Chief financial officers (CFOs) need to rethink how they measure the health of their corporations in the digital age, according to an Oracle and Chartered Institute of Management Accountants (CIMA) survey of 744 executives in 34 countries.
The survey found just 25 percent of respondents had access to the right data to gauge customer sentiment, one of the most critical intangible assets.
Twenty percent said they have access to data about the impact of their brand on their business, but only a third of all respondents say they can measure the quality of their business process.
The report argues that measuring the business value of such intangible assets through innovative key performance indicators (KPIs) is only going to grow in importance as digitally enabled business models proliferate.
"In the past, finance professionals have been more hesitant than their sales and marketing colleagues to embrace cloud technologies due to concerns about placing sensitive financial information in the cloud," Terrance Wampler, vice president of financials product strategy for Oracle, told eWEEK.
Wampler noted the latest study conducted by Gartner and FEI (Finance Executives International) on CFO technology priorities show that that 53 percent of CFOs are either already using or planning to use integrated cloud financial management systems.
"By providing real-time data analytics to line-of-business leaders, finance professionals have the opportunity to influence and guide their organization's strategic direction," Wampler said. "They can augment the traditional rearview-mirror history they've provided in the past with actionable recommendations about future priorities and opportunities. That's what business leaders really need."
He explained traditional performance metrics simply can't capture or quantify the true value of intangible assets, such as intellectual property, customer data, and brand reputation.
In addition, the survey found only 15 percent of finance professionals reported that finance in their organization has been fully realigned to support new value drivers.
The respondents to the global survey believe the top value drivers for their businesses are customer satisfaction (76 percent), quality of business processes (64 percent) and customer relationships (63 percent).
"To measure and exploit these new value drivers, digital KPIs are needed that modern cloud-based tools and technologies can capture," he said. "In addition to re-orienting financial discussions from static historical views to dynamic trends, data analytics will allow finance professional to create entirely new types of digitally enhanced business models to extract commercial value from emerging customer behavior."
Wampler pointed out it will also challenge finance professionals to develop the needed analytical skills to not only ensure data quality, but also to generate market-facing insights.