The role of in-house finance teams is under the microscope again as CFOs look to expand their level of influence and encourage innovation and growth. Although the CFO’s role has developed within the UK in recent years, most believe their focus over the next 2 years must revolve around day-to-day operations and greater engagement with external stakeholders, if businesses are to develop.
‘From Keeping Score to Adding Value’, published by KPMG today, also reveals that the gap between the information companies have access to, and the data they actually need to make business decisions, lies behind the move to transform the finance function.
“Having focused unrelentingly on efficiency drives and cost cutting initiatives since the start of the current economic crisis, many finance executives are now looking to help their organisations grow again,” says Patrick Fenton, partner and UK head of financial management consulting at KPMG. “Their willingness to continually evolve not only adds value to their business; it also fills the missing link in many organisations by improving relationships with other corporate support functions.”
However, respondents indicate that a number of challenges stand in the way of creating a more forward-looking and integrated finance department. More than half argue that the relationship between finance and other groups within their company poses a significant risk to the function’s effectiveness. CFOs do, at least, recognise that they need to address the issue, with one respondent commenting that the toughest chore finance faces is in communication.
Almost all of the participants in KPMG’s report cite some form of people challenges as blockages to their success. Many finance leaders admit they are struggling to assemble and retain finance staff with the right mix of capabilities and talents to reflect the new demands being placed on the finance function.
Respondents to KPMG’s survey also expressed continuing frustration with the limitations of technology. In many cases, out of date applications and legacy IT systems were cited as barriers to improving the finance function’s effectiveness. Given the fundamental emphasis on delivering accurate, consistent and timely financial data, many executives said that they would look to play a more pivotal role in bridging the gap between IT and finance.
Patrick Fenton continues: “It’s up to CFOs and their teams to convince other, sceptical, business areas that a function best known for evaluating past financial performance really can help them become more proactive, predictive and ultimately more successful.
If finance teams can do this successfully, CFOs will be well on the way to demonstrating that they are about more than identifying reasons for past performance.”
Mike Petrook, KPMG Press Office
020 7311 5271 (t), 07917 384 576 (m) or email@example.com
Notes to Editors:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.