A global study of chief financial officers by IBM
reports that nearly three quarters of midmarket CFOs worldwide cite the need
for faster decision-making and pressure to reduce costs as their top
challenges. These CFOs believe that external pressures (economic, industry,
regulatory) will increase over the next three years. As a result, more than
half of these midsize finance organizations believe they have to make major
changes to respond. The survey found nearly 60 percent of midmarket CFOs are
looking to improve operational planning and analytical capabilities.
The findings of this report are based on a survey conducted in the spring
and summer of 2009 by IBM Global Business
Services' Financial Management practice and the IBM
Institute for Business Value (IBV).
More frequently, CFOs of midsize businesses are being called into top-level
discussions around demand and price pressures, business model changes,
information strategy and resource allocation. Additionally, more than 75
percent said they have an advisory or decision-making role concerning the
entire company agenda, as opposed to having no role or being an informer.
Despite their elevated decision-making role, the vast majority of CFOs surveyed
pointed to a significant gap between the importance of key CFO agenda items and
their effectiveness in execution. The largest gaps were found in driving
integration of information (32 percent), talent development (28 percent),
advising on corporate strategy (27 percent), and managing and mitigating
company risk (24 percent).
While the findings indicate that CFOs are increasingly playing a significant
role in strategic and operational matters to help the business make better
decisions faster, midmarket CFOs still cite challenges: More than 40 percent of
companies produce financial metrics manually, with finance spending over 50
percent of the time on transactional activities. Half lack a common planning
platform and 36 percent lack a common reporting platform. Nearly 60 percent
were not satisfied with their operational planning and forecasting analytical
capability, and 47 percent were poor to average at anticipating external
forces. Through the analysis, one group of finance organizations, dubbed
"Value Integrators," were found to consistently outperform their
peers in key financial metrics by driving two main qualities across their
organization: finance efficiency and business insight.
The study indicates that enforcing process and data standards, integrating
information, and applying business analytics are key capabilities that enable
improved business insight and risk management. Midsize firms are well aware of
the importance of these capabilities. For example, the 2009 Global CIO
Study revealed that 86 percent of midmarket CIOs identified business
intelligence and analytics—the ability to see patterns in vast amounts of data
and extract actionable insights—as a top technology for enhancing
competitiveness over the next five years.
"Midmarket CFOs and their finance organizations are taking a much more
prominent role in corporate decision-making," said Marc Dupaquier, general
manager of Midmarket at IBM. "This
makes it all the more important for these CFOs to be able to provide insights
into their companies' financial data and suggest strategies that will help
advance their companies' agendas."
Participants included more than 1,900 CFOs and senior finance executives from
81 countries and 35 industries. Of those, 44 participants were from midsize
firms, defined as companies with less than $500 million in annual revenue.
These leaders participated in structured interviews conducted in person by IBM
practitioners or online surveys designed to capture insights on how finance
professionals are affected by and deal with performance, risks, operational
levers and governance.
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