Finance is at the center of business, and CFOs are well-positioned to help guide strategy, according to a new survey by cloud performance management company Adaptive Insights. The 2015 CFO Indicator showed the majority of CFOs plan to take on more strategic leadership roles (69 percent) and cite a culture of analytics as a key competitive advantage in today’s business climate (56 percent).
Though modern CFOs are positively leading the charge within their own companies, their outlook on the economy, macroeconomic trends and the broader business world is mixed. The majority of CFOs (59 percent) have high confidence in their regional economy but confidence dips to 37 percent when global factors are considered. CFOs cite economic uncertainty (84 percent) and competition (81 percent) as top concerns, followed by product or service obsolescence (65 percent) and interest rates/inflation (64 percent). The fifth risk factor cited by 45 percent of global finance leaders is the outcome of upcoming national elections.
While 38 percent of CFOs predict the number of IPOs will increase, nearly half (49 percent) of those asked about major business transformations admitted they are extremely unprepared for an IPO. CFOs are more bullish on private markets with 69 percent predicting significant growth in private market funding and 38 percent anticipating an increase in private companies valued at or above $1 billion.
“Modern CFOs are increasing their strategic value across the organization at a critical time, managing business success through dynamic and often volatile markets. Those who lead their organizations with a culture of analytics and 360-degree view of the business will be in an advantageous position to effectively manage these unforeseen macroeconomic factors, business changes and Wall Street volatility,” said Rob Hull, founder and chairman of Adaptive Insights. “However, many CFOs face a variety of obstacles and are struggling to achieve this because they don’t have the right financial analytics tools and technologies they need to achieve business success.”
Time, Inaccuracy and Legacy Systems are CFOs Biggest Obstacles
While 70 percent of CFOs feel that finance is already at the center of business and driving strategic decision making, they crave the ability to supercharge their current success and have a strong sense of what’s holding them back.
- Lack of time: 63 percent of CFOs identify the number one obstacle to upping their strategic game is that they don’t have enough time for data analysis
- Kinks in planning and forecasting: 59 percent identify fragmented or inaccurate data and the time consuming nature of accurate planning and forecasting on a regular basis, as their strategic Achilles heel.
- Old technology, questionable corporate strategy: It’s a close race for the third biggest hindrance keeping CFOs from being more strategic. Thirty-nine percent point the finger at outdated and complex legacy systems for holding them back, while 37 percent admit corporate strategy is lacking
Technology Investments Fuel Value Creation
From spreadsheets to the cloud, and financial automation to business analytics, technology advancements have fueled the backbone of financial evolution and strategic decision-making. Modern CFOs have in-depth knowledge of their organizations that extends well beyond the numbers game. As a result, many CFOs are tasked with leading value creation efforts, in which the right technology investments can play a strategic role.
Over the next two years, 55 percent of CFOs plan to increase their investment in financial technologies. Analytics tools and dashboards to support finance efforts (54 percent) top CFO’s technology priority list. Forty-eight percent are in need of reporting tools while 39 percent have their eye on budgeting and forecasting tools.
The Adaptive Insights CFO Indicator reports what is top of mind for CFOs, as well as unveils key attributes that define the modern CFO. Following the release of this Q2 2015 CFO Indicator, Adaptive Insights will be issuing a series of Indicator Briefs, providing deeper CFO insight into global, economic and technology trends. This report surveyed more than 325 chief financial officers across the globe online over a period of ten days ending June 10, 2015. The margin of error is +/- 5.37 percentage points.
Source: Read the entire CPA Practice Advisor article here.