Three Critical Areas Where CFOs Drive Enterprise .../media/Files/us-files/...PREFACE pg 4 OPERATIONS...

Three Critical Areas Where CFOs Drive Enterprise Performance ImprovementsA NEW SURVEY FINDS THAT CORPORATE FINANCE LEADERS ARE LEVERAGING THE FINANCE FUNCTION TO DELIVER GREATER PERFORMANCE IN OPERATIONS, TECHNOLOGY AND TALENT.

2 FTI Consulting, Inc. THREE CRITICAL AREAS WHERE CFOS DRIVE ENTERPRISE PERFORMANCE IMPROVEMENTS

2019 CFO SURVEYFTI Consulting Report

CFOs need a bigger role in business

transformations; they need to be seen

as a catalyst for change.

PREFACEpg 4

OPERATIONSpg 9

TECHNOLOGYpg 19

KEY INSIGHTSpg 6

TALENTpg 15

CONCLUSIONpg 26

CONTENTS

THREE CRITICAL AREAS WHERE CFOS DRIVE ENTERPRISE PERFORMANCE IMPROVEMENTS FTI Consulting, Inc. 3


We believe the insights from our

survey showcase a greater opportunity

for CFOs to make an enterprise-wide

impact in their organizations.


2019 CFO SURVEYFTI Consulting ReportFTI Consulting Report

One of the most common challenges I hear from CFOs is that they are curious to know how their peers are doing, what issues they’re grappling with and how they are addressing those issues. Further, they’ve told me that it is difficult for them to find the time, or the right forum, to share and learn that kind of information. This is why we partnered with CFO Research to create our survey report. We’ve long known that the CFO’s job is expanding into a variety of areas, so instead of producing another survey confirming what we already know, we decided to provide a way for finance leaders to share their insights and recommendations, as well as illustrate how they are succeeding with their expanded responsibilities. We believe the insights from our survey showcase a greater opportunity for CFOs to make an enterprise-wide impact in their organizations. Thank you for reading our survey report and I hope you find it valuable.

PREFACE

Gina Gutzeit, Senior Managing Director

Office of the CFO Solutions Leader

FTI Consulting



CFOs ARE PLAYING A BIGGER ROLE IN BUSINESS TRANSFORMATIONS.

Leading finance executives are catalysts for change in their organizations. They are having the greatest impact for their enterprises in operations, talent and technology.

CFOs CAN INTEGRATE FINANCE AND OPERATIONS FUNCTIONS TO ENHANCE ENTERPRISE VALUE, BUT INTEGRATION HAS ELUDED MOST COMPANIES.

CFOs can cultivate a better finance-operations partnership by understanding each other’s goals, identifying issues and offering recommendations. However, communication must be respectful, with a less directive, more supportive approach.

SOME CFOs ARE STILL MISSING THE BASICS.

A rather surprising number of CFOs report that their firms are not conducting routine tasks, such as variance analysis, which is leaving a gap in performance monitoring and improvement.

KEY INSIGHTS



CFOs ARE GETTING MORE INVOLVED IN TALENT MATTERS, BUT IDENTIFYING HOW TO WORK WITH CHROs REMAINS A CHALLENGE.

Only 39% of respondents believe their organization has an effective partnership between the CFO and Chief Human Resources Officer. Those who do work together are making an impact on hiring and retention, workforce planning and aligning required skills to business needs.

A STRONG PARTNERSHIP BETWEEN THE CFO AND TECHNOLOGY IS CRUCIAL TO BUSINESS PERFORMANCE.

CFOs are focusing on technology investments because of the competitive advantages that new and enhanced capabilities provide across the enterprise. But many companies aren’t trying to get more out of the IT infrastructure that they already have, so they’re missing an opportunity to improve performance without incremental technology investment.

CFOs ARE MORE ATTUNED TO THE OPERATIONAL PERFORMANCE OF THEIR COMPANIES. THEY’RE NOT JUST REPORTING FINANCIAL DATA — THEY WANT TO IMPACT THE RESULTS.

CFOs currently have substantial roles in supporting operations across the business. Being able to provide operations more with metrics that affect their bottom line will continue to bridge the “support” to “impact” gap.

THE AMOUNT AND TYPES OF DATA FLOWING THROUGH FINANCE PUTS THE CFO AND THE FINANCE TEAM IN POSITION TO HELP MAKE DECISIONS AFFECTING THE ENTIRE ENTERPRISE.

That means that the health and growth of organizations will rely on their ability to work with data. Due to volume, finance has more opportunities to analyze that data and generate effective insights.

THE RISK AROUND TECHNOLOGY INVESTMENT AND IMPLEMENTATION WILL CONTINUE TO RISE, DRIVING INCREASED SCRUTINY ON ROI AND ENTERPRISE-WIDE ACCOUNTABILITY.

As a result, CFOs must play a bigger role in making sure that these investments achieve their intended results and in building a more responsible technology investment process.



MORE COLLABORATION AND TRANSPARENCY TO GROW THE COMPANY

The enterprise-wide roles that many CFOs play are leading them to work more collaboratively with functional areas in their companies. “Companies are adopting a more holistic approach,” notes one respondent to this survey of CFOs and senior finance executives. Increasingly, senior executives within the finance function are contributing data, analysis, strategy, insights and other types of support that improve efficiency, effectiveness and overall performance — not only in specific functions, but for the entire company.

What’s driving this advancement? Historically, the CFO’s primary focus was on the financial integrity of the business and managing risk. However, investments in technology have led to significant achievements in these focus areas, enabling CFOs to direct more attention to enterprise performance, particularly in light of all the data that finance captures. The result is the evolution of CFOs and finance leaders who are able to drive increased value to their organizations in areas outside of their traditional realm.

Nearly 90% of those surveyed (including CFOs themselves) say their firm’s CFO currently plays key roles in supporting operations performance management, technology strategy and talent development. It’s clear to most CFOs that they must not only report on performance, but also positively influence performance wherever possible. One survey respondent wrote: “CFOs need a bigger role in business transformations; they need to be seen as a catalyst for change.”

How are they doing it? A recent survey conducted by FTI Consulting’s Office of the CFO Solutions practice, in collaboration with CFO Research, gathered responses from 157 senior executives with finance responsibility, including CFOs, directors of finance, controllers, VP/EVP/SVPs of finance and others, at a wide range of companies with revenues from

$100 million to more than $10 billion in a full gamut of sectors, including financial services/real estate, wholesale/retail trade, health care and insurance. In an effort to uncover best practices by leading finance functions, the online survey included both multiple-choice questions as well as open-response questions.

This survey shares insights into the expanding role of CFOs and how their engagement with their CEOs, in addition to partnering with COOs, CHROs, CPOs and

CIOs, can translate into superior performance for the enterprise, including shaping corporate strategy, implementing key initiatives and providing data, guidance and insight to ensure success. “We just need to be more collaborative and transparent with each other to grow the company,” noted one finance leader.

FTI Consulting Report

WE JUST NEED TO BE MORE COLLABORATIVE AND TRANSPARENT WITH EACH OTHER TO GROW THE COMPANY.



OPERATIONS



“THE CFO ROLE IS INCREASINGLY

BECOMING INVOLVED IN THE

OPERATIONS OF THE BUSINESS; FOR INSTANCE,

OUR CFO IS NOW RESPONSIBLE FOR

THE COMPANY’S INNOVATION

INITIATIVE, WHICH INCLUDES

INNOVATION ACROSS ALL AREAS

OF THE COMPANY.”

Transformational finance leaders seek a deeper understanding and greater insights into operations, and increasingly, the CFO and the finance function have the data, analytical expertise and stature within the organization to support operations performance management effectively. CFOs are also well positioned to provide valuable input on change management activities that support operational performance improvement.

Based upon survey results, operations was seen as the area where CFOs had the largest ability to impact the organization going forward. CFOs and their operationally focused counterparts see the value in additional finance support, through budgeting and forecasting to risk management. But overall, in leading organizations, a strong relationship between finance and operations has created real, positive impact, e.g.,

creating connections where finance is not just reporting out performance but also is working with operations and helping to influence ways to improve and transform business operations. The survey findings, however, also revealed that a number of respondents are not performing some common financial reporting tasks, which demonstrates a wide gap in the maturity of finance functions.

of those surveyed agree that the CFO has a substantial

role in supporting operations performance across the

enterprise.

88% 91%

of those surveyed say their CFOs either currently identify key areas of operational risk

or plan to begin doing so within two years.



A TWO-PRONGED ENGAGEMENT

Finance leaders cite two ways that they support enterprise operations: traditional finance support and insights enabled by advanced analytics

and big data. Traditional support includes providing timely cost analysis and variance to business leaders, identifying key areas of operational

risk, flagging variances from plan (positive and negative) and providing recommendations for remediation where appropriate (see Figure 1).

Despite a high level of engagement cited by finance leaders, several routine tasks, like cost and variance analysis, are still not conducted by many firms. More than a third do not flag variances within operations or work with the appropriate team to provide recommendations or remediation based upon findings. In addition, a substantial number of those surveyed say the support provided to the businesses is not in a format optimized for recipients.

One survey respondent confirmed the imperative to engage operations as follows, “Be operationally focused…actively engage and partner with operations executives and line leaders…monitor operational KPIs.” The root of this feedback is grounded in the notion that CFOs can help ensure that full value is being realized from operations by not only monitoring how costs are tracking, but also by being a proactive leader to optimize costs across the enterprise

including selling, general and administrative expenses; workforce; and suppliers. Another respondent commented on the opportunities the CFO has to manage operations risk, “Be aware of business risk and be fully engaged in everything that operations does, and don’t be afraid to ask questions.” Many manifestations of business risk are visible to finance through enterprise systems, such as a single supplier for a critical part, a key customer that is paying slowly or

Flagging variances from plan (positive and negative); providing recommendations for

remediation where appropriate

FIGURE 1: CFO SUPPORT WITH TRADITIONAL FINANCE PROCESSES

Identifying key areas of operational risk

Providing timely cost analysis and variance to business leaders

67%

67%

24%

25%

9%

8%

Providing support to the business in the format that the business finds most valuable

64%

57%

28%

37%

8%

6%

We are doing this now We will begin doing this within two years We have no plans to do this



a key geography where business is interrupted. The ability to raise these risks can help foster the growing collaboration between finance and operations.

Those respondents involved more closely with technology tend to

support operations performance management with more advanced analytics, big data and automation, including: providing customer and market analytics to inform decision-making, delivering real-time financials to enable course corrections between

reporting cycles and providing competitive market analysis to reveal performance of/insights from competitors (see Figure 2).

As to the question of exactly how the CFO should engage with operations, one respondent suggested, “Involve operations managers with metrics that directly affect their bottom line as well as involving them in the decision-making process.” In an increasingly data-centric world, irrelevant metrics are viewed as distracting and counterproductive. Another respondent recommended

that the CFO “become familiar with a dashboard-integrated approach that keeps operations results and performance summarized and easy to understand and react to.” This is because the most value to the enterprise is derived when information is provided to operations leaders in a way that is easy for them to access, understand and take action. Commenting on the imperative

to manage in a volatile market environment, a respondent concluded, “It is important to have an integrated system of financial reporting with manufacturing operations in order to analyze production in real time.” Agile systems and relevant data are critical when benchmarking and comparing performance with market norms.

Providing competitive market analysis to reveal performance of/insights from competitors (identifying “best in class”)

FIGURE 2: CFO SUPPORT WITH ANALYTICS

Providing customer and market analytics to inform decision-making

Delivering real-time financials to enable course corrections between reporting cycles

55%

50%

30%

37%

15%

13%

45% 38% 17%

We are doing this now

We will begin doing this within two years

We have no plans to do this



COMMUNICATION IS KEY

Survey respondents’ comments made clear that communication from finance, and the CFO in particular, is extremely important in supporting operations. Further, a majority of respondents clearly support the CFO’s respectful involvement, including identifying issues and recommending solutions. One suggested: “Having a strong understanding of the business and how the information finance provides is used by operations so that it can be tailored to [its] needs.” Another noted that: “It starts with doing the work and providing the relevant content that will make you a trusted and valuable advisor to

operations.” A third respondent cautioned: “Be humble and respect the fragile egos.” Engaging with operations leaders and their staffs depends on accommodating their own turf and terms. In other words, the partnership between finance and operations is best cultivated through active listening and understanding, maintaining relevance even if it requires customization and using a communication approach that is less directive and more supportive.

ACHIEVING INTEGRATION

Many finance professionals recognize the importance of communication and integration between finance and

operations; however, less than two-thirds of those surveyed have been able to achieve true integration of finance with operations management. Striving for integrated business planning — aligning strategic and financial planning with traditional sales and operations planning (S&OP) — is a top priority for the CFO-COO relationship to deliver one seamless management process. Additionally, only 63% of those surveyed say their CFOs are currently partnering with the COO or equivalent and creating a personal relationship with all business leaders. The same percentage are actively connecting finance team leaders with their operations equivalents (see Figure 3).

Providing a balanced performance assessment to business leaders

FIGURE 3: INTEGRATION WITH OPERATIONS

Effectively partnering with the COO/equivalent; creating a personal

relationship with all business leaders

Actively connecting finance team members with their operations equivalents

63%

63%

29%

25%

8%

12%

Engaging the Board on operational issues

58%

57%

34%

25%

8%

18%

We are doing this now We will begin doing this within two years We have no plans to do this



THE WRAP ON COMMUNICATION

What might this survey data mean for companies? New, structured interactions between the CFO and COO? Acknowledgment in both the CFO and COO job description that real connection is required? Whatever the case may be, it’s clear from the survey that the greatest enterprise

value can only be achieved if there is a relationship between these two key functions and disruptive technology like social, mobility, cloud and big data analytics is leveraged to transform business operations.

The CFOs/FP&A leaders responsibilities have increasingly expanded over the past couple years. Not only are they required to focus on financial results but also adapt to drive strategic leadership including performance improvement, organizational design and KPIs/business intelligence. It is critical to establish the link between Finance and Operations to enable visibility into the day-to-day business operations and ensure the conversion of identified performance improvement opportunities into realized financial results.”

– Josh Truppo, Senior Director FP&A, Five Below



TALENT



“TALENT IS WHAT DRIVES AN

ORGANIZATION’S EFFECTIVENESS; THEREFORE, IT’S IMPERATIVE FOR

THE CFO TO BE INVOLVED.”

Another way CFOs can add value to their organizations beyond their traditional roles/responsibilities is to be more involved in key aspects of corporate talent. While the talent strategy function is the clear domain of the CHRO, CFOs are getting involved in improving their companies’ ability to attract and retain talent and understanding the direct impact it has on corporate performance. To compete for the top performers in the marketplace, CFOs are spending more time to attract, retain and develop finance talent – by defining future competencies, delivering learning and development programs and establishing career progression models.

Increasingly, the processes of identifying and retaining talent are becoming an imperative part of the CFO’s job. While 71% of those surveyed confirm that their CFOs play a key role of talent support across the enterprise, 65% expect their organizations’ CFOs will have a substantially larger role supporting the development of talent strategy across the enterprise in the next two years.

As to the question of exactly how the CFO should engage with the talent world, a respondent argues that to facilitate productive interactions between finance and HR, the CFO should: “Build the relationship with the CHRO, determine what KPIs the talent function needs to understand and then align the finance team behind those needs to deliver regular reporting and support.”

Another respondent suggests that, viewed broadly, talent management requires full finance participation. In other words: “If you want great talent, you need to be involved in the process.” From a managing perspective, another respondent says the CFO should: “Take the time to teach and develop [within finance]. Be more visible and active in the process [across the enterprise].” The CFO can be a visible supporter of corporate initiatives to define talent strategy and develop talent, as both represent a significant investment for the firm and are connected to enterprise results. Lastly, through a performance risk lens, one respondent added: “Succession planning is an important part of growing the business.”



TALENT RISK MANAGEMENT

The importance of talent management to ensure accurate firm budgeting and forecasting cannot be overstated. The CFO must remain vigilant to avoid a talent-related performance shortfall. Only half of the senior finance executives surveyed say that their organizations’ CFOs currently identify key areas of talent risk, and 49% support efforts to improve bench strength of key corporate functions, including finance.

One respondent elaborated: “Bench strength is a key piece of succession planning and business redundancy. It is possible to get too lean.” Another counseled: “Have a good grasp of market imperatives and dynamics, current and future state/outlook so that FTE requirements are balanced

with operational demands.” Lastly, another respondent summarized: “Think about how to retain talent. Employee turnover and recruiting cost a lot more than retaining good people.”

ANALYTICS TALENT

With finance becoming increasingly data-dependent, making decisions that impact the entire organization will rely increasingly on insights garnered from a deeper understanding of analytics. The ability to synthesize raw data and generate insights to support decision-making will be imperative to the future health and growth of organizations. It is critical that the CFO delivers a timely, relevant and accurate fact base to make business decisions and utilizes advanced analytics to effectively manage performance and drive business value.

Forty percent of those surveyed believe that in the next two years the finance function will require key technology and analytics skills, such as machine learning, artificial intelligence and data visualization, that will need to be addressed in recruiting. Currently, only 36% of those surveyed say their CFOs ensure that their enterprises have this.

A respondent noted that: “Speaking with department heads on their [skills] needs is crucial.” As forward-looking CFOs turn to technology either to free up talent or to create capacity to transform their functions into analytics “centers of excellence,” deeper skillsets are required, both in finance and across the enterprise.

HR and finance both have an active role in attracting and retaining talent, so there is a lot of room for teaming between the CHRO and CFO. Our CFO and I both agree that compensation should be based on metrics that drive the business. HR creates compensation plans and must team with finance to set the metrics for these plans and assess performance against them. Teaming allows us to drive the business forward much easier than if we were working independently of each other.”

– Holly Paul, CHRO, FTI Consulting



GREATER ALIGNMENT BETWEEN FINANCE AND HUMAN RESOURCES

Many organizations believe there is a disconnect between the CFO and the CHRO, and only 39% of those surveyed believe their organization has an effective partnership between the two. The individuals within an

organization tend to shape the value of their functions, which translates into work effectiveness and the quality of cross-functional collaboration. One respondent recommends that HR leaders “meet with finance leaders

on a regular basis — talk more about talent and less about the numbers.” Fifty-one percent or less of those surveyed report that their CFOs are engaged with the CHRO in the following key ways:

Actively connecting finance team members with their HR/talent equivalents

Providing market analytics to inform overall workforce planning

Ensuring that the HR organization’s talent plan is aligned with KPIs established by business leaders and the company’s board

Providing talent cost analysis to inform benefits decisions and to inform hiring/outsourcing decisions

Quantifying the value of training initiatives and advanced-degree support programs

Rotating key finance managers through roles in relevant corporate functions

Actively supporting hiring and retention processes, such as developing long- and short-term incentive plans 51%

44%

41

41

40

37

32

%

%

%

%

%

In order to achieve greater finance and HR alignment, one respondent recommended that: “There needs to be a strong mentorship program in order to facilitate open

communication and talent movement [among] functional areas.” Positional rotation was highlighted as a strong tool: “There should be requisite time spent in certain positions so that the

finance team is well versed in the entire business.” That said, the choices of which roles are most appropriate for rotation should be viewed through a strategic, business lens.



TECHNOLOGY



“TECHNOLOGY HAS SUCH AN IMPORTANT ROLE AND ABILITY TO TAKE A COMPANY TO

THE NEXT LEVEL, AND THE CFO SHOULD BE A KEY STAKEHOLDER

IN THE DECISIONS MADE. MEASURING

ROI, ESPECIALLY HOW IT RELATES

TO DIGITAL/CLOUD OPERATIONS, IS

GOING TO BECOME INCREASINGLY

IMPORTANT AS COMPANIES REALIZE THE VALUE OF THEIR TECH INVESTMENTS.

THERE IS A LOT OF TECH OUT THERE, MORE THAN EVER

BEFORE, SO THE IMPORTANCE OF

THE CFO FUNCTION SHOULD BE TO

HELP UNDERSTAND WHICH TECHNOLOGY

WILL MAXIMIZE THE COMPANY’S VALUE.”

With technology strategy deeply embedded in enabling corporate strategy, the stakes are high when defining the role of technology in the enterprise and the risk undertaken when adopting a new technology. Historically, CFOs have played an integral role in corporate technology strategy, and 81% of those surveyed confirm that their organizations’ CFOs currently have a key role in supporting technology strategy development across the enterprise.

The line where finance ends and IT begins is increasingly blurred, and many senior managers are developing a more sophisticated technology knowledge base. Nearly three-quarters of those surveyed believe their organization’s CFO will have a substantially larger role supporting the development of technology strategy across the enterprise in the next two years.

Playing such a role will require a new skill set and knowledge base for the CFO. One survey respondent summarized it as: “Learn, learn, learn. Technology is not only for IT ‘geeks.’” CFOs are gaining a clearer understanding of specific technologies to allow them to engage with stakeholders as equal partners. CFOs can’t manage what they can’t understand, so it is imperative to: “Learn the language,” according to one respondent. Deeper knowledge informs not only decisions to invest in technology, but also decisions where a technology solution does not justify

the cost. Requests for technology enablement across the business should be presented to the CFO with business cases, not wish lists. Consequently, Finance needs to hold requestors accountable for achieving the intended results.

A large majority (86%) of respondents say they are currently deepening their understanding of technology or plan to do so within two years. Specifically, CFOs are trying to: “Understand and get more involved in the decisions for IT from the beginning and know what the business wants and needs for IT,” according to one respondent. “Understand how technology impacts your business and the overall industry,” recommends another. Indeed, digital transformation enabled by technology requires the CFO to ensure that the technology requirements and functionality are clearly defined and deployed as part of finance service delivery.



STRATEGIC EVALUATION, PLANNING AND IMPLEMENTATION

To avoid technology missteps, usage planning and implementation are critical. One finance leader wrote: “Consider the usefulness of technology. Employees are inundated with platforms that they have to use, with many of them providing little

incremental value to the company or its customers.”

Surprisingly, only 56% of those surveyed say that their organizations are currently identifying key areas of technology risk, and 43% say

that their organizations currently invest in IT spend transparency and measuring the ROI of technology projects. Less than half say that their finance leadership supports their organization’s technology management in several key areas:

Creating a single source for enterprise finance data, i.e., a “single version of the truth”

Ensuring that technology delivers clear, measured value to the enterprise

Serving as a leader in technology cost vs. functionality discussions

Supporting IT governance initiatives, reviewing business cases for proposed IT projects 48%

43%

47

44

%

%

We need to take advantage and ownership of technology and its benefit to our function and broader organization. CFO’s are positioned to lead the way to greater digitization and automation through data visualization, RPA, advanced analytics and other IT/ERP advances, allowing us to not only drive cost efficiencies, but more importantly, build scalability and flexibility into our processes and corporate growth.

– Jim Rao, CFO, Excelitas Technologies



ENGAGEMENT WITH IT

A strong partnership with IT helps the CFO understand technology’s downstream effects on an industry, company or function. It is crucial to driving improved business performance, with the foundation built on developing enterprise Master Data Management capabilities that ensure a single version of the truth through common data sources, definitions and calculations. Engagement between finance and IT, centered on technology investment decisions, reporting and analytic needs and implementation risk, has little margin for error. This drives the need for ROI tracking, stage gate funding and granular implementation planning whenever new technology is considered.

As to the question of exactly how the CFO should engage with IT, one respondent suggested: “Engage more proactively with the CIO” and “Be a partner to the CTO/CIO.” Only 49% of those surveyed believe there is an effective partnership with finance and the CIO/CTO. Another respondent explained that: “Partnering effectively with an organization’s CTO/CIO is very important for a CFO. Some studies report that 25–30% of CTO/CIOs report into the CFO.” Immeasurable value is gained and opportunities can be realized when the CFO and CIO are on the same page. The CFO should help the CIO connect strategic decisions to business results: “Help the IT team with ROI. Be accountable for results.”

Another respondent wrote: “Develop the finance road map first as a starting point for the broader technology management discussion with the CTO and other senior leaders in the organization.” For example, it’s imperative that the CFO understands how an ERP or CRM implementation will integrate with the fabric of the organization. While the CFO is increasingly a senior leader who shapes the discussion with other leaders on technology strategy, only half or less than half of those surveyed say their finance leadership is involved in key areas of technology management (see Figure 4).

Sponsoring initiatives to increase business-user adoption of enterprise applications

FIGURE 4: CFO ENGAGEMENT IN KEY AREAS OF TECHNOLOGY MANAGEMENT

Actively connecting finance team members with their IT equivalents

Getting all stakeholders aligned on important technology scoping and purchase decisions

50%

49%

30%

37%

20%

14%

46% 42% 12%

We are doing this now

We will begin doing this within two years

We have no plans to do this



ANALYTICS…

Investing in technology is becoming a focus for CFOs because of the competitive advantage that social, mobility, cloud solutions and big data/advanced analytics can provide across the enterprise. Leveraging technology can make workers more productive, provide more advanced analysis of the financial and operational results and even drive the development of new, profitable businesses. As it relates to data and analytics:

89% of those surveyed either have or are developing a strong analytics team within the finance function.

48% of those surveyed are currently collaborating with IT to leverage cloud, advanced analytics and automation solutions to increase finance’s ability to provide insight to the business, while

33% plan to do this within the next two years.

Commenting on the role of analytics, as overseen by the CFO, one respondent opined: “Information is king. If you can’t be confident in your financials, you open yourself up to greater risk. Investments are needed.” Analytics are only useful if the underlying data is correct.

Another respondent added advice for technology acquisition: “Consider the usefulness of technology rather than purchasing because it’s the next best thing.” Differentiating between nice-to-have and need-to-have is a core competency of the CFO. Lastly, a respondent reminded his peers that the CFO must remember that end users’ needs take precedence: “Consult with the people using the technology on a day-to-day basis and find out what their needs are and solutions that fit that.”

…AND AUTOMATION

CFOs are increasingly turning to robotic process automation (RPA) to perform transactional tasks in an effort to increase productivity, build scalability, improve quality and accuracy, maintain operations 24/7 and redeploy humans to

more value-add responsibilities or analytical tasks. The most common finance tasks utilizing RPA are A/P invoice processing, A/R collections and intercompany transactions. But finance isn’t the only function that CFOs are exploring for RPA. Other RPA use cases include Human Resources (new employee onboarding, payroll processing), IT (server monitoring, user setup and configuration), Supply Chain (inventory management, shipment tracking), Sales (CRM updates, sales quote management) and Customer Service (scheduled customer communications, automated transactions).

Using RPA, CFOs can serve as enterprise-wide catalysts. They have the ability to drive relationships with functional leader counterparts by helping to quantify the benefits of RPA, demonstrate potential cost savings or efficiency gains and even serve as the first RPA adopter in their organizations. In fact, in a growing number of organizations, automation is permanently displacing clerical activities and enabling more analytic bandwidth by reducing time spent on transaction processing and repetitive activities.

We all know CFOs need to deliver more with less. Fortunately, there are ways to navigate this via technology and automation solutions. That is why a deep understanding of technology is so important — so together with CIOs, we can deliver services and execute the company’s strategy at the lowest possible cost.

– Rick Surett, CFO, Ports America



CFOs are responsible for more than just EPS and quarterly

numbers.



COST OF FINANCE REMAINS ABOVE INDUSTRY BENCHMARK

Opportunities for cost reduction and process improvement (the ability to do more with less cost) still exist in the finance functions led by the survey respondents. With RPA, machine learning, shared services and other advances, they are responsible for maintaining the same level of cost discipline that they demand from the rest of the organization. Implementing these tools or strategies is an opportune time to improve processes while reducing costs.

Leading CFOs have driven down the cost of finance well below 1% of total revenue and are focused on reducing broader G&A costs by working closely with their functional peers across HR, IT, Procurement and more. One finance leader stated the obvious: “CFOs are responsible for more than just EPS and quarterly numbers.” Their finance and enterprise-wide mandates continue to grow.

of those surveyed have finance organizations with

costs exceeding 2% of total company revenue.

have costs over 3% of total revenue.

39% 17%

A benchmark of 1% of total revenue for the cost of finance is the assumed industry norm.1 However, the CFO survey found that most of those surveyed run finance organizations well above that.

1 APQC (AMERICAN PRODUCTIVITY & QUALITY CENTER), A MEMBER-BASED NONPROFIT FOCUSED ON BUSINESS BENCHMARKING AND BEST

PRACTICES, IDENTIFIES 1.2% OF REVENUES AS MEDIAN PERFORMANCE FOR FIRMS IT BENCHMARKED.



CFOs have the opportunity to

impact all areas of the business.



MORE COLLABORATION AND TRANSPARENCY TO GROW THE COMPANY

Nearly three-quarters of those surveyed expect their CFOs will play an

even larger role in all three key areas in their companies — operations,

talent and technology — over the next two years. Most also expect

this type of enhanced engagement across the enterprise will become

standard practice and an integral part of the evolving CFO job description.

“Be involved in more team-building exercises across functional lines,”

says one. Success depends on “fostering more interaction and

cooperation between departments.”

CONCLUSION

Gina Gutzeit Senior Managing DirectorOCFO Leader +1 212 499 [email protected]

Alan Numsuwan Managing DirectorOCFO +1 646 576 [email protected]

The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.

www.fticonsulting.com ©2019 FTI Consulting, Inc. All rights reserved.

ABOUT FTI CONSULTINGFTI Consulting is an independent global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. Individually, each practice is a leader in its specific field, staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers

a comprehensive suite of services designed to assist clients across the business cycle – from proactive risk management to the ability to respond rapidly to unexpected events and dynamic environments. The Office of the CFO Solutions team at FTI Consulting serves as the firm’s Finance Center of Excellence and delivers on-demand expertise and execution across the finance organization.

ABOUT CFO RESEARCHCFO Research, an Argyle company, has been a trusted source of insight into the business issues that matter most to finance professionals since its founding in 2000. CFO Research is the sister firm of CFO Magazine, and relies on senior finance executives

to share their experiences, insights, and observations on critical business issues. This cutting-edge research supports critical business decisions by our sponsors, as well as their thought leadership positioning and marketing efforts.

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