The 2019 priorities of financial managers has been revealed by PwC France, in partnership with the DFCG. The survey confirms that performance management is one of the key priorities, followed by support for growth strategy, cash management and process optimisation. In the context of technological advances marked by new growth models, the main challenges faced by many CFOs are well-known, namely the evolution of their skills, talent management and the growing risk of cyber attacks.
Performance management stays the number one priority of finance departments. Producing quality information, in real time, that is focused and relevant, helps them anticipate the company’s evolution and make informed decisions. Exploiting the company’s internal (operations, CRM, HR…) and external data allows for enhanced analysis models. Faced with data proliferation and ambitious to bring in more value to the profession, 86% of financial directors want to easily exploit the data in order to swiftly provide quality management information. For the CFO in a large company, performance management must serve first to simplify the information (75%). For the CFO of a SME, the management models must be enriched with more details and dimensions (53%).
Surveying of general/senior management revealed that the CFO participates heavily in the trade and strategic decisions. With 2019 budgeting, one in two financial departments predict growth being organic, sustained namely by business renewal (31%) and the reorganisation of the company’s activities (28%). It is worth noting that 15% of CFOs count on increased agility with partnerships and alliances. Competitiveness will spearhead growth strategy, achieved by strengthened costs control (54% of surveyed CFOs) and by investing in technology innovations (55%) deemed necessary for increased competitivity, and ultimately, the growth of the company.
“The financial director’s role has expanded greatly over the last decade. It is essential today to make the best use of the data, to know how to identify the additional points of growth, productivity and cost control. The Financial Director has become a true partner of general management in the definition and implementation of growth strategies. "- Maryse Lecutier, PwC Partner.
The challenge of digitising processes may seem complex for many financial departments, but technological advances bring simple and effective technical solutions to their fingertips, which today allow CFOs and financial controllers to go further in optimisation of financial processes and:
The expected gains of digitisation are recognised with improved data traceability, enhanced productivity and better collaboration between users. Furthermore, 64% of financial departments aim to standardise and harmonise processes by the end of this year (2019). Another challenge of digital transformation is the reduction of physical exchanges between customers and suppliers, which has been ongoing for some time and remains a priority for 60% of financial managers. The reduction of physical exchanges has become a pillar of business stakes because it allows to cut costs and ensure efficiency. We also note the acceleration of the digitization of the closing process, from 6% in 2018 to 28% in 2019. The automation of transactions is also emerging and will become a reality for one in five financial managers in 2019.
The changes currently observed (the digitalisation of performance management, the digitalisation of transactional processes) have an undeniable impact on the performances sought by financial departments. The first skill required to accompany these transformations is a transversal coordination managerial skill. For 46% of CFOs surveyed, it is a matter of acquiring the necessary skills to better exploit and analyze management data.
These skills will be very widely developed internally within the financial departments. Other challenges for talent management in 2019 are mainly the resistance to change in current practices. The solutions favored by CFOs are mobility and cross paths, especially in large companies. In smaller companies, this solution being less feasible, we will favor traditional approaches, training in particular.
The perception of financial departments on their exposure to risks (cybercrime, damage to the image, espionage, sabotage) increases with the size of the company: 71% of large groups consider that their exposure is strong or very strong, against only 24% of SMEs. Given this fact, the strategies implemented to protect themselves vary according to the size as well. The diversification of the company's activities may call into question the integrity of data and information systems, as well as the security of financial flows. Financial departments are also aware that new risks may arise with an increasingly connected world.
Large companies have invested heavily to guard against cyberattacks. For more than one in three financial departments, cyber risks weigh as much in the balance as exogenous operational risks. For SME’s, business risks (operations, image) are at the top of their concerns. Only 11% of SMEs have a strategy for the prevention against cybercrime, the attack on their image, even attempts of espionage or sabotage. It is alarming that SMEs seem to be rather poor in the face of these risks. The financial investment strategies in 2019 will be the broadening of investments and diversification in terms of geographic risk diversification (geographical diversification and support chosen for treasury shares).
The number one priority of CFOs in 2019 remains performance management: providing the company with reliable data enriched with up-to-date analysis. Thanks to the process of digitisation, financial departments become more agile and support the company’s growth more efficiently. Actively Contributing to the growth strategy is currently the number two priority of the CFOs (the study predicts that it will become the top priority, followed very closely by performance management).
In the context of digital transformation, the financial departments are facing new risks related to data integrity and securing data flows. To keep a lid on these threats while supporting the company’s growth strategy, the CFOs are going to invest in research and pay particular attention to nurturing talent and skills internally. Process optimisation, increased reliability of the forecasts and risks prevention are some of the favoured strategies.