CFOs and finance teams have become data-reliant. The increase in automation, combined with new technologies dictating how finance teams develop and leverage data, makes a data a company's second-strongest asset next to its people. But, the quality of that data may not be meeting standards.
According to Pigment’s Office of the CFO 2024: Expectations vs. Reality survey, CFOs are doing their best with the data at their disposal. But despite the confidence finance leaders are known to portray in their decision-making, the foundation of those decisions — the data — is knowingly poor. So much so that nearly 89% of CFOs say they are making decisions based on inaccurate or incomplete data on a monthly basis.
And while confidence in short-term planning is high, it wanes as prediction timelines increase. Survey results show that, while 60% of finance leaders are confident in making decisions for the next quarter, only 25% are confident in making decisions a year out. Over half (55%) also added they lack visibility into the basic business strategy needed to provide strong, organization-wide strategic guidance.
The Pain of Low-Value Work
As the CFO role has become more strategic and less focused on solely the accounting aspects of the business, many still feel they are unable to branch out into other areas because they’re bogged down by low-value tasks. Nearly all (98%) of respondents say they are putting off important strategic work for tasks including administrative work, data collection, and reporting.
More than half (54%) of those surveyed say they are doing work that doesn’t add value, and 42% say they aren’t developing capabilities and skills through their work. Just under four in 10 (38%) say they are de-prioritizing long-term growth planning, while a quarter (25%) say they are putting off revenue increase initiatives because of low-value workloads.
Collaboration is also lacking between finance and the rest of the company. While some companies have used collaboration to keep employees fresh and motivated, the survey indicates a significant portion of finance teams aren’t doing so. One-third (33%) of respondents report a lack of collaboration on strategy with other areas of the company is holding them back from being seen as strategic advisors.
Fix the Problem
Technology, according to those surveyed, is the answer to the issues finance teams are facing. Even with the risk of adding “shelfware” to the company tech stack, it’s important to know not only what technology is needed, but which specific solution would best help a specific challenge.
Over three-quarters (76%) of finance chiefs said having access to the right types of technology is critical for the finance team to achieve key goals. Sixty-eight percent of those surveyed said they expect their company to increase their investment in financial planning technology over the next 12 months.
Artificial intelligence (AI), a major element of the future of both finance and technology, may also help eliminate some of the low-value work. Finance leaders say AI may be able to simplify finance a bit, making the decision-making around it more accessible for other areas of the company.
Forty-four percent of those surveyed said AI allows leaders to use finance tools without any specialist training, which will ultimately add value to the technology. Over a third (36%) said it can bring more people from outside finance into the planning process. Just under a third said being able to use plain language searches within data, alongside its time-saving properties for finance leaders, will add value (31% and 29%, respectively).
All respondents worked at a firm with 500 employees or more with the data being collected between August 29 and September 11, 2023. Forty percent of respondents were C-suite executives. All respondents had a manager title or above.