Finance leaders are looking to the future to assess the long-term obstacles facing their companies this year, according to a new survey report. But they say organisational leadership challenges could hold back digital transformation.
With long-term strategy top of mind, they are concerned that organisational challenges could derail innovation efforts, particularly in digitisation and artificial intelligence (AI), according to McKinsey’s global report Toward the Long Term: CFO Perspectives on the Future of Finance.
Digital transformation is seen as a key value driver, CFOs said. Eighty-five per cent of CFO respondents believe that AI and generative AI will generate insights that enable employees to spend more time on value-adding tasks.
They also believe that generative AI applications could improve productivity (83%); identify strategy and leadership support, such as insight generation and competitor insights monitoring (58%); and decrease risks through improved controls (26%).
As a result, 98% of finance leaders continue to invest in digitisation and automation, irrespective of progress on their innovation journeys, the report said. However, 41% say only “one-quarter or less” of their processes are currently digitised or automated.
The report surveyed 126 CFOs across 32 countries in March and April.
Organisational challenges could stall progress in transformation efforts, presenting roadblocks to creating value from data and technology, the report noted.
CFOs report that their finance teams already face demanding workloads (70%), a lack of relevant capabilities (67%), and insufficient resources to invest in digital finance tools (62%), the report said. All three of those challenges pose bigger barriers to innovation than tech infrastructure or data-related issues.
In response, “most finance leaders cite strategic planning and long-term resource allocation and planning as top finance priorities”, the report said. The percentage of CFOs citing strategic planning as a top priority has grown considerably since 2023: 60% now say so, versus 38% last year.
Supply chain disruptions and weak demand are also expected to pull focus this year. Forty-nine per cent of CFOs, compared with 20% last year, are concerned about supply chain disruptions’ impact on their companies’ growth, the report said.
Similar to last year, most respondents also cite “increased economic volatility” as a risk, the report said. However, an increase in business confidence as inflation fears lessen means CFOs are twice as likely to expect their companies’ investment levels will hold steady.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
