The top three most pressing concerns for CFOs are measuring and monitoring business performance, providing inputs into enterprise strategy, and developing talent in the finance organization, according to a study released this week by IBM.
The report, “Pushing the frontiers – CFO insights from the Global C-suite Study,” aimed to get a better understanding of the opportunities and challenges the members of the C-suite face and how they are working together to support their organization. The study drew input from 576 CFOs worldwide and is the 17th in an ongoing series of C-suite studies conducted by IBM. Though the above concerns topped the list, 10 others have become more critical since the last CFO poll in 2010, including:
- Optimizing planning, budgeting and forecasting
- Driving enterprise cost reduction
- Supporting/managing/mitigating enterprise risk
- Driving integration of information across the enterprise
- Strengthening compliance programs/internal controls
- Managing investor/stakeholder relations
- Processing transactions
Are CFOs’ Concerns Being Addressed?
The report found “CFOs are dubious about how well their own finance organization fulfills some of these duties” and stated, “There’s a growing gulf between the importance CFOs attribute to certain activities and how well they think the finance team performs them.”
For example, only 47% of CFOs surveyed think they’re effective at measuring and managing performance. And 82% of CFOs see the value of integrating enterprise-wide information, but only 24% think their team is up to the task.
The report also indicates collaboration between the CFO and CMO is increasing, as finance chiefs increasingly weigh the customer’s perspective. “Enterprises in which the CFO’s ability to analyze alternative scenarios is coupled with the CMO’s ability to look outside the enterprise will be far better equipped to exploit opportunities the digital era offers,” the report said.
Perhaps most interesting are the labels the study places on finance organizations fitting certain profiles – and how organizations within certain profiles tend to outperform others. For example, Value Integrators are “better than their peers at integrating information from numerous internal sources. They’re also better at planning, budgeting and forecasting, and continuously fine-tuning everyday financial processes.”
Along the same lines, Performance Accelerators’ effectiveness “at integrating enterprise-wide information is double that of the remaining Value Integrators. Similarly, the percentage that are effective at continuously improving the processes they use is 43% higher, while the percentage that are effective at developing finance talent is 48% higher.”
How CFOs Are Developing Finance Talent
To answer why these finance organizations are better at developing finance talent, we reached out to Bill Fuessler, Partner, Finance, Risk & Fraud, IBM Global Business Services.
He said, “Based on our study, it is clear that the highest performing finance talent of the future will be those professionals that are able to master Big Data and analytics, collaborate closely with customers, and also possess a strong grasp of the digital domain. These focus areas have not typically been owned by the finance function, but they will truly differentiate tomorrow’s best finance talent, presenting a training and development challenge for today’s CFOs.”
I’ve written extensively about the Competency Crisis in accounting and finance departments – that is, the gap between what is being taught in college and the skills employers really need. Industry stakeholders have discussed tweaking the accounting curriculum to support a greater focus on management accounting career paths, and this study raises important questions about what management, marketing and other classes might be also be relevant, or even vital, for accounting education to support the needs of businesses.
Changing the curriculum is one potential answer to the competency crisis, but not the only one. According to Fuessler, solutions to talent development issues can be found within your own company, if you know where to look.
He said, “CFOs are also looking outside of the department – outside of their entire organization – to develop these skills within their existing team. Oftentimes, this means partnering more closely with the CMO and broader marketing function. As marketers look to improve their analytical skills and finance professionals need to better understand digital engagement and data streaming from social and mobile technologies, we see a stronger alliance building between these two groups, enabling new cross-training and knowledge-sharing opportunities that will help to drive improved customer experiences and organizational profitability.”
What other ways have you seen companies effectively developing finance talent?
Follow me on Twitter or visit imanet.org to learn how IMA® (Institute of Management Accountants) is working to advance the management accounting profession through research, the CMA® (Certified Management Accountant) program, continuing education, networking and advocacy.
Disclosure: IBM partners with IMA for the FP&A Solutions Center, a forum for sharing information related to financial planning and analysis that includes a library of articles, white papers and webinars.