EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
Finance leaders need to revisit operating models and get better oversight over controls to make way for an agile and future fit finance function.
In brief
- Finance enablement and improved efficiencies are achieved through automation, digitalisation, and streamlining ways of working.
- A critical enabler for future focussed CFOs is having finance data structured in a way that enables performance monitoring, efficiency control, gap identification, and delivers insights in real time.
- The means by which data is collected and curated across the organisation needs to be optimised to deliver it to finance quickly.
CFOs are taking on a greater strategic role within organisations and are focusing on their role in finance enablement after a period of unprecedented disruption and rapid changes in both operations and workforce organisation.
The results of the EY Ireland CFO Survey 2023 indicate that CFOs are embracing these changes with 69% of the respondents saying they are excited to continue expanding their skills in light of evolving job functions.
In today’s business environment, finance enablement is about creating efficiencies and cutting costs. It is clear from the survey that finance enablement is high on the CFO’s agenda with 72% of respondents identifying “reducing cost and improving efficiency” as the top strategic area of focus over the next five years, with “automating manual tasks and processes” next at 37%. Indeed, 46% of CFOs identified “manual processes and controls” as the area where the most time is wasted in the financial function.
Optimising available resources
One of the key challenges facing CFOs in this regard is the widespread nature of the change which organisations have undergone. Organisations have grown both organically and through acquisition and this has naturally brought about change, but in many cases with no structured processes to accommodate it.
Similarly, workforce organisation has changed quite dramatically as a result of the pandemic and the digitalisation of organisations. However, there has been little time to consider whether the workforce models are either efficient or fit for purpose.
Finance leaders and CFOs are responding by reviewing their current operating models, skillset requirements, and process pain points with the aim of developing an agile and future fit finance function capable of delivering increased value to the business.
The chief difficulty facing most finance leaders in this regard is the limited budget available to fund transformation and cost cutting agendas. They are not in a position to invest in a new system to address the inefficiencies within the finance function. On the other hand, finance enablement and improved efficiencies are achieved through digitalisation, automation and streamlining ways of working.
That means getting more from what you already have and getting more done with the resources available by optimising and harmonising finance processes. This requires removing non-value adding redundant tasks, standardising ways of working, leveraging automation, gaining greater oversight over control processes and pain points, and upgrading skillsets within the finance function.
Those skillsets are particularly important when it comes to data management and analytics. A finance team’s ability to unlock critical insights from financial data is just as important as a smoothly run process.
Having finance data structured in a way that enables performance monitoring, efficiency control, gap identification, and delivers insights and predictions all in real time is a critical enabler for future focussed CFOs as they shape the strategic direction of the business and finance operations and manage overall business performance.
Streamlining data
The nature of the finance function’s interactions with other departments in the organisation is also important. For example, there is a case for the treasury function to handle many of the more routine calculations traditionally carried out by finance to free it up for more value adding activity.
Treasury alongside the CFO would extract value from data and deliver strategic insights through business partnering. Streamlining and automating data ensures that CFOs can have access to accurate and timely cash forecasting, real time payments and in-house banking functionality as well as full control of cashflows. Accurate risk analytics such as Value at Risk (VAR) and Cash Flow at Risk (CFAR) reports can ensure best use of financing, investment solutions or alternate financing.
Furthermore, the means by which data is collected and curated across the organisation needs to be optimised to deliver it to finance as quickly as possible. That point was highlighted in the survey with 26% of finance leaders citing delays in receiving information from business units and group entities as a key area where time is wasted.
In a cost reduction focused environment finance enablement and improved efficiencies are achieved through digital enablement, automation and streamlining ways of working.
Summary
The task facing CFOs is considerable. They need to address the inefficiencies which have developed in the organisation as a result of rapid change and growth at the same time as optimising existing systems in order to reduce costs and achieve greater efficiencies, all within a very limited budget. However, the results of the EY Ireland CFO Survey 2023 indicate that they are ready to take it on.
Related Articles
Why Irish CFOs are optimistic about growth but less engaged on ESG agenda
Cost cutting tops agenda for CFOs along with talent challenges, automation and cybersecurity. Find out what action CFOs need to take to stay future focussed.