45pc CFOs find poor data a major cause of org’s mistakes

|June 18, 2015 0
Image courtesy of Idea go at freedigitalphotos.net
CFOs that rely on empirical data for decision making as opposed to instinct had greater profits

MUMBAI, INDIA: Over 46 percent of CFOs rely on “gut-feel” and instinct to make business decisions in lieu of fast access to accurate internal data, a practice that can delay decision making, introduce errors, and erode profitability.

These are just a few negative outcomes stemming from the data deficit challenges CFOs face, according to new research based on a global survey of over 1,500 financial decision makers announced by Epicor Software Corporation.

The research reveals that an inability to access the right financial information is having a direct impact on business performance and CFOs’ reputations. Of those polled, 45 percent say poor data hampers timely decision making,and inaccurate information is the main cause of organizational mistakes.

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CFOs in the manufacturing/engineering sector were the most likely to have a basic/legacy financial IT infrastructure and a high necessity to rely on instinct for decision making.

Survey results demonstrate that a lack of financial information was also shown to negatively affect corporate profitability.The more the CFO relies on empirical data for decision making, the greater the chances of higher profitability.

Within the survey sample CFOs that rely on empirical data for decision making as opposed to instinct had greater profits, with 72pc experiencing a profit increase.Nearly half of all CFOs (46pc) said “increasing profits” was their top business objective in 2015.

CFOs said visibility of financial information is often less than perfect in many areas; only around half surveyed felt they have “good visibility” of financial information including: overall and business unit performance, product line performance and profitability, sales and labor costs, sales forecasts, raw material costs, and customer profitability.

60 percent of CFOs said they still rely on Excel spreadsheets to gain access to data; this percentage was consistent across businesses of all sizes — including corporations with over $1B in annual revenues. Nearly one-third (32pc) surveyed say the financial IT system they currently use need updating.

When asked about issues having the biggest impact on finance and accounting in the business over the next two to three years, the top response was big data (28pc); other chief concerns included managing “regulations and compliance” and “increased complexity in the business.”

Another relatively new challenge that CFOs are grappling with — and which is necessitating greater information accessibility and responsiveness — is digital disruption.

Nearly half of CFOs surveyed have already deployed financial applications in the cloud –such as financial accounting, CRM, HR, forecasting and budgeting, business intelligence, and financial consolidation and reporting – or plan to do so within the next 12 months.

Over one-quarter of CFOs (28%) say that financial decision-making is hampered by a lack of time and resources to make effective use of information –contributing to one of the greatest CFO workplace hazards – job stress.

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