Harnessing data for strategic planning, streamlining processes and bracing for heightened regulatory concerns are the top priorities for CFOs and the finance function, according to a new survey report.
Finance executives were asked to rate how different issues and capabilities ranked among their priorities in business consulting firm Protiviti’s 2014 Finance Priorities Survey.
Although the majority (94%) of the 220 respondents work for companies based in North America, some finance representatives for companies in Europe, Asia, and elsewhere were represented in the survey. Three-fourths of the respondents were CPAs or chartered accountants.
Improving strategic planning capabilities ranked as the highest priority in the survey. Data-driven processes related to strategic planning—such as cash forecasting, periodic forecasting and budgeting—also were rated as high priorities.
“Without question, more and more companies are looking to harness business intelligence and Big Data for strategic planning,” Jay Thompson, a Protiviti managing director, said in a news release. “They also want to analyse their data to gain an in-depth understanding of their customers, products and other business areas in order to identify the best opportunities for profitability.”
To succeed in strategic planning initiatives, staff members must have the discipline to follow through with them, said Jim Lindell, CPA, CGMA, president of Wisconsin-based Thorsten Consulting Group and author of Strategic Planning: A Simplified and Workable Approach for Private Companies.
Here are some of Lindell’s tips for successfully following through with a strategic plan:
- Upper management has to buy in. “The CEO or COO is really charged with strategic vision,” Lindell said. “They should be the ones that drive that process.”
- Maintain an appropriate scale. “A plan can be anything from the back of the envelope to the traditional 40- or 50-page strategic plan,” Lindell said. “And depending on the skillsets of the people, the back of the envelope might be perfectly fine.”
- Follow up on at least a quarterly basis. “The danger with a strategic plan is that you do it, and then people laugh about putting it on their shelves,” Lindell said. “And no one goes back and looks at it.”
- Hold staff accountable. “The seriousness is going to be, if we don’t make it, they’re not going to make their bonuses,” Lindell said. “It’s the CEO running the process, so we are checking up on it, all the time, and people understand it.”
According to the Protiviti report, streamlining processes for efficiency and effectiveness also is an area of considerable focus for finance executives. The report showed that finance executives have a strong desire to:
- Perform transactional activities such as the period-end close and associated processes as efficiently as possible.
- Improve their cash forecasting and working capital management capabilities, as well as their banking relationships.
- Update their capabilities for complying with evolving business tax policies, business regulations and accounting standards in a period of rapid change. The new US health-care laws contained in the Patient Protection and Affordable Care Act are a particular focus.
“Organisations are facing tremendous change and new cost pressures, and they struggle to know whether or not they are prepared to adjust and manage sufficiently the impact of various upcoming changes,” Jim Pajakowski, Protiviti’s executive vice president of global services, said in a news release. “The Affordable Care Act is front and centre for a lot of companies, given the many questions that remain open related to the act, from compliance to short- and long-term costs.”
—Ken Tysiac (email@example.com) is a CGMA Magazine senior editor.