BearingPoint’s latest study reveals that only 9% of European companies reach the third and highest wave of digitalization in their CFO function, and only 12% of the finance professionals use their time on value-adding services, making it more challenging to adapt to growing uncertainty and new business requests.
AMSTERDAM–(BUSINESS WIRE)– Management and technology consultancy BearingPoint’s new CFO 4.0 study reveals that although the digital maturity of European companies’ CFO functions is still halfway from the ideal, CFO functions are keen to invest more in digital development in the upcoming years. Digital readiness helps companies ensure business continuity in challenging business and market situations.
The ideal digital maturity level of the CFO function is characterized by digital technologies and capabilities and skills that improve processes and performance and drive new value-generating business models. BearingPoint’s latest study reveals that only 9% of European companies reach this level – the third and highest wave of digitalization – in their CFO function. According to the research, the average digital maturity level in Europe was 4.9 out of 10.
Digitally mature companies recognize the value of digital innovations and have included those in their strategies. They also aim to utilize data more efficiently in decision-making processes and to have a technology-driven culture.
Lack of a clear strategy and vision are the biggest challenges to successful digitalization
According to the research, 41% of companies are currently focusing on operational efficiency improvements, where digital solutions improve day-to-day work through process streamlining and automation. On the other hand, 50% of the responding companies have already employed digital solutions to improve day-to-day work and are now serving other business functions and supporting the business with financial analytics and closer cooperation, accelerating the transformation of the whole company.
“Unsuitable organizational structures or inefficiency in technologies force CFOs to spend an extraordinary amount of time on running core activities of the CFO function instead of providing value-added services,” says Damien Palacci, Global Leader Consulting Portfolio at BearingPoint. “The focus should be on the operating model, the development of employee capabilities, and increasing the linkage between strategy and digital technology solutions.”
The research findings indicate that the biggest threats to successful digitalization are linked to culture, strategy, and people. Too many priorities and the lack of a clear strategy and vision are the two most significant challenges preventing successful digital transformation within the CFO function. The majority of the study respondents believed that the performance of the CFO function could be improved if employees were willing to experiment, take risks, and work in distributed teams.
“Technical skills alone are less likely to increase the performance of the CFO function if there is no ability to set the right finance strategy and to conceptualize innovations,” comments Johannes Vogel, Director responsible for the CFO 4.0 Finance Digitalization initiative at BearingPoint.
Digital readiness helps companies ensure business continuity in turbulent market situations
Due to the COVID-19 pandemic, the current focus of many CFOs is on critical business continuity, liquidity and performance. The current situation can either accelerate the digitalization within the CFO function or slow it down, depending on the capabilities of the organization. In this challenging context, it is essential for CFOs not to lose sight of the importance of short-, mid-, and long-term transformation goals of the CFO function. The study shows that only 12% of finance professionals use their time on value-adding services, making it more challenging to adapt to growing uncertainty and new business requests.
“Digitalization initiatives are even more important when business conditions change,” says Damien Palacci. “How companies stay connected, adapt to remote work, and are able to analyze scenarios will have a crucial impact on business continuity and recovery.”
A balanced portfolio of measures can help balance the needs of short-term continuity management with more long-term, strategic transformational visions. The ability to seize opportunities fast and simplify processes is crucial so that the CFO function can support the business and create new business models as efficiently as possible.
“Changes in the business market can always result in new opportunities if the CFO function seizes them. The digital readiness of companies should not be considered as fixed: it should evolve alongside changing requirements,” concludes Johannes Vogel.
The study is available for download on the BearingPoint website: www.bearingpoint.com/en/our-success/insights/cfo-40-digital-transformation-in-the-financial-function/
BearingPoint is an independent management and technology consultancy with European roots and a global reach. The company operates in three business units: The first unit covers the advisory business with a clear focus on five key areas to drive growth across all regions. The second unit provides IP-driven managed services beyond SaaS and offers business critical services to its clients supporting their business success. The third unit provides the software for successful digital transformation and regulatory requirements. It is also designed to explore innovative business models with clients and partners by driving the financing and development of start-ups and leveraging ecosystems.
BearingPoint’s clients include many of the world’s leading companies and organizations. The firm has a global consulting network with more than 10,000 people and supports clients in over 75 countries, engaging with them to achieve measurable and sustainable success.
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