A recent video on Yahoo Finance kicked off with an ominous question from the show host: “What are CFOs so worried about?”
The segment was centered around an interview with Sanford Cockrell, national managing partner with consulting firm Deloitte, who was speaking about its latest report, Modernizing Finance: Why The Time Is Now And How Finance Can Get There.
As Cockrell noted, there is more than one worry for the majority of financial leaders: interest rates, of course, but also contraction in the U.S. economy, hiring freezes and much more. The biggest harbinger of angst, however, is a drop in expected revenues that’s more severe than anything Deloitte has tracked in the history of the survey.
“When we see these lows around sales and earnings, it’s almost an ‘a-ha’ moment about what’s going to come next,” Cockrell said on the Yahoo Finance web series. “CFOs are quite concerned about what the growth cycles are going to look like over the next six months to a year.”
The concerns meet their fix
If you actually read through the full report, those worries are exacerbated by a feeling that there’s little finance departments can do to roll with the economic punches. Deloitte suggests CFOs and their teams are essentially burdened by either too many key performance indicators (KPIs), the wrong KPIs or KPIs they can’t measure effectively.
These stats stood out in particular: only 25% of those polled say they have time to spend on strategy and 51% see themselves more as “stewards” – in other words, doing their best to maintain the status quo.
This is a far cry from what Deloitte suggests CFOs could do if they had the right technology:
“Enhanced systems would enable finance to capture and summarize relevant information, including financial and non-financial performance. Finance might also provide modelling scenarios and predictive analyses that address different capital allocation decisions, return on investment implications and various cost of capital models.”
In short, enhanced systems that build upon existing technology, such as Excel, allow the finance department to spend more time on strategy and analysis rather than on data gathering efforts.
Part of the transition towards action may already be under way. In what felt almost like an afterthought during his interview with Yahoo Finance, for instance, Cockrell noted that CFOs were also increasingly concerned about cybersecurity, even though it’s not necessarily their area of expertise.
“IT people report into CFOs about half the time, but CFOs still have a responsibility to make sure they’re protected,” he said.
Just as they’re ensuring hackers can’t get at corporate data, CFOs may start to implement systems that protect the long-term growth of their companies—a similarly important responsibility.
After all, taking action is better than treating business trends like just another worry.
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