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Majority of CFOs not ready for digital transformation, cite data as top challenge

Majority of CFOs not ready for digital transformation, cite data as top challenge

New survey highlights priority areas for CFO and CIO collaboration

More than half of CFOs use more than 2 different systems to collate their data - in New Zealand, almost 1 in 5 respondents rely on more than six data sources

The proliferation of digitalisation and technological enhancements in the workplace has seen the CFO role evolve to include more strategic, technical and operational elements.

Integrated robotics, automation, real-time analytics, AI, machine learning, blockchain, and virtual clouds are just some examples of the new and digitally disruptive concepts being implemented across industries that are impacting the role of finance chiefs.

“Finance teams already face an unenviable task of predicting the future, while managing their conventional workloads and meeting their obligations in achieving business growth,” says James Harkin, vice president of Workday Financials. “Meanwhile technology disruption is revolutionising the finance function.”

“Finance professionals are now expected to be knowledgeable on digitalisation, IT services and even cybersecurity – the finance role is moving beyond the traditional finance function,” he states.

DX as BAU

More than half (58 per cent of) of CFOs in the Asia Pacific told Workday their finance teams have been subjected to digital transformation (DX) initiatives over the past year.

But just over a quarter of these executives say they are prepared and involved in such changes, according to a new survey by Workday of 337 CFOs and other finance leaders in Australia, New Zealand, Singapore and Hong Kong.

The report, Finance Disrupted: The Changing Role of the CFO in Large Enterprises, shows a growing appetite for real time data and analytics in companies, as they concurrently tackle the spate of cybersecurity breaches, says Workday.

Workday, which conducted the interviews in February and March this year, says the respondents were vice presidents in audit and/or compliance, C-Suite executives in accounting, and directors in financial planning and analysis in companies with 1500 or more employees.

Working closely with ICT

The survey further highlights the imperative of close collaboration between CFOs and CIOs.

Although most finance professionals are generally satisfied with their existing systems, software and technology, respondents acknowledge pockets of discontent and opportunities for improvement.

Finance professionals are now expected to be knowledgeable on digitalisation, IT services and even cybersecurity

James Harkin, Workday

More than half (64 per cent) of respondents say they intend to move their finance systems to the cloud, with one-third (33 per cent) expecting to do so in the next six to 12 months.

“The uptake of cloud is on the rise because of the ever-increasing pressure for finance to be a more strategic partner to the business,” says Harkin.

“Finance leaders are now having to answer questions such as: Where do we grow fastest? Where do we need to invest, and what are potential expansion areas for the business? This is challenging because the technology to support accounting that many businesses have in place was never designed to support finance as a business partner, so they are now having to transform to meet the needs of the business.” 

Finance professionals cite the lack of data and insights as a top challenge. 

In the survey, 49.5 per cent of respondents state the lack of up-to-date market knowledge and solutions was a significant barrier to providing more strategic advice. This is followed by a lack of industry benchmarking for comparisons (48.5 per cent) and lack of time and resources (46.5 per cent).

Most finance professionals say they lack a single source of truth for data, with more than half (56.7 per cent of respondents) using more than two different systems to collate their data, and 16.2 per cent using more than six sources for data collation.

The survey finds this is highest in New Zealand and Singapore where almost one in five of respondents (18.8 per cent) rely on more than six data sources. 

A lack of data and insights was seen to be one of the core barriers for finance teams to be more strategic, with almost half of respondents citing a lack of up-to-date market knowledge (48.7 per cent) and lack of market or industry benchmarking for goal setting (49 per cent) as the two biggest barriers.

“Finance leaders are now realising that moving to the cloud and consolidating their systems gives them real-time data analytics capabilities that can help inform decision-making, manage risks and plan for the future. It also enhances security," says Harkin.

The report concludes: “Ultimately, finance professionals will have to be at the forefront of technology and innovation, harnessing real-time reporting and cloud capabilities, in order to drive companies forward and become true business partners to their CEOs.”

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