IBM has announced the findings of a major new study of over 1,900 CFOs and senior finance executives from 81 countries and 35 industries worldwide, which reveal that more than 60% of CFOs plan major changes to respond to the new economic climate. Across the ASEAN countries, close to 50 organisations participated in the study.

Global CFOs and senior finance executives believe the already intense pressure on three fronts — reducing the enterprise cost base, making faster, more accurate decisions and providing more transparency to external stakeholders — will increase over the next three years. The study's results show that ASEAN CFOs see the need for faster decision making as their number one external challenge for the next three years, as opposed to pressure to reduce the cost base. The fact that ASEAN is a growth market probably explains the greater emphasis on speed and growth, although 72% of ASEAN CFOs do expect “pressure to reduce the cost base” to increase. ASEAN CFOs understand the need for profitable, sustainable growth and also recognize the threat posed by low-cost competitors from China, India and other emerging economies.

The IBM study is the largest sample of CFO sentiment during the worst economic downturn in decades. As part of the impetus for change, study participants ranked “providing inputs into enterprise strategy” number one in the global results, when asked what was most important. Surprisingly, cost reduction was not at the top of the CFO agenda. However, they also revealed a major gap in organizational effectiveness, as only 50% feel their finance organizations are currently effective in providing the necessary business insight to support these broader enterprise priorities.

The study also found that ASEAN CFOs are in line with their global peers, who take a prominent role in enterprise decision and rank it as highly important — making, acting as an advisor or decision maker, rather than just as an information provider, especially within the areas of enterprise decision-making, such as business model innovation/reshaping. The ASEAN CFO, like his global peer, recognizes that significant performance gaps still exist. An area highlighted as a challenge which needs to be improved was driving information integration across the enterprise. It will be challenging as much less than half of the ASEAN respondents believe that their finance organisation is effective at it. CFOs need to work with the CIO and other C-level executives to improve the way financial and non-financial data is captured, stored and used across the enterprise, as this problem cannot be solved without the collaboration of the entire leadership team.

In the area of providing business insights, ASEAN CFOs were found to be much less effective than their global  peers. For example, three-quarters of ASEAN CFOs were not satisfied with their finance organization’s operational planning and forecasting analytical capability and more than 60% believe that they are poor to average at anticipating external forces. ASEAN finance organisations are much more likely than their global peers to manually produce operational and

financial metrics produced manually.

Given that ASEAN CFOs expect demands for faster decision-making to increase, they need to invest in new capabilities, including developing their staffs’ analytical skills as well as fixing data, technology and process barriers to providing better insight. Unfortunately, we found that only one-third of ASEAN CFOs believe that they are effective at developing their people, compared to half of CFOs globally.

Since IBM’s first CFO study in 2003, CFOs have continually stated their aspirations to shift more focus to analysis and decision support, however few have made significant progress shifting the workload. Among Finance’s effectiveness gaps, the largest is in the area of driving integration of information. CFOs’ responses indicate this is a major enabler for practically every area of business insight, but, at the same time, show just how difficult this kind of integration is to accomplish.