Midmarket CFOs Lack Business Intelligence Tools to Do Their Jobs
As a direct result of the economic crisis of the last 18 months, chief financial officers at midmarket organizations have greater clout and decision-making power than ever before, and yet a dispiriting majority of them say they lack insight and access to the data they need to be effective.
That’s the key finding of a recent study by IBM of 1,900 CFOs worldwide. The good news for the channel is that these CFOs, now filling strategic roles, need technology to meet their growing responsibilities. The CFOs cited three main priorities in the year ahead: reducing the enterprise cost base, making faster, more accurate decisions and providing more transparency to external stakeholders.
Achieving these goals necessitates the use of technology. Business intelligence and analytics solutions, financial applications and other sophisticated software tools will be critical to helping CFOs get their job done, while affording solution providers tremendous opportunity to serve this market.
The need is stark, based on the study’s findings. Consider the following:
• More than half of the midmarket CFOs said they will need to make "major changes" to how they work in order to address external pressures, including the economy, industry needs and regulatory compliance.
• Close to 60 percent of those surveyed said they are dissatisfied with their operational planning, forecasting and analytical capabilities.
• More than 40 percent of those surveyed still produce their financial metrics manually, with more than half spending their time focusing on transactional activities.
• Half do not possess a common planning platform, which leads to integration issues and inefficiency. Likewise, more than a third do not have a common reporting platform either.
• Nearly half acknowledged that they are poor to average at anticipating external forces, revealing a steep need for business intelligence and analytics solutions that can help them become more predictive.
The disconnect between the increasingly strategic nature of the CFO role in midmarket organizations and the lack of deployed solutions to help them do their job will need to be addressed this year, according to one IBM executive.
"The added responsibility makes it all the more important for these CFOs to be able to provide insights into their companies’ financial data and suggest strategies that will help advance their companies’ agendas," says Marc Dupaquier, General Manager – Midmarket at IBM, in a statement.
CFOs responding to the survey described the new framework in which they are operating. They are now included in top-level discussions with other executive managers and need to provide answers around demand and price pressures, business model shifts, resource allocation and information strategies, according to the study. More than three-quarters report playing a decision-making role in the broad corporate agenda, where they previously did not.
Hindering their execution is integration of information and their ability to manage and mitigate corporate risk – both areas ripe for technology solutions.
In a study IBM conducted last year, CIOs at midmarket organizations echoed the concerns of their CFO colleagues. A full 86% of them cited business intelligence and analytics as the top technology to drive competitiveness over the next five years.