As CFOs strive to become the visionary leaders their organizations expect, building a strategic financial planning and analysis (FP&A) team skilled in analyzing data and uncovering key insights has become critical. This strategic FP&A function—with CFOs leading the way—will be needed to help organizations manage growth, ensure sustainability, and enable agile business models in an increasingly dynamic business environment.
According to a recent survey of more than 300 CFOs across the globe, 75% of CFOs want their teams to have a strategic and strong impact on their organizations. Yet only 46% believe they will have that kind of impact by 2017. These CFOs also estimate that 11-25% of their teams’ time is spent on strategic tasks today, and expect that number to grow to 25-50% by 2020.
For more than 20 years, it’s been a familiar mantra: FP&A teams need more time and resources in order to focus on strategy. Yet, despite the advanced and on-going warning, things don’t appear to be changing. So, how do these same CFOs intend to bridge the gap between the tactical teams of today and strategic teams of the future? Through a combination of technology and on-the-job training. Plus good timing: Never before have such powerful tools been available to support the finance function.
Bridging the gap with technology
CFOs report that their teams are working an average of 50 hours to keep up with the demands of the Office of Finance, and give them high marks when it comes to management reporting and data gathering for budgets. However, nearly half of CFOs would like to see their teams improve in the areas of analytics skills and their ability to collaborate across the business. When asked about just one skill they wanted to see improved, CFOs cited dashboard design (29%), predictive analytics (25%), and strategic modeling of what-if scenarios (19%).
Yet, to enable these strategic skills, they don’t intend to free up time by hiring additional staff. In fact, despite many reporting that their businesses are increasing or holding steady, three of four CFOs do not plan to expand their FP&A teams in the next 12 months. Of those not increasing staffing, 55% say that their teams are adequately staffed.
How will they close the resource gap? Nearly half of those who report needing additional resources intend to implement new technology (46%).
Getting to know you, getting to know all about…the business
CFOs also report they are looking for a deeper understanding of the business, and they don’t expect that understanding to come from outside of the finance role. Only about one in 10 CFOs believe it is very or completely important that a prospective candidate has worked in a function outside of accounting and finance; in fact, 24% report that it is not important at all.
To infuse their teams with broader business knowledge, 56% report that their organization is actively implementing programs to educate senior FP&A team members on all aspects of the business. Ironically, 78% of them report that their methods include collaboration and integration with other parts of the organization.
Yet, while CFOs want their FP&A teams to engage more deeply with the business for greater understanding, that doesn’t translate to end-customer interaction. Nearly 75% report that their teams don’t meet with customers at all. CFOs also rarely meet with customers, with 42% reporting they meet with customers a few times per year, and 10% saying they don’t meet with customers at all.
With few CFOs planning to hire new talent, the strategic FP&A team of the future will be formed through training, technology and cross-functional collaboration, presenting a tremendous opportunity for FP&A professionals. Despite CFOs reporting that they don’t highly rate experience outside of finance, it is clear that the strategic FP&A team will be one that doesn’t only have traditional finance experience. These professionals will be technology savvy, skilled at cross-functional collaboration, and adept at understanding their business so as to surface insights from the vast amounts of data available to them.
Download the CFO Indicator Q2 2016 report for more insights, survey results, and charts based on input from the 307 global CFOs in our latest research.
This article originally appeared in FEI Daily.