How far along is your Finance department with developing FP&A maturity? Are you stuck with spreadsheets, or headed to the cloud? More importantly, how does your progress compare to your peers — and how can you move forward faster?
To answer these questions, Prophix joined forces with the CFO Leadership Council for a first-of-its-kind survey and report. The 2020 CFO Benchmark Report: Finance Department Challenges, Capabilities & Solutions collects responses from nearly 400 Finance leaders. These responses clearly show what the biggest challenges and opportunities are for Finance professionals everywhere.
But we didn’t want to leave you with benchmarks and no next steps. So we asked Finance leaders and expert analysts to add their observations.
Read the report for insight from:
President, CFO Leadership Council
CEO, Managing Partner, Advanced CFO
CEO, Skanör Group. Author of ‘FINANCE UNLEASHED’
Principal, Freedom Business Management
Vice President, Marsh & McLellan Companies
President & CEO, Maryland Association of CPAs & The Business Learning Institute
Lack of FP&A Maturity Traps CFOs in Low-Value Tasks
Being in the developing stage of FP&A means that organizations are wasting time on low value, manual tasks, such as manipulating spreadsheets. Our survey found a direct correlation between FP&A maturity and reduced spreadsheet time.
Elite CFOs with the right solutions can increase their productivity by more than 30%. That is like receiving $100,000 in free strategic consulting every year!
FP&A Transforms Organizations
Modernizing your Financial planning and analysis (FP&A) can transform your Finance department, making it more efficient while identifying new areas of opportunity to advise the organization. Despite the potential, however, our research found most organizations are still in the early stages of FP&A transformation.
Fifty-one percent of respondents to our survey said they are in the “developing” stage of FP&A, while only 2% say their FP&A is leading edge.
The pursuit of FP&A maturity is a key opportunity for CFOs. But how do we level up?
I think this is a chance to augment our intelligence in Finance and accounting and move up the value chain to much higher value activities like predictive analytics, business model transformation and partnering across the organization.
Three Major Roadblocks to Better FP&A
Deploying a mature and effective FP&A strategy can transform organizations for the better. However, there are challenges to deploying new technology and processes. The CFOs we surveyed identified three factors that are slowing down transformation:
- Human Resources: Lacking the right people and the resources to hire them.
- Time: Too many other priorities competing for CFO attention.
- Financial Resources: Budgetary constraints making it hard to invest in new tech.
The way to overcome these roadblocks is found in automation, optimization and increasing efficiency. Tools that increase efficiency also free up time and human resources. Those increased efficiencies in turn, improve the financial picture.
“Essentially, Finance leaders are looking to adopt more robust software, train or hire the skills to use it most effectively, and ultimately improve their data quality. These priorities taken together provide the beginnings of a roadmap to greater FP&A maturity.” – David Chase
Meeting The Four Top Challenges for Finance Leaders
In our survey, Finance department leaders identified their top four challenges:
- Strategic Planning
- Risk Management
- IT Technology
Investing in technology can help solve these challenges. Specifically, automation and Artificial Intelligence (AI) can be deployed to provide more accurate data and real-time insights.
Now is the time for Finance professionals to push for investment in this technology. The 2020 CFO Benchmark Report found that more corporations support an enhanced role for their Finance department, and thus are eager to deploy new technologies. More than 60% of respondents said their organizations are willing to deploy technology in new areas.
“CFOs need to be able to convey to executive management the NEED for investing in technology and sophisticated FP&A in the finance and accounting departments. The need must be justified and backed up by quantitative analyses of the impact on potential investments.” – Jerry Freedman
The 2020 CFO Benchmark Report makes clear that FP&A maturity can transform Finance departments, empowering them to take on a more advisory role in the organization. The key to achieving better outcomes lies in greater investment in a well-developed FP&A process along with increased technology deployment.
Read the full 2020 CFO Benchmark Report for the rest of our findings.