becoming a key stakeholder and
have a broader range of responsibilities and
priorities to balance.
Taking on these new responsibilities proves
difficult when existing finance software works
against them. Almost two-thirds say their
current system will not scale to support growth,
is not cloud-supported, is not able to easily
aggregate data for reporting or that the supplier
no longer maintains their system (Figure 1).
But while underperforming software or changes
to management processes present a great risk,
organisations are perhaps most at the mercy
of outside market disruption.
Not at all limited Minimally limited Moderately limited Significantly limited
28.8%
39.2%
38.7%
26.8%
34.2%
33.2%
32.2%
31.2%
29.7%
33.2%
45.7%
35.3%
43.5%
37.7%
28.5%
23.8%
19.7%
19.0%
16.2%
15.3%
15.2%
Uneven functionality in existing software inhibits
innovation and efficiency across the board.
Many feel they are working with outdated
processes around financial closing, receivables/
payables management, accruals management,
revenue accounting, and consolidating and
reconciliations (see Figure 2). Unless these
impediments are lifted, finance executives
will not be able to live up to their new role.
Figure 2: Time-consuming processes
Which of the following finance processes require
the most amount of time to complete? Select all
that apply.
Financial closing
Receivables/payables management
Accruals management
Revenue accounting
Consolidating and reconciliations
Budgeting and forecasting
Report generation
48.3%
45.8%
45.3%
44.3%
39.2%
39.2%
How will you stay competitive?
“Keeping up with new innovations
is the key to staying competitive
in this market.”
A Direct Report to the CFO at a US banking
organisation.
Cash and liquidity management
34.2%
56.7%
Finance and HR
working hand in hand
Driving innovation in the finance function
is not exclusively about access to capital
and technology; it’s also about managing
one of your greatest assets: the workforce.
Finance executives recognise the need
for a strong HR department to drive
innovation and efficiencies for their
organisation. Over a third (37%) say that
the ability to retain talent is a top-three
risk over the next two years.
That transformation starts with stronger
data practises. A majority of finance
executives (75%) recognise that integrating
processes and data across the business
will help them collect and use employee
productivity data to improve efficiency.
They also understand that integrated
processes and data can positively affect
the employee experience, with 85% of
respondents saying it helps organisations
achieve consistent employee experiences.
Integrating processes and data is not
the only step organisations can take
to improve employee retention and
innovation. Finance executives see the
potential of emerging technologies, like
AI, having an impact as well. Roughly two-
thirds (65%) of finance executives say AI
will have a moderate to significant impact
on HR. Other enterprise technologies, like
workforce management solutions, are
currently in use (46%), and many (40%)
expect to use them in the next 12 months.
By connecting people and finance data,
organisations can create more accurate
dashboards, with more informed predictive
insights.
innovation and efficiency across the board.
Many feel they are working with outdated
processes around financial closing, receivables/
payables management, accruals management,
revenue accounting, and consolidating and
reconciliations (see Figure 2). Unless these
impediments are lifted, finance executives
will not be able to live up to their new role.
Figure 2: Time-consuming processes
Which of the following finance processes require
the most amount of time to complete? Select all
that apply.
Financial closing
Receivables/payables management
Accruals management
Revenue accounting
Consolidating and reconciliations
Budgeting and forecasting
Report generation
48.3%
45.8%
45.3%
44.3%
39.2%
39.2%
How will you stay competitive?
“Keeping up with new innovations
is the key to staying competitive
in this market.”
A Direct Report to the CFO at a US banking
organisation.
Cash and liquidity management
34.2%
56.7%
Finance and HR
working hand in hand
Driving innovation in the finance function
is not exclusively about access to capital
and technology; it’s also about managing
one of your greatest assets: the workforce.
Finance executives recognise the need
for a strong HR department to drive
innovation and efficiencies for their
organisation. Over a third (37%) say that
the ability to retain talent is a top-three
risk over the next two years.
That transformation starts with stronger
data practises. A majority of finance
executives (75%) recognise that integrating
processes and data across the business
will help them collect and use employee
productivity data to improve efficiency.
They also understand that integrated
processes and data can positively affect
the employee experience, with 85% of
respondents saying it helps organisations
achieve consistent employee experiences.
Integrating processes and data is not
the only step organisations can take
to improve employee retention and
innovation. Finance executives see the
potential of emerging technologies, like
AI, having an impact as well. Roughly two-
thirds (65%) of finance executives say AI
will have a moderate to significant impact
on HR. Other enterprise technologies, like
workforce management solutions, are
currently in use (46%), and many (40%)
expect to use them in the next 12 months.
By connecting people and finance data,
organisations can create more accurate
dashboards, with more informed predictive
insights.
Executives still have numerous operational
hurdles to overcome
While finance executives are adapting to their
transformed role, they are also balancing
various operational challenges. Roughly two-
thirds of finance function respondents say that
an inability to scale processes and systems to
match organic business growth (68%), relying
too much on manual, low-value tasks to work
around deficiencies in legacy systems (58%)
and an inability to adjust or replan based
on new information or shifting priorities (57%)
are the most formidable barriers in their search
for scalability.
In addition, the finance function is adapting
to constant evolution and increased regulatory
complexity on top of increasingly scrutinised
corporate oversight. Compliance has caused
an avalanche of concerns for finance executives,
with most reporting global accounting
standards, security and data privacy, new
mandates from geopolitical conflicts, revenue
recognition, tax and electronic filing mandates,
ESG disclosures and AI ethics as major issues
for their organisation (Figure 3). In the current
geopolitical environment, compliance is more
difficult than ever, and finance executives are still
figuring out how to keep up with shifting targets.
ESG is a new concern for the function, and there
is unprecedented demand from consumers
for transparency. While respondents cite ESG
disclosures as a major issue to their organisation,
they are not prioritising sustainability to the
same extent. Over the next two years, improving
sustainability is ranked the least critical
strategic priority. Instead, finance executives’
view the sustainability dilemma as a tactical
concern: one-quarter of finance respondents
cite tracking sustainability as a top challenge
to their organisation.
Figure 3: Compliance compounds operational
hurdles
To what extent do the following compliance
areas present a challenge to your organisation?
“Moderately” and “Significantly” challenging
responses.
Significantly challenging Moderately challenging
ESG disclosures
28%
34%
Trade compliance (Imports/Exports/Business Partners)
20%
38%
Global accounting standards
51%
21%
Lease accounting
45%
16%
Tax and electronic filing mandates
35%
27%
New mandates resulting from geopolitical conflicts
24%
39%
AI ethics
23%
40%
Revenue recognition
31%
33%
Security and data privacy
46%
25%
hurdles to overcome
While finance executives are adapting to their
transformed role, they are also balancing
various operational challenges. Roughly two-
thirds of finance function respondents say that
an inability to scale processes and systems to
match organic business growth (68%), relying
too much on manual, low-value tasks to work
around deficiencies in legacy systems (58%)
and an inability to adjust or replan based
on new information or shifting priorities (57%)
are the most formidable barriers in their search
for scalability.
In addition, the finance function is adapting
to constant evolution and increased regulatory
complexity on top of increasingly scrutinised
corporate oversight. Compliance has caused
an avalanche of concerns for finance executives,
with most reporting global accounting
standards, security and data privacy, new
mandates from geopolitical conflicts, revenue
recognition, tax and electronic filing mandates,
ESG disclosures and AI ethics as major issues
for their organisation (Figure 3). In the current
geopolitical environment, compliance is more
difficult than ever, and finance executives are still
figuring out how to keep up with shifting targets.
ESG is a new concern for the function, and there
is unprecedented demand from consumers
for transparency. While respondents cite ESG
disclosures as a major issue to their organisation,
they are not prioritising sustainability to the
same extent. Over the next two years, improving
sustainability is ranked the least critical
strategic priority. Instead, finance executives’
view the sustainability dilemma as a tactical
concern: one-quarter of finance respondents
cite tracking sustainability as a top challenge
to their organisation.
Figure 3: Compliance compounds operational
hurdles
To what extent do the following compliance
areas present a challenge to your organisation?
“Moderately” and “Significantly” challenging
responses.
Significantly challenging Moderately challenging
ESG disclosures
28%
34%
Trade compliance (Imports/Exports/Business Partners)
20%
38%
Global accounting standards
51%
21%
Lease accounting
45%
16%
Tax and electronic filing mandates
35%
27%
New mandates resulting from geopolitical conflicts
24%
39%
AI ethics
23%
40%
Revenue recognition
31%
33%
Security and data privacy
46%
25%