CFOs have certainly opened their eyes when it comes to increasing digitization. The work of the traditional accounting and compliance department is changing to self-driving finance, self-service intelligence and integrated business planning and budgeting. CFOs are most definitely aware of the need to transform.
Finance departments are increasingly expected to act as business partner and increase their impact on the profitability of the company – but many companies struggle with that change. The work of finance departments is roughly divided into three layers. One layer is transactional; specialized expertise forms another layer, involving reporting, audits and planning; and finally, there’s decision support.
The third layer is where interpretation is given to the role of business partner. But in practice only few finance departments get to that top layer. What I often see is that 70% of the time is spent on transactional business and roughly 25% on specialized expertise. That leaves only about 5% to spend on supporting strategic business decisions.
The CFOs we talk to want to turn this division of work around and they understand that modern technology can help free up a lot of this time. So, why is it that business partnership often does not materialize? By measuring their department’s maturity across four stages – standardize, optimize, predict and drive – using the Business Empowerment Maturity Model, CFOs can use that insight to produce an action plan to remove structural deficiencies and free up time for high-value activities.
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