14 August 2008:
Three out of four Chief Financial Officers (CFOs) will place a greater emphasis on strategic business issues over the next 18 months, pointing to a redefining of their traditional role, according to the Deloitte 2008 CFO Survey. The need for good internal control, effective financial governance and efficient finance operations, which have received significant focus in recent years, must be balanced with proactive involvement in business strategy.
A total of 63% said they would place more emphasis on being a ‘catalyst’ within their business over the next 18 months, indicating that CFOs see their role as evolving from the traditional role of steward to one that also assumes the additional responsibilities of the dynamic business leader, supporting and stimulating business performance.
The two key priorities identified in the survey were, firstly, to provide better information to the business and partnering with the business to take proactive decisions based on that data, and secondly, cost control.
Commenting on the results of the survey, Shane Mohan, Partner, Deloitte Consulting said: “It’s clear that CFOs in today’s much more uncertain economic environment are dealing with numerous challenges and they both expect and need to play an increased role in the strategic direction of the business – providing information to enable better business decisions to be made. They also need to provide answers to questions such as ‘what parts of the business, customers and products are profitable?’ and ‘where can we drive greater cost efficiencies?’”
Six out of 10 respondents highlighted that they thought the finance function within their organisation spends too much time on financial and management reporting rather than on understanding what is driving the business. Similarly, 94% of respondents disagreed when asked if the finance function should focus on financial reporting and let the business focus on non-financial measures.
The survey also found that many cost saving measures have already been implemented or are under consideration by Irish CFOs. 63% of respondents have already outsourced parts of their finance operations to third party providers – many of whom are based overseas - and 33% are currently considering this. More than half - 51% - have already implemented shared services centres, while 49% of respondents said that shared services centres were under consideration within their organisation. Shared services are not only being used to reduce costs, but also to build specific skills and capabilities within the organisation - as demonstrated by all respondents stating that they have either already implemented or are considering centres of excellence. Self-service operations, which can also reduce administrative headcount, are being implemented by 55% of respondents, with the remaining 45% considering this.
“The companies that will be successful in addressing the challenges identified will take a holistic view across the underlying management processes, information requirements, technology needs and the people/organisation dimension. In order to play a greater role in the strategic direction of the business, the finance function must take a greater view of the whole business,” concluded Mohan.
About the Survey
The Deloitte CFO Survey was carried out online. 118 CFOs participated from a variety of industries such as Financial Services; Consumer Business; Healthcare; Public Sector; Technology Media and Telecommunications; Energy; Construction and Manufacturing.