73% of finance leaders agree closer CIO / CFO alignment has become more important to achieving their finance transformation
Most are more concerned about the impact of change from outside their organization than from within
Over half say their existing finance system is unlikely to cope effectively with near future demands
The CFO has never been held more accountable for the company’s success, and the ability of finance teams to extract value from company data is the key to delivering on the chief executive’s expectations. Oracle’s study, Modern Finance: Driving Transformation from Within, found that closer alignment between the CFO and CIO is crucial if finance leaders are to effectively help the business achieve its transformation goals.
The study, for which 1,905 finance decision makers across Europe, Middle East and Africa (EMEA) were surveyed, set out to explore the risks and challenges faced by modern finance leaders and to gain more insight on what businesses are doing to address these changes.
More specifically, the findings reveal:
- Nearly 40% of finance leaders admit the finance department is becoming more accountable for the business’ success
- 45% admit they are under increased pressure to raise productivity
- 44% say the company is placing more emphasis on driving business growth
- 41% say they are being asked to reduce operational costs
Crucially, nearly three-quarters (73%) of finance leaders agree closer CIO / CFO alignment has become critical to achieving the business’ finance transformation
Loïc Le Guisquet, President, Oracle said: “Finance systems which have been heavily customized over the years are reaching their breaking point. 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. Finance should not be the ball & chain holding the company back from progress. It should be the engine pushing it forward.
“Rather than adding complexity to already-overloaded systems, companies are beginning to see the advantage of running their finance applications in the cloud and simply configuring these to suit their needs. As the nerve centre of the organization, the finance department lies at the junction of all these relationships. Their unique oversight of the business has made CFOs and their teams instrumental in helping the boardroom achieve its vision for the future.”
The report further reveals that finance leaders admit that change is increasingly out of the business’ control, with major economic, geo- and socio-political, and even climactic upheavals affecting companies’ fortunes like never before.
Over half (58%) of finance leaders are more concerned about the impact of change originating from outside their organisation.
- Roughly half as many (30%) are more concerned about change from within
- 44% cite macro-economic issues as a major driver of risk
- 40% cite increased competition and the rising cost of doing business as major external drivers of change
Finance teams need technologies that are up to the task of driving closer alignment between departments and helping the company to better manage risk. However, the study revealed that years of customisation have left businesses with inflexible and convoluted legacy systems nearing the limits of what they can handle, and that will struggle to manage the changes ahead.
- 61% of finance leaders have customized systems in place which have been growing in complexity over the years
- 54% say these are unlikely to cope effectively with the near future demands of their organisation
Configurable systems that are more flexible and easier to update are gaining some traction, but many businesses are held back from switching over by the perceived risk of moving to the cloud.
- 32% of finance leaders expect the cost of running a customized system to exceed that of moving to a standardized one in less than a year
- Three-quarters (74%) believe the use of financial software in the cloud is critical for them to realise their broader digital transformation goals
- 74% also say this would allow them to innovate more quickly and effectively
Yet many businesses are resistant to change:
- 69% believe moving to standardised, cloud-based financial applications represents a risk to their business
- 45% say increasing regulatory complexity is the biggest reason for resisting or having mixed views on moving to a standardized system
- 37% remain unclear on the benefits and return on investment (ROI)
- 30% admit a lack of alignment between finance and the wider business is standing in the way of change
“The digital transformation of a business requires greater levels of collaboration between every department in the organization, from Marketing to HR. This begins with closer alignment among line-of-business leaders, whose approach to working will ultimately be reflected across the entire company,” says Loïc Le Guisquet.