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Friday, April 18, 2014

The future of corporate finance

Corporate financial executives are facing greater challenges than in the past. As commercial technology and competitive pressures mount, CFOs are faced with challenging decisions and limited resources that their companies' future hinge upon. According to the following CFO Research report, executives must be able to assess both cost and value of investments for the benefit of their businesses via a number of mechanisms.

The CFO Research and SAP sponsored report evaluates 331 senior finance executives of companies with over $500 million in revenue. Whether or not that is annual or quarterly revenue is not clear. According to those surveyed, 32 percent said cost control and profitability were a priority, followed by 23 percent seeing growth objectives as most important. In addition, long-term strategic planning was of substantial importance to the majority of executives who took the survey.

Shaping the-finance-function-of-tomorrow from SAPMENA

Important industry trends that have not been fully taken advantage of by some companies are also discussed in report. For example, mobile technology is considered indispensable for both internal and external operations according to respondents. Moreover, 86 percent of those surveyed said data analytics, market simulations and forecasting are also stated to be areas where improvement is a good idea. Key areas measured and disseminated in the report are summarized below:

Corporate growth

In terms of corporate growth, executives from Latin American companies showed the most optimism with 54 percent expecting a good deal of domestic growth. Asia and Australia follows behind with 29 percent forecasting high domestic growth. European respondents saw the highest potential for international growth closely followed by 37 percent of Latin American financial executives. The majority of executives expressed interest in reducing time spent on transactional activities and raising time spent on analytical functions.

Data analysis

In an effort to recognize ways for improving data analysis functions, the reports indicates that 82 percent see finance teams as a means to that end. Moreover, 79 percent of those surveyed think that real time profitability analysis can be improved by enhanced data analysis capability. The vast majority or 80 percent also think that better data analysis helps support business planning. Other ways data analytics help are for performance evaluation and making use of unstructured data for productivity and growth purposes.

Mobile technology

In addition to a premium placed on data analytics, cloud computing and mobile technology were also areas that needed improvement for over a third of respondents in terms of cloud computing and 32 percent for mobile technology. Moreover, by merging finance with technological operations, the benefit of an increased real comprehension of business performance and higher quality insights in to business activity. Mobile technology is believed to contribute to these ends by 87 percent of executives in the survey.

Cloud computing

Cloud computing is believed to be the way to lower cost operations according to 86 percent of those in the survey. Another benefit of cloud computing is to make use of information technology assets for other functions such as data analysis. Moreover, by freeing up computing resources, that hardware can be optimized to help executives gain a firmer grip on the business environment and how to capitalize on market events, trends and realities. Cloud computing also has the capacity to improve the efficiency of internal operations and product innovations.