Across the globe, financial executives are increasingly being asked to actively support rapid decision making with accurate and timely data.
In a May 2016 report, Financial Planning and Analysis 2016: The Value of Instant Insights in A Fast-Paced Digital Economy, CFO Research summarized a survey of 308 senior financial executives from leading organizations worldwide. The survey gauged how well their financial planning and analysis (FP&A) systems provide current and credible information.
Their responses reiterate a serious problem: existing operations and procedures are not meeting the challenge of delivering combined speed and accuracy, and they will be doing an even worse job in the years ahead.
The report was structured around three reasons why existing FP&A systems require substantial improvement:
1. “Finance leaders are feeling increased pressure to deliver FP&A in the moment.”
Financial executives are expecting increased “in the moment” pressures over the next two years in two key areas: to dynamically plan (94%) and to provide managers with instant access to financial information (93%).
Furthermore, 87% believe current systems and processes will fall short on both counts.
2. “The highest levels of data sharing and collaboration require tightly integrated systems.”
Lack of integrated systems is a key obstacle, according to finance leaders. More than half – 54% – of responders indicated that, while financial planning systems may be well-coordinated at the corporate level, they must still cope with separate systems for different operating units, subsidiaries, or functions.
Additionally, 48% said that the integration between their financial planning and ERP systems is problematic and, even when integrated, require some level of data migration to share information.
To make needed strategic contributions to the organization, finance cannot be tied down to manual data manipulations for ensuring quality, system to system.
3. “Streamlining data flows will help finance executives and their companies better meet the challenges of the pace of change.”
Responders overwhelmingly recognized the need for managers to have confidence in data provided. A full 89% reported being under increased pressure to boost the confidence of decision makers in data used.
When asked to identify the greatest risk to data usage, 30% said managers had “too much data” and 32% said they had “too little.” Too much data drowns managers in information. Too little data leaves managers to fill in the blanks on their own. Either is highly problematic, undermining the effectiveness of financial planning and weakening user confidence.
These data concerns come at a time when finance is under intense pressure to deliver on demand. As a result, 63% of finance executives indicated that to some degree they find themselves sacrificing data accuracy and reliability for speed. Seventy-four percent of responders said that improving the ability to share data seamlessly between ERP and financial planning systems would provide greater assurance that planning data would conform to actual data.
Other expected benefits
Responders pinpointed a number of additional benefits to adopting closely integrated systems including:
- 76% – increased collaboration among users
- 75% – greater flexibility and customization of financial analysis
- 72% – boost in responsiveness to rapidly evolving business conditions
- 70% – improved ability to develop a “single version of the truth”
- 66% – reduced total cost of ownership
Finance executives recognize that the standards for fast, accurate FP&A are continually on the upswing. As a result, they see the need to rely more heavily on digitization for conforming and delivering current, credible information to decision makers across their organizations.
Read the entire report prepared by CFO Research in collaboration with SAP, Financial Planning and Analysis 2016: The Value of Instant Insights in A Fast-Paced Digital Economy.
More great resources on financial planning and analysis for CFOs are available here.