Managing unexpected changes to financial forecasts (49%), identifying how to align strategic, financial and operational plans towards common objectives (39%), and meaningfully analysing data generated across business units and/or regions to develop effective cost containment strategies (37%) are the top three challenges that they face in executing their day-to-day activities. These reveal a broader concern to keep up with the pace of change and effectively work together with other functions to steer the business amid change.
Although nearly half of respondents strongly agree that the finance function should facilitate collaborative enterprise planning, only 29% strongly agree that they feel empowered to drive strategic decisions, significantly lower than the global average (45%).
But although nearly half of respondents strongly agree that the finance function should facilitate collaborative enterprise planning, only 29% strongly agree that they feel empowered to drive strategic decisions, significantly lower than the global average (45%). This may stem from internal resistance to collaboration—they were the most likely of all countries in the survey to cite resistance to collaboration from heads or members of other divisions as a challenge (28%), significantly more so than respondents in other European countries surveyed (9%) and elsewhere globally (16%).
As such, finance professionals in the UK and Ireland must find ways to enhance collaboration and craft a clear path to more engagement with other functions.
Taking stock: collaboration for spend management
For finance professionals in the UK and Ireland, the top benefit of collaboration is a better understanding of the business, including intransigent and recurring costs. Effective collaboration with the right functions can help to optimise spend.
One example is their approach to managing inventory costs, considered the second most challenging cost component (after technology investment) among finance executives in the UK and Ireland. To manage this cost more effectively, they believe the function they need most collaboration with is procurement and supply chain, chosen by a significantly higher percentage of respondents (55%) than elsewhere globally (38%) or in Europe (39%).
One of the top activities they are currently involved in with procurement and supply chain may contribute to this—effective supply-chain finance management, which would include an analysis of the cost of inventory. They have expressed a desire to work more closely on supply-chain strategy development going forward.
More engagement with other functions could pave the way for better management of other challenging spend components for finance executives in the UK and Ireland, including technology investment, capital expenditure, raw material costs and government/regulatory authority fees.
Time for collaboration
To manage spend management across the business more effectively, finance professionals in the UK and Ireland have relied on introducing software to share information for better decision-making and automating activities to reduce costly errors most frequently.
Given this preference for technology-led solutions, the relatively lower anticipation of automation of the role of the CFO is hard to reconcile. In the UK and Ireland, half of respondents expect 20-40% of this role to be automated in five to ten years; globally half of respondents expect 30-50% in the same time period.
Around the world, finance executives expect the automation of the role of the CFO to free up time to work more closely with other functions and drive operational decisions. It is important to recognise this as, in trying to have more and better collaboration with other business functions, CFOs and their direct reports in the UK and Ireland say that limited time to collaborate with other functions given their current workload is the top impediment.
So, if time is an issue for CFOs and their direct reports in the UK and Ireland, what would they do if they had more of it? When asked what their company would seek to do if automation freed up 30-50% of the team’s time, the top two most popular choices were to spend more time training the team on more advanced financial/technical skills and create a taskforce to focus on strategic projects, both chosen by nearly half (49%) of those surveyed.
When asked what their company would seek to do if automation freed up 30-50% of the team’s time, the top two most popular choices were to spend more time training the team on more advanced financial/technical skills and create a taskforce to focus on strategic projects, both chosen by nearly half (49%) of those surveyed.
Strategic projects they refer to may entail greater involvement in talent acquisition and recruitment strategies with HR; brand positioning, brand value and reputational risk assessment with marketing; and guiding regional management on evolving tax procedures and business regulation with operations.
Certainly for those in the UK, the prospect of Brexit has created a challenging economic landscape with many unanswered questions and an overall impact that is yet to be seen. Working with operations in steering the business through an evolving regulatory environment will be particularly important for finance executives there.
