New survey reveals need for CFOs to become more connected across the business
According to a survey of nearly 1,000* senior finance professionals, non-financial data may be the game-changer for forecasting success. This finding was revealed as CFOs admitted that non-financial data capture ranked only fifth in their top five priorities, despite the proven benefits when planning, budgeting and forecasting.
The Future of Planning, Budgeting and Forecasting Survey, carried out by the FSN with members of its Modern Finance Forum was commissioned by Advanced, the UK’s third largest software and services provider, to understand how financial decision makers can get ahead with better data-driven decision making.
The findings revealed that CFOs who make better use of non-financial data are:
- more than 1.7 times more likely to forecast earnings within plus or minus 5%
- two times more likely to be able to forecast beyond the 12 month time horizon
- two and a half times more likely to be able to respond to market change
“The survey shows the latent potential of non-financial data to transform the accuracy of business forecasts. It’s no exaggeration to say that it is a game-changer yet CFOs rank it a lowly fifth in their priorities for the forecasting process,” says Gary Simon, FSN’s chief executive officer and the leader of the Modern Finance Forum on LinkedIn.
“The current business climate is characterised by huge business uncertainty yet the effective use of non-financial data allows businesses to extend their planning horizon, improve forecasting accuracy and improve decision-making.”
“It’s clear that many CFOs are missing a trick when it comes to recognising the value that a connected business can offer. Connected CFOs will ensure every board member - but especially the CEO - has an integrated and real-time view of the projected financial performance of the business. However it is vital that this financial insight is inextricably linked to the operational performance of the business, informed by areas such as people skills and the development and impact of digital transformations for example. This is the silver bullet to give every organisation the best chance to drive efficiencies, productivity and growth across every aspect of the organisation, comments Andrew Hicks, CFO at Advanced.
A full infographic reveals further results from the research, such as the top four priorities for CFOs being:
- Greater simulation and scenario planning
- Engagement with more non-financial stakeholders in the PBF process
- Shift to rolling forecasts
- More sophisticated analytical techniques
*There were 955 people of the Modern Finance Forum who responded to the survey were senior finance professionals covering 23 countries and 13 industry sectors. Approximately half of the respondents were from organisations with more than 1,000 employees.