In a recent survey conducted by The Economist Intelligence Unit and sponsored by SAP, half of respondents in Colombia cite managing unexpected changes in business forecasts and adapting finance processes to rapidly evolving business models as the top challenges they face when executing their day-to-day activities, compared with the global averages of 41% and 38%, respectively.
It is worth noting that the least challenging aspect for financial teams in Colombia was the resistance to collaboration from heads or members of other divisions, at just 4%, while 17% of global respondents highlighted this cultural challenge. This suggests a tendency towards collaboration to achieve the core objectives of the finance function.
A full 70% of respondents in Colombia strongly agree that finance should facilitate collaborative enterprise planning across the company to ensure operational plans are aligned with financial and strategic plans— relative to 56% globally.
In strikingly high numbers, Colombia’s finance professionals seem to recognise the importance of finance’s role in leading this collaboration. A full 70% of respondents in Colombia strongly agree that finance should facilitate collaborative enterprise planning across the company to ensure operational plans are aligned with financial and strategic plans—relative to 56% globally.
Meanwhile, they also evinced high levels of confidence in their own abilities to increasingly steer the business; 52% of respondents said that they feel personally empowered to drive strategic decisions across business functions in their organisations, relative to 45% globally.
This confidence seems to be a common trait among Latin American CFOs and their direct reports; 66% in Brazil and 54% in Mexico strongly agree that they feel empowered.
Optimising spend
There is clear evidence of their collaborative approach. For spend management, negotiating savings on contracts with existing suppliers is the top approach (cited by 30% of respondents), which is more collaborative than just switching to new and cheaper suppliers. This is the highest share of respondents across all countries surveyed and significantly higher than the average elsewhere in Latin America (13%).
Finance executives in Colombia report spending considerable time collaborating outside their own function. When it comes to collaborating with management/strategy, for instance, 34% reported spending more than 15 hours a month, relative to the 21% who registered similar hours globally. They were also significantly more likely than their global and regional counterparts to work with the management/strategy function to manage a variety of costs.
50% of Colombia’s finance executives believe that to manage technology investments more effectively, collaboration with the management and strategy function is imperative. This is nearly double the global response of 26%.
It seems clear that driving collaboration with management and strategy is more central to making technology investments (the most challenging cost component) in Colombia than it is in many of the other countries that were surveyed. Specifically, 50% of Colombia’s finance executives believe that to manage technology investments more effectively, collaboration with the management and strategy function is imperative. This is nearly double the global response of 26%.
The right steer
As Colombia’s CFOs and their direct reports act as an engine for increased collaboration within their own organisations, there are many areas in which they desire even greater involvement going forward, aimed at gaining a deeper understanding of the dynamics of each function. To achieve this, they want greater involvement in employee retention strategies with HR; developing marketing strategies at the product and market level with marketing and sales; and vendor selection strategies with procurement and supply chain.
The top challenge in these efforts is limited time to collaborate with other functions given the current workload. Anticipated automation of the CFO and finance team’s activities (in line with global expectations of at least 40% of activities over the next five to ten years) should alleviate time constraints.
Another key benefit of working closely with other functions, they say, is better risk management. Finance executives in Colombia point to specific activities across functions to achieve this, including employee conflict management and resolution with HR; customer conflict management strategies with sales and marketing; quality management of products along the supply chain with procurement and supply chain; and developing health and safety strategies as well as cyber-security risk analysis and strategies with operations.
The top challenge in these efforts is limited time to collaborate with other functions given the current workload. Anticipated automation of the CFO and finance team’s activities (in line with global expectations of at least 40% of activities over the next five to ten years) should alleviate time constraints.
Executives do seem convinced that greater automation will someday lead to positive developments for charting strategic direction and training their teams on important skills. Only a relatively small percentage of respondents in Colombia (20% v 28% globally) expressed an interest in using productivity gains to reduce the headcount. Instead, if more time were available, 52% of finance executives would create a task force to focus on strategic projects, while 60% would spend more time training the team on advanced financial/technical skills.
Collaboration with business functions is viewed as a mechanism for CFOs and their teams to steer their companies towards better outcomes. The activities they have prioritised for the future can enable a CFO to do so in the face of unexpected changes. Importantly, it will deliver a key benefit finance executives in Colombia believe can be gained through effective collaboration—more accurate financial forecasts, which directly addresses the top challenge they face on a day-to-day basis.
