TCS 2021 Global Financial Leadership Study
Establishing priorities
Our research found that there are four main areas that are causing finance teams to make significant planning and forecasting errors:
The pandemic exposed these failings, says Katherine Motlagh, EVP and CFO of CyrusOne, the US-headquartered global data-center provider.
“The pandemic didn’t make the change, but it highlighted the vulnerabilities. It created an opportunity for us to think in a broader sense about finance transformation and to rethink how we run our FP&A long term – we are now looking to improve both our processes and our tools.”
KATHERINE MOTLAGH EVP and CFO, CyrusOne
Planning needs to be flexible
One clear problem is adaptability. More than half of all finance teams are struggling to perform essential forecasting and budgeting functions consistently and accurately. This shortcoming means that organizations lack the information needed to respond to market developments.
Finance teams struggle to adapt their planning at speed
Proportion that say they consistently fail to perform specified task, or perform the task but with significant errors
Derive aligned and robust budgets
Rapidly create multiple, detailed "what-if" scenario models based on different possible internal and external factors
Deliver short-term forecasts
Reallocate resources quickly owing to changing business demands
Finance has a skills gap
Many of the organizations in our survey say they lack the FP&A skills they need to become insight-driven enterprises. Problem areas include risk; control and compliance; advanced data analytics; advanced FP&A technologies; and scenario modeling.
Skills challenges
Finance teams possessing these skills to a significant or full extent
Risk-assessment capabilities
Advanced data analytics
Ability to embed preventive controls
Ability to use advanced FP&A technologies, e.g., AI and machine learning
Finance is not putting its data to work
Many organizations are performing strongly in acquiring and processing data – 79% of finance functions say they possess robust data and two-thirds are generating insights from this information. Now, however, the challenge is to secure more value from this data, particularly to support strategic decision-making.
of forecasting activities are informed by intuition rather than data
Finance often seems to be reluctant to commit to more scientific decision-making processes. The function needs to develop accurate, adaptive forecasting and planning that builds on a foundation of high-quality data and advanced automation and analytics.
Risk assessment is too rigid
One of respondents’ most serious FP&A capability gaps is in risk-evaluation practices, which they say are too rigid: 39% have this concern. In a market that is likely to remain fluid and dynamic, that rigidity will leave organizations vulnerable. Risk assessment has to be a priority area for finance leaders.
believe they possess risk-assessment capabilities to a full or significant extent
