SYDNEY – 13 November 2017: Effective fiscal management is vital for all Australian companies, and finance professionals are increasingly being included in board-level decisions, according to new research.
The FSN Modern Finance Forum 2017 Survey research report commissioned on behalf of BlackLine, a leading provider of financial automation solutions, found 45 per cent of respondents believe they are nearing the goal of having an active role in board-level strategic planning and decision making. A further 17 per cent say they are already doing so.
“The results show a gradual improvement in the relationship between the finance function and senior management within many Australian companies,” said Ann Furlong, APAC Director, BlackLine. “This is encouraging at a time when firms are experiencing a period of rapid economic change and evolving market conditions.”
However the survey shows there is still more work to be done. While almost a third (30%) of respondents report they act in an advisory role to other business units, 67 per cent say this involvement is still being initiated too late to allow effective advice to be given about critical commercial developments. Almost half put this situation down to a lack of trust in the finance department.
Another challenge comes in the form of finding sufficient hours in the day to have more interaction with the business. Of the CFOs surveyed, 53 per cent say they are unable to find the time to invest in business partnering. Many find themselves having to spend too much of their day on heads-down transactional tasks rather than undertaking strategic thinking and providing advice.
The survey found 62 per cent of senior financial professionals point to information management as a constraining factor when it comes to effectively partnering with other business units. Because it is easy to manipulate data to support a foregone conclusion, finance executives often do not trust reports produced in other parts of the business.
While a large proportion (81 per cent) of respondents believe Chief Financial Officers will be responsible for corporate data in the future, almost two-thirds say an inability to master the variety and volume of new business data poses a serious threat to the future finance function.
Of those surveyed, 78 per cent agree decision making has become more data driven during the past three years, however they say the data they need remains disorganised and difficult to access. More than half (58 per cent) say valuable data is scattered across their organisation and 48% confirm other functions are not good at sharing their data with the finance department.
“These results highlight a key challenge faced by many organisations which is finding a way to effectively manage the core data needed to support the finance function,” said Furlong. “Work needs to be done so that data sharing becomes the rule rather than the exception.”
Embracing new technologies
Senior financial professionals know they need to embrace new technologies to help them transform the finance function, however many remain unsure of exactly what strategy to take. The research found just 6 per cent of finance executives feel certain they fully understand the technologies available to them. Just a further 31% say they broadly know what is available on the market.
Even when the most appropriate technology has been identified, 56 per cent of senior finance professionals say they are unable to find the internal resources required to manage an implementation project. More than half say the pressure of regular reporting prevents them from finding a large enough window of opportunity to roll out a new system.
“As a result of these constraints, within many organisations the finance department is falling well behind when it comes to adopting new technologies,” said Furlong. “Many CFOs report they don’t have the time or the knowledge to implement new technologies, yet they acknowledge that the finance function is becoming more tech dependent. This situation must change.”
Interestingly, CFOs are increasingly turning away from consultants and advisors and toward technology vendors to assist with transformation projects. While 65 per cent still see external consultants as a viable option more than half (55 per cent) prefer to go directly to selected vendors.
The role of innovation
Although innovation is a current buzz word across the business sector, CFOs and finance professionals appear to be missing the opportunities it can provide. Just 16 per cent of survey respondents rank innovation as an area where they can add economic value to the business. This was significantly lower than strategy management (40 per cent), performance management (38 per cent) and business partnering (43 per cent).
When it comes to innovation through the use of new technologies, 41 per cent of those surveyed remain unconvinced there will be a sufficient return on investment to migrate away from existing legacy finance systems while 53 per cent say they are struggling to convince the board to prioritise investment in new financial processes.
“Innovation must be tied to business value,” says Furlong. “Evolving areas such as continuous accounting techniques and Robotic Process Automation are helping to drive this innovation and are assisting many organisations to reduce accounting workloads by 50 per cent.”
“By embracing new technologies and using them to underpin innovation in work practices, financial professions will be better placed to support their organisations reach their future goals.”
BlackLine is a provider of cloud-based solutions that transform Finance and Accounting (F&A) by automating, centralising and streamlining financial close operations, intercompany accounting processes and other key F&A processes for large and midsize organisations. Designed to complement virtually all ERP and other financial systems including SAP, Oracle and NetSuite, BlackLine increases operational efficiency, real-time visibility, control and compliance to ensure end-to-end financial close management and accounting automation from within a single, unified cloud platform.
Enabling customers to move beyond outdated processes and point solutions to a Continuous Accounting model, in which real-time automation, controls and period-end tasks are embedded within day-to-day activities, BlackLine helps companies modernise accounting operations with intelligent automation, ensuring more accurate and insightful financial statements and a more efficient financial close. Nearly 2,000 companies with users in over 130 countries around the world trust BlackLine to help ensure balance sheet integrity and confidence in their financial statements.
BlackLine is recognised by Gartner as a Leader in its 2017 Magic Quadrant for Cloud Financial Corporate Performance Management (FCPM) and as a pioneer in the cloud market for enhanced financial control and automation of FCPM.
Based in Los Angeles, BlackLine also has regional headquarters in London, Singapore and Sydney. For more information, please visit www.blackline.com.