Transforming finance can no longer be delayed
27/09/23
According to PwC’s survey, finance functions must be strategically reinforced and new skills must be acquired
While finance leaders are improving their digital competence, finance functions of companies still use outdated tools and processes. They do so although new skills and working methods, exploiting the power of data, and reinforcing the finance functions are required to support, measure, and provide feedback on companies’ performance in real time.
Obstacles to transformation
Data-based insights and fast scenario modelling have never been more needed to support decision-making, as shown by PwC Hungary’s 2023 CFO Survey. 84% of CFOs keep an eye on internal stakeholders’ interests but only 28% think that other leaders have a good understanding of the finance function, its challenges, and the value it creates. This is a substantive obstacle to change because constant consultations drain energy from strongly demanding tasks such as compliance with new regulations (e.g. global minimum corporate tax, ESG) and management of risks arising from the uncertain economic environment. However, the pressure to reduce costs (2023: 75%, 2022: 62%), attracting and retaining suitably qualified staff (2023: 75%, 2022: 64%) have become even more formidable obstacles, compared to last year.
Limited budget and skills shortage
CFOs are somewhat more confident than they were in 2022 (this year, 85% are concerned about the uncertain economic environment, as compared to 96% last year). However, lack of suitably qualified personnel (71%), limited budgets allocated to projects (71%), and slow response time in their organisations (69%) still hinder the achievement of their goals.
Respondents still see isolated operation (63%), high resource demand for the compilation and analysis of reports (53%), and lack of process approach (47%) as crucial issues in their daily work. They typically support forecasting and appropriate risk management by planning liquidity (88%), improving receivables management (63%) and audit functions (62%), as well as performing a preventive screening of business partners (61%). The majority of CFOs said that their plans for the near future include, among others, adoption of a new flexible planning method (59%) and development of data-based forecasting models.
Finance teams in transformation - or transformation requires training
“Going forward, increased focus must be given to transforming and developing the team. Finance teams that are not willing to set up a new operating structure will spend most of their time producing, processing, and reporting data in five years from now”
He emphasizes that CFOs miss the same skills, i.e. IT skills, innovation skills, change management and project management competencies, in their teams as last year. The lack of these skills may pose serious obstacles to change even in the short term.
In regard to future team structure, CFOs still expect that a smaller number of employees will be involved in traditional accounting tasks, and decision support / analytical skills will gain importance, which will probably mean an overall headcount increase in the finance function for the majority of companies. They based their expectations on the growth of their companies (62%), the takeover of new tasks (56%), and the acquisition of new skills (50%).
Dynamic financial data tables - where are you?
Although 53% of CFOs feel comfortable with new technologies, 70% of them still use static tools and formats for preparing regular management reports. Almost three quarters (70%) of the companies surveyed already use cloud-based solutions and complex visualisation tools (65%) but only a minor proportion (12%) uses RPA (Robotic Process Automation) or AI (9%) tools.
According to Gábor Balázs, partner at PwC Hungary, transforming the finance function requires new skills and working methods that support enterprises in their constant adaptation.
“Observing best practices is particularly important for CFOs, which will enable them to set up functions that are best aligned with their company’s strategy. Exploiting the power of data, strategically reinforcing the finance functions, and training finance professionals can create values in the organisation which, if accompanied by a technology-driven transformation, could become finance leaders’ success stories”
Notes to editors:
Methodology: In summer 2023, PwC’s experts contacted more than 100 finance leaders in Hungary and asked them to share their views and expectations of future challenges, the headcount of their teams, the skills of their employees, and the spread of automation in the finance function by completing an online questionnaire. The survey was conducted for the fifth time in Hungary.
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