Finance leaders need to redefine their approach to resilience, intelligence, leadership, and talent in order to become more analytical and innovation, said enterprise cloud applications for finance and HR provider Workday, which recently released results of its global survey “Finance Redefined”.
While finance needs to invest in the people and capabilities required to deliver strategic insight for driving decision making, survey results indicate that many corporate finance functions are unable to deliver such insight because of difficulty integrating finance and non-finance data, lack of relevant skills within finance teams, and ineffective collaboration among C-suite peers on data-driven decision making, the firm noted.
The survey was done in partnership with Longitude Research and includes responses from more than 670 finance leaders across the Americas, Europe, Asia Pacific, and South Africa, said Workday.
More than one-third of respondents were CFOs, finance directors, or chief accounting officers/controllers. The other respondents were drawn from senior finance roles, such as head of Financial Planning and Analysis or vice president of Financial Operations, the firm added.
Resilience: Prioritizing data-driven risk analysis
Growing regulatory scrutiny and rapid technological change top finance leaders’ list of risks, with only 39% of finance leaders highly confident about managing risks, Workday said.
The study also shows that lack of meaningful data and systems-related issues are major barriers to improving risk management.
In order to create more resilient finance functions, leaders must not only ensure they have the right systems and data management practices in place, but also a culture that prioritizes data-driven risk analysis, pointed out Betsy Bland, vice president, financial management corporate strategy, Workday.
Intelligence: data-driven decision making
While advanced analytics is critical to the finance function’s ability to inform decision making in a data-driven economy, the survey found only 35% of corporate finance teams are making extensive use of advanced analytics in key finance areas such as planning, budgeting, and forecasting.
The top challenge to doing more is integrating finance and non-finance data, which, because of system inefficiencies, requires teams to spend significant time aggregating and reconciling data, Workday said.
In addition, younger finance executives—aged 39 and below—say that a culture focused on intuition – rather than data-driven decision making – is a top barrier to their organization’s analytics ambitions.
Leadership: CFOs and CIOs need to change the way they collaborate
Despite the importance of collaboration today, only about one-third of finance leaders enjoy seamless collaboration with key C-suite peers, including chief information officers (CIOs) and chief human resource officers (CHROs), survey results indicate.
While 74% of survey respondents CFOs and CIOs need strong working relationships, 68% note that CIO-CFO collaboration is limited because the executives don’t speak the same language – meaning terminology, jargon, and understanding priorities.
To improve collaboration, CFOs need to put structures and processes in place, as well as shift attitudes to bring in C-suite peers early on into programs and projects.
Talent: Finance roles to be redefined
The face of finance talent is set to change radically, with 74% of respondents saying that finance roles will need to be redefined as a result of robotics and artificial intelligence, according to survey results.
The survey also shows that a top barrier to driving finance transformation is a lack of relevant skills, with forward-looking finance leaders looking to expand their talent horizons beyond traditional finance roles to include data scientists and statisticians, Workday added.
To better prepare for tomorrow’s finance talent needs, CFOs must partner with CHROs to better understand what skills will be required in the long term the firm advised.