Financial planning and analysis has emerged in recent years as a cornerstone of an effective finance function. Still, whatever advancements in FP&A quality have been achieved, they’re apparently not enough to satisfy CFOs.
The consulting firm polled 393 participants with a broad range of titles, including 119 CFOs or vice presidents of finance. This article cites responses from that subset.
FP&A was even ranked ahead of strategic planning, and by quite a bit. Survey participants ranked each finance process on a 1-10 scale, where 1 reflected the lowest priority and 10 the highest. Seventy percent of them rated FP&A as an 8, 9, or 10, compared with 60% for strategic planning.
Next came profitability reporting and analysis (58%), internal controls (52%), period-end close (45%), financial risk management (43%), external reporting (38%), competitive intelligence (36%), order to cash (23%), and procure to pay (23%).
Such former top-priority responsibilities as reporting financial results and ensuring the accuracy of financial statements “are now a given and are viewed to be, at best, a baseline of responsibilities for a finance leader,” Protiviti wrote in its survey report. “CFOs today need to be more forward-looking and have a less retrospective view.”
Organizational leaders, from the CEO on down, increasingly seek detailed, real-time insights from finance about products and services, the report continued. “What is profitable. What products and services are our best performers? In which markets are we performing well, or underperforming? In which functions or markets can we increase our profitability?”
Such insights are, of course, highly dependent on the availability and quality of data. Protiviti also asked survey participants to rank the priority of 16 areas of concern for finance — again in terms of improving knowledge and capabilities over the next year — and the top three were all about data.
Three-quarters of respondents gave an 8, 9, or 10 rating to “security and privacy of data in finance applications.” Next were “enhanced data analytics” (62%) and “data analytics process improvement” (53%).
Close behind were “changing demands and expectations of internal customers” (52%), “challenges with regulations” (49%), and “cloud-based applications supporting finance” (47%).
Of least concern — getting low ratings of 1, 2, or 3 — were virtual currencies (72%) and blockchain/smart contracts (52%).
About virtual currencies, Protiviti wrote that “any potential uses and long-term plans finance organizations may have … are of a more hypothetical nature, as opposed to specific aspirations.”