A survey by Cap Gemini Ernst & Young of 265 large US companies saw the CFOs point to this list of issues whose solutions would better allow finance departments to meet the future:
- Inadequate processes
- legacy information technology (IT)
- insufficient skills sets for finance staff
- the need to build senior management support.
Eight of 10 bought into the notion that accurate revenue and earnings forecasting is either a “high or the highest priority” in the present business climate, and 93% believe they are complying with all external reporting requirements.
But some 63% of the CFOs said they were burdened down with inadequate budgeting and forecasting. Other issues keeping finance departments from rising to the occasion, according to the CFOs, were:
- near-term pressures such as operating in the weak economy
- increased scrutiny of accounting and reporting practices
- greater demands for up-to-date information that can be acted on immediately
- demand for almost immediate positive return on investment.
Because they are being asked to do more with less, respondents cited costs and time commitments, and organizational and cultural barriers, including upgrading staff, as the main challenges to the transformation process.
Although CFO roles have shifted somewhat over time,
finance transformation has taken on a new urgency for many
companies. Many of the most pressing issues CFOs
face depend on enhancing finance’s capabilities,
according to the survey respondents.
Cap Gemini Ernst & Young collaborated with CFO Research Services to conduct the survey in May 2002. Respondents included chief financial officers, corporate controllers and other senior financial officers of large companies in various industries, including manufacturing, retail, chemicals, energy, telecommunications, financial services and health care.