hindsight, insight, foresight - longview€¦ · data for its presentation.” 4 i hindsight,...
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One of the key duties of the chief financial officer
(CFO) is to understand and represent the company’s
financial position. The CFO who can report on the
financial position with great accuracy, detail, and
insight is empowered, both immediately and for
the future. For today, that CFO gains a competitive
advantage for the company. For tomorrow, the CFO
can create plans that are actionable and constant,
yet flexible.
HINDSIGHT, INSIGHT, FORESIGHTToday, an accurate financial position provides a competitive advantage; tomorrow it enables planning that is actionable, constant, and fluid.
A recent survey of 157 senior
finance executives, conducted
by CFO Research in collabora-
tion with Longview, found that
the path to accurate, detailed,
insightful reporting is paved with
new technology, and the finance
chiefs who were surveyed often
find their technology lacking.
When asked about the state of
their finance function’s technol-
ogy, most of the survey respon-
dents—a combined 63%—chose
technological states described
as “inefficient,” “silo-con-
strained,” or “not linked to deci-
sion-making.” Only 14% reported
that their finance functions are
at an “optimized” technological
state. (See Figure 1.)
Wanted: More Tools
CFOs who are not supported
by the level of financial report-
ing technology they need can
be hamstrung, along with their
companies, for future planning
and initiatives. According to
the CFO Research survey, only
12% of the respondents said
they “strongly agree” that their
current technology is flexible
and agile enough to support
future business-strategy and
business-model changes over
the next two years. And only
11% strongly agreed that their
finance function uses technology
to support new business-innova-
tion initiatives.
For current issues, this lack of
support can cause bad decisions
or more reactive decisions, as
the CFO struggles to see the
root cause of an issue. For future
issues, this lack of support pre-
vents the ability to re-forecast,
course-correct, and make strate-
gic decisions on customers and
product lines. In both instances,
the CFO’s core role in supporting
growth and innovation is effec-
tively stymied. The finance ex-
ecutives in the survey explained
that “CFOs can concentrate on
the business aspect more than
the compliance factor” and
“technology will allow better use
of data to make decisions.”
2 I HINDSIGHT, INSIGHT, FORESIGHT
FIGURE 1 Which of the following choices best describes where your finance function is on its technology “transformational journey”?
Don’t know
47%
12%
6%12%
11%
29%
20%
14%
23%
3%Optimized (enabling data-driven
decisions and supporting high performance)
Unified (using cross-functional processes and
common KPIs)
Integrated (connected across the enterprise, but not linked to decision-making)
Aware (process-proficient but silo-constrained)
Reactive (inefficient and using basic tools such as Excel spreadsheets)
One area that poses a challenge
to CFOs and financial reporting
is big data—both the large, com-
plex data sets and the advanced
analytics that extract meaning
from them. With the advent of
big-data collection, storage and
retrieval, many companies are
overwhelmed by the possibility
of accessing data and analytics
on their customers, their markets
and, increasingly, their business
processes. In fact, many compa-
nies find themselves data-rich
but information-poor. Accumu-
lating and storing vast amounts
of data is the easy part; finding
actionable insights is extremely
difficult without analytics solu-
tions that executives can use
quickly and easily.
And companies that find them-
selves armed with powerful new
management technologies, such
as enterprise resource planning
systems, still can lack the other
tools or data-retrieval tech-
nologies they need to take full
advantage of the new technol-
ogies. In many cases, the chal-
lenge is that relevant information
resides in disparate systems,
and the task of bringing all this
information together in real-time
is challenging.
More than three-quarters (76%)
of the finance executives sur-
veyed by CFO Research believe
that implementing a strategy
to leverage big data is funda-
mentally challenging, and 62%
believe the value realized from
big data strategies exceeds the
cost of that challenge. These two
findings show that CFOs know
that important trends and pat-
terns exist in the disparate data
that surrounds them – which
can lead to better and faster
decisions – but getting that data
organized and analyzed from a
process standpoint appears at
first look to be a daunting task.
The surveyed finance execu-
tives also spoke out about these
trends in discussing how finance
should better support innovation
in their companies. “We need to
have a more detailed and accu-
rate data warehouse. Our ERP
system is strong but we need
to have better access to data,”
wrote one executive. Another
executive indicated that his com-
pany needs a better big-data
warehouse so his finance depart-
ment can pull out specific met-
rics and trends in the data. And
another executive wrote that
CFOs also must “adapt to and
meet evolving reporting needs.
As more information is available,
better reporting is needed.”
FIGURE 2 Technology and the CFO (percentage of respondents who agree that…)
47%
12%
6%12%
49% Advances in technology
will fundamentally change the role of the CFO over
the next two years
3 I HINDSIGHT, INSIGHT, FORESIGHT
A More Strategic Role
As CFOs adopt more advanced
tools for financial reporting,
some of the surveyed execu-
tives expressed the belief that
the role of the CFO will become
more strategic, and involve more
planning rather than reporting.
“Technology is the key, and it
can act as a major boost, espe-
cially to the finance function of
the organization,” wrote one ex-
ecutive in the survey. Technology
“will free up so much of finance’s
time, which they now generally
spend in collating the data for its
presentation.”
Another of the executives in the
survey wrote that technology
helps make “dependable and
authentic information available
to the CFO,” which leads to fact-
based decision-making, business
support, and strategic planning.
“Efficiency and agility with
which the CFOs need to operate
in today’s world will be support-
ed,” the executive said, “and
technology will also get rid of
non-value-added and repetitive
finance support functions.” That
in turn will allow the finance or-
ganization to become more stra-
tegic by gaining a better under-
standing of what the company’s
results actually mean, enabling
an increased focus on the drivers
of business performance.
Also, wrote another executive,
finance can “use data and an-
alytics to deliver greater value
while maintaining or reducing its
budget overhead.” About half, or
49%, of the survey respondents
said they believe that advances
in technology will fundamentally
change the role of the CFO. (See
Figure 2.)
Conclusion
New and advanced financial re-
porting tools influence not only
the effectiveness of the CFO,
but also the current and future
performance of the company.
Without the tools that technol-
ogy can provide for finance, the
CFO’s abilities are constricted,
especially for strategic deci-
sion-making and planning. Com-
panies that provide technology
to their CFOs will benefit from
both the immediate bottom-line
improvements in their finance
departments’ efficiency, as well
as from the long-term advantag-
es from the evolving CFO’s role,
including fact-based, detailed
analysis and planning.
“TECHNOLOGY WILL FREE UP SO MUCH OF FINANCE’S TIME, WHICH THEY NOW GENERALLY SPEND IN COLLATING THE DATA FOR ITS PRESENTATION.”
4 I HINDSIGHT, INSIGHT, FORESIGHT
5 I HINDSIGHT, INSIGHT, FORESIGHT
Longview makes performance
software for the Now business
realities. Hundreds of thousands
of business leaders from Global
2000 companies, operating in
more than two hundred coun-
tries, leverage Longview daily to
make strategic and immediate
business decisions based on
Now business realities.
Their performance management
software drives the advantage
of planning with critical insights
into vast and disparate data
points. Longview brings budget-
ing, forecasting, tax reporting,
analytics and the financial close
to its single platform for out of
the box performance manage-
ment.
With the recent merger of
Longview and Tidemark the art
and science of corporate plan-
ning came together. Longview’s
25+ years of corporate planning
domain knowledge with Tide-
mark’s state of the art cloud-
based platform deliver the most
robust and innovative corporate
planning solutions in the mar-
ket place. Longview and Tide-
mark customers from around
the globe unite. They attest to
Longview continuing to deliver
and now with increased innova-
tion and creativity delivering the
platform of the future, powered
by experience.
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