SAPPHIRE is not only a place to hear about the latest SAP developments but also an important source of business strategy news. For example, today IBM released its Global CFO Study 2008 at SAPPHIRE today, with the CEO study to appear tomorrow. IBM’s CFO Study, executed in cooperation with The Wharton School and Economist Intelligence Unit, is full of data points that indicate where the finance organization—and, by association, the rest of the enterprise—is going.
- Nearly 20 percent of enterprises have no formal risk management documentation capabilities and 13 percent lack a formalized risk framework. This is despite the fact that 52 percent of all survey respondents encountered a risk episode that “substantially affected” their operations and/or results.
- Finance is increasingly tasked with risk management, as 60 percent of enterprises report that the CFO owns this activity.
- In relative terms, outsourcing isn’t a popular way for companies to reduce the complexity of their finance organizations. Less than 10 percent of respondents use outsourcing enterprise-wide.
- Eight percent of enterprises would need a week or more to discover their spend on global travel last month; 3 percent couldn’t even get a snapshot.
- Almost all financial organizations understand the value integration (“integrating processes, data and technology leading to achieve greater transparency”) but over 90 percent of enterprises consider it difficult. Twenty-five percent consider it a “considerable benefit” but still too onerous to execute.
- The finance workload is shifting. Today, 66 percent of finance work is transactional; in three years, less than 40 percent will be. The time spent on decision support and performance management will nearly double in three years. Time spent on control and risk will grow slightly.
There’s a lot of food for thought here, but the bottom line is that finance is becoming more strategic than tactical, more risk-sensitive, and more integrated. These are emerging best practices that warrant careful consideration from the CFO and CEO.
Demir Barlas, Site Editor