B2B Payments

CFOs Are On The Path To Technology — Just Not The Right One


Digitization, automation and financial innovation are combined winds in a storm of disruption for the enterprise and its cash management strategy. That disruption is generally a good thing, if a company understands best how to wield the power of technology.

But a new report from corporate cloud company Adaptive Insights, its Q1 2017 CFO Indicator Report, says most chief financial officers — at the head of the pack when it comes to corporate cash strategy — don’t have the control over this disruption that they would like.

Indeed, according to the survey, 77 percent of CFOs said major business decisions have had to be put off because the stakeholders in that decision did not have access to key data fast enough. The data aggregation and verification process was picked as the top challenge for CFOs looking to meet requests for latest forecasts, cited by a third of executives.

Speed is a critical component to a corporation’s ability to be agile, but it seems, Adaptive Insights said, that as innovations and technologies create new opportunities for agility, they can also stand in the way of it.

“Corporate agility requires that organizations plan for multiple outcomes, particularly as economic conditions become increasingly uncertain, turbulent and competitive,” stated Robert. S. Hull, founder and chairman at Adaptive Insights. “CFOs can improve their organizations’ agility by accelerating the speed of scenario planning and analysis. By giving key stakeholders more immediate access to data, finance can dramatically improve decision-making — the key to maximizing corporate performance.”

There are key points in the financial analysis process that take the most time, because businesses are overwhelmed with data.

For instance, most CFOs said ad hoc analysis of data takes days — as many as five — when they would prefer it to take only one day. More than a third of these executives told researchers they would like to see their teams spend less time on report preparation and data collection so they can spend more time on actual forecasting and scenario analysis.

Nearly half of CFOs said it takes up to 11 days or more for a report to land in the hands of key stakeholders.

Technology Isn’t the Answer — Yet

When examining how long it takes a business to aggregate and analyze data, an initial reaction may be suggesting that a company implements more automated technological solutions. But Adaptive Insights’ research suggests companies have already done so.

The majority of CFOs surveyed, for example, said they have implemented reporting software. Nearly half said they have budgeting and forecasting software in place, and 44 percent said they have financial close and disclosure technology.

Researchers note that the enterprise has perhaps put its efforts into the wrong areas when it comes to adapting new tools.

Nearly half of CFOs said predictive analytics technologies would most contribute to enhancing their company’s agility and ability to quickly make financial decisions, yet with only 6 percent having implemented this tool, it is the least common type of software found in the enterprise.

The research around how CFOs will invest in new technologies moving forward may appear optimistic, but according to reports, progress is lagging.

These executives said dashboards and analytics, budgeting and forecasting, reporting, sales/operational planning and predictive analytics will be their top five technologies in which to invest by the end of the decade. But while CFOs have their eyes on these tools, they aren’t any further along on this journey this year than they were last year.

Adaptive Insights’ Q1 2016 report found that only a third of their firms’ infrastructure (33 percent) is based on SaaS technology today, though they hope to boost that figure to 60 percent by 2020. Q1 2017 analysis shows that the 33 percent figure remains unchanged.

“While CFOs want to believe they are agile enough for today’s business climate, admitted delays in decision-making due to a lack of timely data will not serve them well in an increasingly volatile and uncertain business climate,” the report concluded. “They will need to overcome the time deficits that currently exist in reporting and data collection so that more resources can be allocated to valuable analytics.”


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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