Senior finance executives worldwide have grown much happier with the performance of their teams over the past three years. In fact, they’re more satisfied with every aspect of that performance (see chart at the bottom), according to research results scheduled to be released next Monday by Accenture.
Finance teams are rapidly learning to operate in an environment of “permanent volatility,” Accenture writes in its report on a survey of 617 finance executives around the globe (half of them CFOs, a quarter finance directors and a quarter finance vice presidents). When the consulting firm performed similar research in 2011, 46% of finance leaders said permanent volatility had a high impact on the finance function. This year, 38% said so.
“Finance functions are accepting volatility as the new norm instead of overreacting whenever something goes in a direction they hadn’t anticipated,” Christian Campagna, lead managing director for Accenture’s finance and enterprise performance strategy group, tells CFO.
The improved performance has been driven partly by a shift in focus. In post-recession 2011, Campagna notes, finance teams were still heavily focused on controlling costs, including those of the finance function. Now, he says, “they’re turning their attention to being more effective rather than focusing purely on efficiency.”
Among the survey participants, 67% identified “effectiveness of the finance function” as “very important” to the function’s overall performance, compared with 48% who said so for “efficiency of the finance function.”
Senior finance executives also feel less hamstrung by the shortage of top-quality finance talent. Only 21% of this year’s survey participants said talent issues had a high impact on the function, way down from 40% three years ago. Accenture, which also conducted in-depth interviews with 30 CFOs as part of its research, found that talent “is still a topic and will continue to be,” says Campagna. “But it’s a little less important.”
High-performance finance departments have smartly separated transactional work from analytical work, moving the former into shared-service centers and reserving the latter for top performers. “The opportunity to focus on analytical work is attracting and retaining talent,” Campagna says.
Meanwhile, 55% of survey participants cited complex legacy systems as being among their “greatest challenges.” Next, at 50%, was the need to optimize the enterprise’s capital structure.
Many large companies invested hundreds of millions of dollars into their ERP systems over the past 10 to 15 years, “and the majority are still not very happy, because there are multiple instances of the ERP and multiple charts of accounts,” says Campagna. “A lot of new systems were added because of globalization and M&A, and now CFOs don’t want to invest more hundreds of millions into another ERP rollout.”
Instead, with new enterprise technologies just around the corner, “they’re looking at how they can live with the current landscape for core finance, closing the books and reporting properly, but at the same time looking for platforms that offer insight and data analytics capabilities.”
CFOs might not feel so challenged in this area if they took charge of it. Only 27% of those surveyed said they are responsible for guiding, prioritizing and managing technology-investment decisions, while 59% said they provide input in that area and 14% are not involved in it at all. When it came to identifying what technologies should be retired as new ones are deployed, 19% said they are in control of that and 41% have input, but 40% have no role in those decisions.