Three years ago, Prophix sponsored a survey of CFOs and other Finance leaders. We wanted to identify the biggest challenges and most promising opportunities for the evolving and expanding role of the Finance department. We found that most Finance departments could benefit from increasing their FP&A maturity, both in developing skill sets and investing in technology.
We conducted a new survey this year, with the help of the CFO Leadership Council. The results of our 2020 CFO Benchmark Report tell a familiar story: There is still a great deal of untapped potential for CFOs looking to modernize their Finance departments.
Here are three key findings CFOs can act on to realize their full potential.
1. FP&A Maturity Persists As a Challenge
Though Finance leaders are eager to optimize the way they work, change is slow to come. Between 2017 and 2020, maturity levels have remained virtually stagnant. In fact, a higher percentage of respondents fall into lower maturity levels now than in 2017.
Here’s how we define the stages:
- Developing: Dependent on key individuals and highly manual, poorly defined processes, mostly spreadsheet-based.
- Defined: Processes mostly defined but with varying levels of documentation. Tools are in place, but the process is still highly manual and dependent on key individuals.
- Advanced: Clearly defined roles and responsibilities, standardized processes, documented policies and procedures, along with a high level of support and integration.
- Leading: FP&A function is aligned tightly to business objectives. Processes and tools are fully defined and optimized, and systems are highly integrated.
FP&A maturity is one of the single biggest opportunities for the Finance department. Our 2020 benchmarks found a direct correlation between FP&A maturity and a decrease in time spent on low-value, manual tasks (more on that later).
2. Corporations Remain Ready to Invest
While we saw a slight drop in those eager to embrace new technology, there’s a lift in those willing to make the right investment. That’s good news for the Finance leaders making the case for technologies to enable advanced ways of working.
- 8% say they are happy with the status quo
- 18% say they apply a wait-and-see approach
- 60% are willing to make selectively targeted investments
- 12% are aggressively opportunistic
A major component of FP&A maturity is using the right tools to automate processes. We see an opportunity for CFOs to make a business case for tech investment in the Finance department. The right technology can not only increase FP&A maturity, but also help Finance take on a more predictive and advisory role in the organization.
3. Analytics Tools Offer a Major Opportunity
As in 2017, advanced analytics users are rare: We found less than 10% of respondents identified themselves as advanced. This is especially noteworthy since time spent on low-value activities–like wrangling spreadsheets–is directly correlated with a lower degree of sophistication. In 2020, those who used more sophisticated analytics tools and processes spent under 20% of their time on spreadsheets. On the flip side, those using very basic tools spent 62% of their time there.
|Level of Analytics Tools||2020|
The Time is Now to Advance Finance
It’s clear the FP&A maturity pendulum hasn’t swung far between 2017 and 2020. In some areas – such as use of analytics tools – we even saw declines in maturity. As business continues moving at breakneck speed and organizations increasingly look to Finance for informed guidance, it’s clear the time has come for CFOs to push for seismic changes. Those CFOs that lead the way can help position their organizations as industry leaders.
Prophix is here to help elevate the Finance department, providing guidance and software that helps financial professionals reframe their everyday challenges into genuine opportunities. Want to learn more? Read the full 2020 report.