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Progressive CFOs: Inspired By What's Required

Today’s globally distributed and often tightly regulated multi-nationals are facing more challenges and complexities in controlling and reporting on the financial performance of often very diverse business portfolios. As the requirements and complexities increase so do the risks. The SEC’s recent $80 million fine of Monsanto is a reminder of the risks and responsibilities associated with financial reporting.

CFOs are under pressure from boards, local authorities and auditing partners to improve the timeliness, accuracy, transparency and efficiency of consolidating reliable results across multiple borders and operational boundaries. This even as currency fluctuations, and other economic conditions, create more difficulty in reporting and unpredictability in forecasting future performance.

Managing complexity and uncertainty has become imperative in the face of mounting regulatory requirements, changing accounting standards, accelerating mergers & acquisitions, and greater economic instability. CFOs must have the controls and processes in place to account for increasing requirements and complexity without negatively impacting the timeliness of, and confidence in, the numbers.

The scale and pace of new regulations impacting numerous industries over the past decade are unprecedented and will only get worse. Some 80 percent of accountants and financial executives say today’s global regulatory environment has significantly increased the cost and complexity of doing business and will make their jobs even more challenging over the coming years.

Meanwhile, global businesses are aggressively diversifying and expanding though new mergers and acquisitions. In 2015, businesses around the world set a new record by closing over $5 trillion in M&A deals, surpassing the previous mark set in 2007 by 9 percent². Finance organizations must be ready and able to integrate the financial information and processes of disparate businesses and meet new local and global financial and regulatory reporting requirements for the merged enterprises and diverse demands of its stakeholders.

All this is occurring at a time of rapid competitive change and economic uncertainty, requiring high levels of vigilance, speed and what-if modeling in financial planning and budgeting. Given these challenges, today’s enterprises must find ways to optimize, automate and streamline financial processes, beginning with financial consolidation and close all the way through board reporting, earnings presentations and regulatory reporting. CFOs now need to provide vetted, trusted and auditable traditional financial reporting as well as digital formats for regulators, document format for management reports and annual reports, presentations for earnings calls, and mobile access for senior executives and stakeholders. And most importantly the finance organization has to have full confidence that all the different outputs are consistent, accurate, traceable, and auditable from the initial source of the data to the final output and every step along the way.

Yet, CFO and board confidence in the accuracy and compliance of financial reporting has declined dramatically. A recent E&Y survey of 1,000 CFOs around the world found that only 55 percent were fully or somewhat confident in compliance versus 84 percent in 2014. In addition, just 48 percent felt their financial reports had the confidence of their boards versus 71 percent in 2014.

“Progressive CFOs: Inspired by What's Required” is the focus of a new thought leadership initiative undertaken by the Business Performance Innovation Network in cooperation with Tagetik, a global leader in corporate and financial performance management. The initiative explores the challenges, obstacles and complexities facing diversified, multi-national enterprises as they seek to gain better control, transparency, insight and efficiency from their global financial processes and systems. It looks at key factors and best practices in optimizing the period-end financial close, across data collection, general ledger close, consolidation and internal and external reporting, and the importance of state-of-the art financial management systems in reducing error and risk, improving productivity and accelerating the close (even with increased complexity), and delivering more insight and foresight at the same or lower cost. This is what CFOs must do to meet increasing demands and deliver greater business value from the finance organization.

Reports

Progressive CFOs: Inspired by What's Required
This study examines the growing challenges and requirements of finance executives as they seek to meet demands for improved accuracy and timeliness in delivering much-needed and greatly expanded information to external and internal audiences.
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Media Coverage

August 16, 2016 - Finance Must Evolve to Meet the Challenges of a “Perfect Storm”
Dave Murray, FEI
Finance organizations within global corporations face mounting pressures and increasing complexity in meeting external and internal reporting, budgeting and planning requirements. Heightened scrutiny and financial regulations, more diversified business portfolios and complicated corporate structures, increased competition and market change, and greater economic uncertainty—these and other forces are creating a “perfect storm” for finance. Read more »

July 13, 2016 - CFOs Find New Opportunities in Regulatory Complexities
Isaac M. O'Bannon, CPA Practice Advisor
Savvy finance executives are seeing increased regulatory and financial reporting requirements as transformation opportunities, according to a new study released today by the Business Performance Innovation (BPI) Network and sponsored by Tagetik, a visionary leader in global performance management software solutions. Read more »

Facts & Stats

In the webinar, a poll was taken regarding the current method most enterprises are utilizing for their planning and forecasting. Nearly 49 % said they relied exclusively on Excel, while 38% were using a combination of Excel and an additional software application. As a result, many of these businesses are failing to conquer budgeting tasks with the efficiency and accuracy that's achieved through alternate budgeting approaches. (Source)

In a study provided by Rewood and The Hackett Group, 45% of businesses in the Top Performer group highlight frustration within the Finance & Accounting team as a key issue in the closing process. (Source)

33% report that finance staff capacity is the biggest bottleneck in the process in the closing process. (Source)

A study done by Redwood and The Hackett Group found that 55% of the Top Performing companies – which have already adopted a broad range of best practices to optimize the close – struggle with work-load levelling over the month during the financial period-end close, with 45% admitting that this leads to staff working overtime. (Source)

In a survey from APQC, gathering responses from 145 senior finance executives from the U.S., Europe and Asia, 75% of organizations reported that close-to-disclose process is one of the top two targets for financial improvement over the next 18 months. (Source)

An ideal close would take around 10 days — anything beyond 20 days is competitively worrisome. Companies that complete the process in fewer than 10 days will spend 50 percent less than their slower-to-close competitors, Driscoll asserts, citing APQC data. (Source)

Articles

July 14, 2015 - Why Finance and Accounting Must Transform
Accounting Web
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May 31, 2015 - BEPS Country-by-Country Reporting: The Practical Impact for Corporate Tax Departments
The Tax Adviser
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May 1, 2015 - OECD head challenges 'extremely aggressive' tax planning by multinational technology companies
Out-Law
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January 27, 2014 - Fixing the Financial Close Process
CFO
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White Papers

The CFO as Architect of Business Value
The finance function has played a vital role in helping companies to overcome the challenges of the past few years, and the CFO is now the CEO's go-to partner for driving operational transformation and strategic execution. CFOs have helped companies to impose the discipline over costs, cash and capital that has been necessary for survival, and advised business leaders on how to allocate scarce resources against a highly challenging backdrop. Thus the CFO can be the architect of business value, providing the means, the tools and the acumen to design for and deliver valuable business outcomes. This study comprised surveys of more than 600 senior finance executives, as well as interviews with more than 30 CFOs and other senior finance professionals. Read more »

The CFO as corporate strategist
Until recently, finance chiefs played only a narrow role in strategic decision making and virtually no role in business transformation. But most remained almost entirely focused on their own function. No longer. The Great Recession thrust CFOs into the corporate spotlight. If companies were to survive, they would require cost management skills of the highest order. And by pursuing a disciplined drive for operational efficiency, many CFOs excelled. Indeed, the success of their financial stewardship has left company coffers flush with cash—and the robust profits that have driven stock markets to new highs. Read more »

Breaking Away: How Leading Finance Functions are Redefining Excellence
The global business landscape is changing rapidly. The leading finance teams help their organizations stay ahead by providing the insight and direction needed, at almost half the cost. Are you keeping up or falling behind? This report draws on more than 400 PwC benchmark engagements across a broad range of industry sectors. These benchmarking engagements provide their clients with a detailed and comparative ‘health check’ for their finance teams. Read more »

Getting It Right with Growth: How to be a Great CFO in the New Growth Economy
Times have changed. The role of CFO has evolved to that of a strategic partner to the broader executive team, providing real insight to the company’s growth plans. As companies focus on growth, Chief Financial Officers are now assuming a more strategic role and are expected to deliver real insight to the C-suite. Reporting and closing the books are no longer enough. CFOs must drive operational gains and steer their companies’ growth strategies. Read more »

The CFO Perspective: Transforming the Finance Organization
Finance organizations are at an inflection point. Increasingly, CFOs must add value by helping their companies set and achieve strategic business goals. As business volatility and complexity rise, CFOs must be able to simulate, plan, and budget for potential outcomes and collaborate with many different stakeholders. This requires additional skills and technology. To justify such investments, CFOs must deliver rapid and ongoing finance transformation and business value while continuing to ensure business stewardship. Read more »

Transforming Financial Institutions Through Data Governance
This paper will evaluate how financial institutions are addressing the challenges and opportunities of data governance. It will demonstrate which investments and competencies organizations are prioritizing as they build their own data governance programs, while analyzing how organizations perceive their own data security and quality. Finally, this paper will look at how financial institutions are improving their organizational alignment to facilitate better data governance, and how they are tracking the success of those programs. Read more »

Finance Automation: Financial Close and Accounting Automation for the Office of Finance
This report examines the key capabilities your business needs to deliver faster, more accurate financial close and accounting processes that deliver on time every time. It brings together the experiences of more than 200 global organizations over the past ten years The finance, business application and IT departments involved in these processes are successfully using Finance Automation to achieve real results. This includes: • Improving financial reporting timing by 70% whilst reducing manual efforts by 90% • Introducing 100% control over their financial close and accounting processes • Increasing the number of books closed per month from 10 to hundreds with 80% fewer resources. Read more »

Transforming Finance and Accounting to Optimize Financial Close
This white paper applies our experience in supporting such initiatives, and outlines four guiding principles for institutions to follow as they embark on F&A platform transformation. Cognizant recommends a set of success factors for measuring progress and aligning transformation activities to achieve the end goal. They also showcase the core principles highlighted in this paper within the context of a recent F&A platform transformation at one of their largest clients, a North American regional bank. Read more »

Transforming Finance
The enviroment in which CFOs operate is constantly changing and increasingly disruptive: market fluctuations and credit turbulence create game-changing opportunities and challenges; new technologies such as cloud computing radically change operating models; and increased shareholder scrutiny and public demands for transparency put new pressures on the finance functions. This publication represents some of the insights some of their professionals have found to be consistent across geographies and industries. Read more »

Survey Analysis: Critical CFO Technology Needs: 2015 Gartner FEI Study
The 2015 Gartner Financial Executives International CFO Technology Study provides significant insight into CFOs' thinking about technology. Understanding how your IT organization compares with these important benchmarks provides an opportunity to improve your strategic IT plans. Major key findings are: ■ Organizations are still struggling with analytics. ■ Cloud usage is increasing for many finance-focused applications. ■ CFOs have an increased appetite for business applications and business analytics investments, but security is still a major concern. Read more »

Sponsor

Tagetik
Tagetik understands the complex challenges that face the Office of Finance and translates that knowledge into intuitive, enterprise-scale performance management software solutions that drive business results. With Tagetik, companies get the simplicity of the Cloud and the power to unify financial and operational planning; shorten the consolidation and close process; immediately analyze results, model and compare full financial statement impact of business scenarios; adjust strategic plans; seamlessly update rolling forecasts; produce formatted and auditable financial statements and management reports; collaborate on business reviews, and automate disclosure and board reporting. Tagetik has built-in financial intelligence so that CFOs, finance managers, and operations executives can orchestrate multiple or all processes in one software solution. More than 750 customers across 35 countries count on Tagetik to improve efficiency, reduce risk, save money and deliver results.
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