As chief financial officers (CFO) continue to grapple with ongoing business disruptions from COVID-19, a new report from Accenture found finance leaders need more real-time data to pivot from measuring to creating value.
“CFOs have more data at their fingertips than anyone else in the company,” said Manish Sharma, group chief executive of Accenture Operations. “Operating with real-time data puts the CFO in a unique position to drive positive change for the business, pivoting the finance function from measuring value to creating value and driving growth.”
When asked about the greatest areas of concern to their business for 2021, CFOs most often cited the potential impact of rising interest rates (cited by 49%), disruption from the pandemic (47%), economic recession (47%), and hiring and retaining the right talent (42%). Given the complexity of these challenges, the majority (68%) believe that a real-time financial model — which makes use of AI, machine learning algorithms and real-time, diverse data sets — will be critical to enabling better business decisions, more-accurate forecasting models and improved data accuracy.
Even during the pandemic, respondents said they’re investing, on average, 33% of their finance department’s budget this year to building real-time operations and processes. Large U.S. companies — i.e., those with at least US$10 billion in annual revenue — appear even more committed to such a capability, saying they intend to invest at least 50% of their (2020-2021) finance-department budgets in this area. Roughly two-fifths (44%) of respondents said they plan to have nearly all finance processes and operations in real-time over the next three years.
“If recent history has taught us anything, it’s that businesses that thrive in an unpredictable environment do so by being agile and swiftly adapting to change,” said Dr. Christian Campagna, Ph.D., who leads Accenture’s CFO and Enterprise Value network. “Not only do finance leaders need to outmaneuver uncertainty, but also leverage an intelligent finance operating model that draws upon data, applied intelligence, digital technologies and human talent to give them the speed they need to make the enterprise succeed.”
While these advantages are well-known, finance leaders also face a variety of challenges in implementing these processes. For example, real-time scenario planning topped the list of CFO priorities for 2021 (cited by 34% of respondents), but 58% of respondents expressed concern about identifying or hiring the right talent to implement this capability. While roughly a fourth (24%) of respondents cited real-time insights as highest priority for their company’s finance function, roughly two-fifths (43%) believe that technology is the most significant barrier to implementation, with slightly fewer (39%) citing the same for strategy know-how. Technology was also seen as a barrier to implementing continuous close (43%) and continuous accounting (40%).
“Implementing real-time processes isn’t easy, but CFOs today must move at the pace of their business to minimize risk and uncertainty and open up new opportunities for business growth,” said Manoj Shroff, who leads Accenture’s intelligent finance operations offering. “By embracing change and pivoting to intelligent operations, the role of the finance function is increasingly elevated while positioning the company for growth.”
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