Sydney, 18 June 2018 - Nine out of ten finance executives want to lead a truly innovative project, with most prepared to shift jobs for the opportunity, a new survey has found.
The survey, Innovation in the Finance Function, was conducted by FSN on behalf of BOARD International. It is based on a survey of 1037 senior finance professionals from across the globe.
Finance functions vary in their commitment to innovation. Though it is seen as broadly desirable, few afford their people the remit or resources to innovate effectively. Today’s research shows for the first time the advantages that finance - and the broader organisation - enjoy when barriers to innovation are broken down.
Currently, only 34 percent of organisations surveyed identify as being committed to innovation.
Out of this figure, 23 percent participate in innovation work outside of the finance function.
For the remainder, innovation occurs within finance only. That often leads to outcomes that improve finance processes or performance, but have little visibility in the broader organisation.
The target state for finance is to be seen as a “true innovator” that is able to strike an appropriate balance on the projects that it invests resources and energy into.
“True Innovators are those finance functions that are early adopters of technology, have an active culture of innovation, make time for it, reward innovation and play an active role in innovation across the entire enterprise,” said Mark Sands, General Manager Asia Pacific, BOARD International.
“These are CFOs and finance executives who have stepped out from behind the finance desk to take an active role in innovation across the enterprise, not just within their own sphere of influence.”
It’s a people problem
Innovation is often inextricably linked to technology investment or process improvement, but the survey found CFOs and finance executives struggle most often with finding people to execute an innovative vision.
Eighty-seven (87) percent of respondents said they needed to recruit people capable of implementing change.
Without the right people, major projects were unlikely to come to fruition on spec, on time and on budget.
This presented somewhat of a ‘Catch 22’ dilemma for organisations.
Innovative companies attract innovative people. Almost 90 percent of senior finance executives would relish the opportunity to lead a truly innovative project, and 73 percent would even change organisations to be more involved in innovation, the survey found.
However, 65 percent of executives surveyed report being in organisations that either lack the resources or support to invest in finance process innovation - let alone business-wide innovation - or that simply don’t bother to innovate at all.
These executives face a stark choice: continue to press the case for change in their existing organisations, or move to organisations that are already committed to change.
Finance functions that get innovation right typically strike a balanced approach to transforming both the back and front of house.
This is somewhat unusual in today’s climate, where a lot of effort is being poured into making organisations and processes more customer-centric.
Many banks and large corporates have active initiatives to make the customer the centre of everything they do.
But the survey found organisations that continue to focus on front-office functions to the detriment of back-office systems are slower and less accurate at forecasting than organisations with a balanced approach.
In addition, those that exhibited a balanced approach to innovation investment - about 28 percent of respondents - were also more likely to achieve success and recognition outside of the finance function.
Time to shine
Organisations with a balanced approach to innovation were least likely to be encumbered by legacy technology, modes of operation or ways of thinking.
Only 44 percent of balanced investors were worried that too many of their resources were tied up with legacy systems and traditional ways of working.
By comparison, between 73 percent and 81 percent of other organisations were worried about the impact of legacy systems and thinking.
“The implication is that balanced technology investors are already addressing legacy systems, recognising the limitations of both front and back office processes, and implementing the right technology to improve the efficacy of their resources,” said Sands.
Past surveys have executives are often unable to pursue finance process improvements or organisation-wide innovation because they have no time.
Unfortunately, the only way to free up time is to implement innovative improvements into their finance function, which they don’t have time to focus on, the survey report noted.
The hunt for insight
Eighty-five (85) percent of CFOs and their senior finance executives believe innovation is needed to drive better insights about the business.
This reflects the changing nature of the finance function from accounting powerhouse to strategic leader.
Finance sits at the confluence of all the business functions, and is best-placed to offer the sort of insight that can give organisations a competitive edge, the survey report suggests.
Better insight meant better information for management decision-making and a more robust strategic direction for the organisation because decisions could be data-driven.
Executives were broadly across data visualisation and - to a lesser extent - predictive analytics technologies to improve insight, but lacked knowledge around the use of newer tools like artificial intelligence and machine learning.
“In a competitive environment where decision-making speed is of essence, the need for immediate access to supporting information is key,” said Sands.
“This is where BOARD, as a digital decision-making platform, comes into its own, delivering key insights and supporting the decision-making process.”
For a copy of the report, please visit: https://www.board.com/en/fsns-innovation-finance-function-global-survey-2018
BOARD is the #1 decision-making platform for organisations of any size. Founded in 1994, BOARD International has enabled more than 3000 companies worldwide to rapidly deploy Business Intelligence, Corporate Performance Management and Predictive Analytics applications on a single unified and programming-free platform. The BOARD platform allows companies to achieve a single, accurate and complete view of business information and a full control of performance across the entire organisation, from strategic formulation down to operational execution. Thanks to its programming-free toolkit approach, global enterprises such as H&M, KPMG, DHL, Mitsubishi, NEC, Puma, Siemens, Toyota have rapidly deployed end-to end decision-making applications in a fraction of the time and cost associated with traditional solutions.
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