Partnership Photo by fauxels from PexelsWorkday has published the results from a recent survey of EMEA senior finance and IT leaders. The full scope of the survey also included US and APAC respondents and showed some differences in the findings. The report, entitled “The CFO-CIO Partnership”, is 27 pages in length, examines the state of digital finance transformation in EMEA, how these efforts are impacted by finance and IT, and how CFO-CIO alignment is central to transformation success.

The key findings include:

  • Only 4% of EMEA’s organisations have reached digital finance maturity.
  • Only 8% of the region’s IT leaders strongly agree their organisation has a single unified view of all operational, financial, and people data.
  • 50% of EMEA’s finance heads admit that dealing with day-to-day finance concerns leaves little time to plan for long-term sustainability and risk management.
  • In 89% of EMEA’s organisations, finance and IT are not always aligned or collaborating regularly.

The authors believe that organisations must generate insights from financial and non-financial data to improve this alignment. Improve agility with the use of technology and improve the skills of internal resources to meet modern technological requirements.

What is in The CFO-CIO Partnership report

FT Longitude conducted the survey in March and April 2022. However, while the economic background may have evolved, the findings are still valid. The US version of the report was published earlier this year. This report is based on the 480 responses from the 1,060 that were from EMEA.

The report has a brief introduction and an executive summary that highlights the key findings from the report. The bulk of the report is divided into four sections:

  • EMEA’s digital finance opportunity
  • Insights: Exploit financial and non-financial data to improve financial decisions
  • Agility: Harness finance technology to align the organisation and improve outcomes
  • Talent: Equip teams with tools and skills to collaborate and innovate

Each section includes data from the survey, analysis and supporting quotes from Workday leaders and customers. It concludes with a call to action for CIOs and CFOs to partner and drives digital finance transformation together.

Frederic Portal, product marketing director of EMEA financials, Workday
Frederic Portal, product marketing director of EMEA financials, Workday

Frederic Portal, product marketing director of EMEA financials, Workday, commented, “In a world of constant change, it’s more critical than ever that CFOs and CIOs align to drive digital transformation. Building a digital finance function that improves better decision making for planning and reporting, including broader requirements around ESG, will provide the data and insights needed for organisations to best keep pace in today’s business environment.” 

EMEA’s digital finance opportunity

The report identifies that the state of digital transformation in finance varies across different countries. Digital maturity in UK&I is much higher than elsewhere (49%), ahead of Germany and France, though the report does not reveal the breakdown. The authors believe that UK&I leaders have more time for strategic thinking, but there is little quantitative or qualitative data to back this up.

The report also found that the perceived benefits of digital transformation vary across Europe. In Germany, the top benefit is that it delivers the tools for training and upskilling employees. In France (31%) and UK&I (27%) see automated systems for reporting on non-financial data as the key benefit.

The report finds that the top barrier to transformation is a lack of alignment between the CIO and CFO in EMEA (21%). Rida Villanueva, director – cybersecurity Grant Thornton comments, “Improving collaboration between finance and IT should be more strategic. When you’re aligned in terms of business growth, your finance follows, and so does your technology.”

In Germany, the lack of financial skills within the IT team is seen as the highest barrier, but this contributes to the lack of alignment.

Insights

This section identifies the importance of bringing together finance and non-finance data to deliver the insights that a modern business requires. Barbara Larson, CFO of Workday, notes, “The need to improve decision-making by enabling secure, timely access to reliable data is the biggest driver of technology modernisation within organisations; harnessing the vast amounts of data being generated and collected continues to remain a challenge.”

However, only 47% of EMEA IT heads say they have a single view of all business data. Finance teams in EMEA perceive that their reliance on IT for access to data is their biggest barrier to gaining usable insights (27%). However, there are other concerns, Data security and governance (26%) and a skills shortage to generate insights (22%) and work with emerging technologies.

The section also looks at the rise of ESG on the finance leaders’ priority list, with 54% wanting responsibility but only 34% of EMEA CFOs having it. It is ESG and operational data, alongside finance data, that CFOs see as the most important to derive insights from. Surprisingly, Market is less important, except in UK&I, when 43% see its importance. Again understanding why it is important would bring further insight into the report.

The section ends with four questions and three suggested actions for CFOs to take to help reflect on the findings and how they relate to their organisation.

Agility

At the core of this section is a push for CFOs to drive transformation within a modern ERP like Workday. The argument is that this will deliver the agility and flexibility a modern organisation requires. There is a perceived barrier, though; 49% of finance and IT leaders in EMEA admit that, while ERP modernisation is critical to future success, they do not have time to undergo such a sizeable transformation. Not only is time a problem, but 54% also perceive that finance transformation is not tied to the business-wide transformation objectives.

As Ernesto Boada, Interim CIO of Workday, notes, “We need to have that conversation to put our priorities together – what finance is trying to accomplish and what IT needs to accomplish – to create a fair portfolio. That’s why you need to have both teams at the same table.”

There are three action highlights that organisations must take to harness finance technology transformation. What the report highlights is a paradox. Finance Transformation will help with alignment between IT and Finance once achieved, but to achieve finance transformation, IT and Finance need to better align. Organisations must overcome this paradox to advance.

Talent

The third section highlights what is currently seen as one of the biggest challenges facing organisations, talent. There is a huge skills shortage for new (46%) and emerging (45%) finance technologies. These shortages come at a time when skills are most needed.

There are some differences between EMEA and the US in where finance and IT leaders are putting their skills emphases:

  • Agility and adaptability – EMEA (24%) US (19%)
  • Evakuation and Reporting – EMEA (24%) US (18%)
  • Innovation – EMEA (20%) US (25%)
  • Interpersonal skill – EMEA (19%) US (30%)

This rise in the importance of soft skills is also seen elsewhere in other research. Is EMEA lagging behind the US, or are agility and adaptability more important?

There is some hope, though, in Europe, led by France and Germany, Finance and IT are working together to help each other. However, the cooperation between the two functions is still lagging in UK&I. For example, IT regularly advises on emerging technology for finance in Germany (69%) and France (70%) but only 34% of the time in UK&I. The section ends with the three actions that organisations must take to drive finance and IT talent transformation.

Enterprise Times: What does this mean

This report could have been much longer and delivered more survey results. Instead, it provides some rapid insights and analysis into an intriguing data set without necessarily delving deeply into any of the subjects raised.

While each section provides actions for organisations to take away, the authors should also have provided the CFO questions in the agility and Talent sections as well as in the Insights section. It may also have been a good idea to add questions for the CIOs to take away. A partnership is based on both parties actively participating, and while CIOs can infer the questions they need to ask themselves, a quick takeaway would have helped.

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