Just under half (46 percent) of chief financial officers rely on “gut-feel” and instinct to make business decisions in lieu of fast access to accurate internal data, according to a survey of 1,500 financial decision makers by Epicor Software.
Of those polled, 45 percent say poor data hampers timely decision-making, and inaccurate information is the main cause of organizational mistakes.
The report revealed CFOs in the manufacturing and engineering sector were the most likely to have a basic or legacy financial IT infrastructure and a high need to rely on instinct for decision making.
“It’s shocking that the survey confirms just how many CFOs are still putting up with old, inflexible business systems, papering over the cracks with a myriad of spreadsheets,” Malcolm Fox, vice president of product marketing for financial management and services industry solutions at Epicor, told eWEEK. “There is good appreciation that what they really need is a modern ERP to deliver the answers they need, at the speed they need them, but there remains a reticence to invest in a modern ERP platform to improve decision-making.”
Fox said they are finding this approach increasingly untenable and he anticipates that many will be driven to action over the next couple of years.
“They certainly need to, else risk being left behind by more informed competitors who are able to quickly and accurately make sense of their internal and external data,” he said. “CFOs are very pragmatic and our survey shows the incredible and largely well founded faith they have in their own judgment. However, the speed of disruption is increasing and the penalties associated with making the wrong call all point to the need to resolve the underlying problem of being able to make sense of business information with confidence directly from the system of record.”
Sixty percent of CFOs polled said they still rely on Excel spreadsheets to gain access to data, and nearly one-third (32 percent) of those surveyed said the financial IT system they currently use need updating.
Fox said he sees a continuation of the journey away from the detail orientation of their finance heritage and further into the realms of strategy and technology.
“To cope with this future, CFOs must ensure their operational responsibilities are more streamlined and automated,” he explained. “It’s often said that the CFO has the best view of the business, but they are often looking in the rear view mirror and predominantly at internal information.”
He also found it interesting that the survey points to an awareness of the impact of big data.
“Technology advancements mean that the CFO view will be expected to identify trends and patterns and inform strategy with a combination of what’s happening within the business with what’s happening in the broader landscape,” Fox said. “Businesses that are stuck on older monolithic business systems, relying on spreadsheets for information, are going to become increasingly isolated.”