As CFOs are held more accountable for their companies’ successes, they’re being driven to build stronger relationships with their CIO peers, especially to bring more data analysis to day-to-day decision-making. The fact that boardrooms expect more from their companies’ technology investments makes this CFO-CIO alignment even more important.
CFOs and CIOs share a unique vantage point across all company operations, making them natural allies as they take on economic, social, and other external challenges reshaping and sometimes transforming their businesses. One big problem: Legacy finance systems can’t cope effectively with those and other near-term demands.
Those are just a few of the key findings of a survey of 1,900 finance leaders in the UK, France, Germany, Italy, the Netherlands, Spain, Sweden, the United Arab Emirates, and Saudi Arabia, released by Oracle and Intel on May 12.
The survey, rolled up into a report titled “Modern Finance: Driving Transformation from Within,” also found that:
• 45% of finance leaders say they’re under increased pressure to raise company productivity.
• 44% say their company is placing more emphasis on driving business growth.
• 41% report they’re being asked to reduce operational costs (even as they’re under pressure to drive more growth).
More than half (58%) of the finance leaders surveyed say they’re more concerned about the impact of changes originating from outside their companies than from within. They cite mainly macroeconomic factors (44%); increasing competition, much of it digitally oriented (40%); and the rising costs of doing business (40%).
Wanted: Chief Data Officers
While finance leaders have been collecting and reporting company data for years, their ability to analyze large volumes of it to deliver competitive advantages has been limited. That’s one area where the CFO must work more closely with the CIO, the report maintains. The next step—one that some companies already have taken—is to bring a chief data officer or other data analytics expert into that fold, the report argues. “Importantly, they know which questions the business must ask of its data to get the answers it needs,” the report states.
When it comes to finance-specific processes, many companies have one arm tied behind their back because of their decades-old, highly customized, poorly integrated legacy systems. Some 61% of the finance leaders surveyed say their customized systems have been growing in complexity over the years, and 54% say those systems can’t keep up with company demands.
“For the many businesses rethinking their strategies to stay ahead of growing competition, being able to speed up innovation and adapt quickly to change are at the top of the corporate agenda,” says Loïc Le Guisquet, Oracle president of EMEA and APAC. “Finance should not be the ball and chain holding the company back from progress. It should be the engine pushing it forward.”
Almost three-quarters (74%) of survey respondents say cloud-based financial software would let them innovate more quickly and effectively, while the same percentage says modern cloud services are critical for their companies to realize their broader digital transformation goals.
So why aren’t more finance departments embracing cloud services? Some 45% of respondents cite increasing regulatory complexity, 37% say they’re still unclear on the benefits and ROI, and 30% blame a lack of alignment between finance and other business units.
“The digital transformation of a business requires greater levels of collaboration between every department in the organization, from marketing to HR,” Le Guisquet says. “This begins with closer alignment among line-of-business leaders, whose approach to working will ultimately be reflected across the entire company.”