CFOs who make a measurable difference to their organization’s performance recognize that technology can help them manage their increasingly demanding role. These executives leverage cloud-based applications, ERP platforms, and other popular tools. They also understand that today’s digital innovations are tomorrow’s core technologies, and they are pioneers in using next-generation tools like artificial intelligence, blockchain, and the Internet of Things.
These are among the findings from “How Finance Leadership Pays Off: Six Ways CFOs Stay Ahead of the Pack,” published in June. SAP and Oxford Economics surveyed 1,500 finance executives in 32 countries and a broad range of industries. To see what we can learn from organizations where the finance function drives exceptional performance, we identified six traits that make a “finance leader,” including frequent collaboration with other business units and a high degree of automation-enabled efficiency.
Only a select 11.5% of our survey respondents qualified as leaders. Yet our results show that finance leaders are almost twice as likely as non-leaders to report growing market share. They have a tighter grip on costs. And they make the most of technology innovations. According to our research, leaders are much less likely than non-leaders to say outdated systems keep them from achieving their business goals.
The technology edge
Finance leaders are realistic about the growing demands on the finance function. Among the starkest ways they differ from other respondents is in their appreciation of their job’s mounting complexity. Only 19% of non-leaders believe the finance function is much more complex than it was two years ago—but at 65%, more than triple the percentage of finance leaders agree.
That recognition may be why leaders consider mature technologies like ERP platforms and the cloud must-haves. Now, they are exploring what the next wave of technology can do for their business. For example, says Brian Stief, CFO of Johnson Controls, “I think data analytics is going to be extremely important to the finance organization going forward.”
Indeed, our research shows that the ability to understand and utilize data correlates with financial success. Among survey respondent companies with 5.1%–10% profit margin growth, 82% say they find T&E spending analytics extremely or very useful, vs. only 62% of those with zero or falling profit growth. And 49% of respondents whose profit margins are growing by 5.1%–10% say they find supply chain analytics useful vs. 35% of those with zero or negative profit growth.
A striking result of our survey was how highly finance leaders value innovative emerging technologies. Leaders are at least three times more likely than non-leaders to say that the Internet of Things, blockchain, and artificial intelligence are important to the finance function’s successful performance today. In fact, our research shows that the further out one goes on the technology innovation curve, the wider the gap between finance leaders and other respondents.
To read the full study and learn about other ways finance leaders stay ahead of the pack, please click here.