82% of finance professionals saying stakeholders need more than financial performance measures
Global research into the evolving role of finance functions finds real-time analysis, and data beyond the financial, holds the key to navigating volatility and transitioning to a more sustainable future.
The new report, the Planning and Performance Management Paradigm, by ACCA and Chartered Accountants Australia and New Zealand (CA ANZ) in association with PwC, asked over 3,000 finance professionals around the world for their views on the future of the finance function. Overall respondents report too much focus on past financial performance and limited insight to the other data needed for ESG purposes.
Only 16% of respondents said ESG forecasting was ‘fully integrated’ in their financial planning and performance process, while 82% said stakeholders needed new performance measures beyond the financial. Just over half (56%) of respondents said they currently give ‘equal’ focus to financial and non-financial areas, such as operational objectives.
Commenting on the report, which is being launched at the World Congress of Accountants in Mumbai, ACCA chief executive Helen Brand OBE said: “Finance professionals play a vital role in guiding organisations towards their strategic goals through highly uncertain times. In a rapidly challenging economic environment, with increasing urgency to reach net zero targets, finance teams need real time, organisation-wide data to rapidly identify and respond to changing circumstances.“Performance drivers are no longer just financial – sustainability and non-financial disclosures need to be integrated into planning and performance processes to create a multidimensional picture beyond the constraints of annual planning cycles. For many organisations, this will mean transformation of planning and performance management processes and culture.”
CA ANZ chief executive Ainslie van Onselen said that financial professionals have the skills to evolve planning cycles and performance measurement – but development and continuous learning, as detailed in the report, is required.
She said: “The role of financial professionals and CFOs is increasingly holistic and value centric, and accordingly they need to develop new forms of performance measurement for investors, analysts and capital markets, over and above pure financial measures.”
“Financial professionals need to continue to develop the skills to build a business and value case for change and investment prioritisation. This playbook provides tools and information to assist with this.”
The report recommends planning and performance models should be data-driven, agile and use real-time data where possible. The process should be forward looking, with scenario planning and integrated forecasts. Data and technology are key to achieving this and, where feasible, should be integrated in the organisation’s Cloud-based application architecture. This is currently a potential stumbling block, with the research finding this to be ‘disjointed’ and organisations still relying on spreadsheets and not harnessing new technology efficiently.
Brian Furness, partner and global head of finance consulting at PwC, commented: “There’s a huge opportunity for finance teams to drive value and a more rounded view of organisational performance through collaboration, digital innovation and data analytics.
“CFOs can lead this move by focusing on a set of broader metrics and value drivers for the organisation rather than limiting themselves to the traditional financial performance agenda. To do this, finance teams need to collaborate across the organisation and externally, and become more comfortable with exploring and analysing non-traditional data sets such as supply chain, logistical and operational data, all of which provide insights into future performance. While traditional annual plans give a point in time, a more agile approach to planning is needed in times of uncertainty and greater stakeholder expectation.”
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Notes
This research was undertaken jointly by ACCA and its strategic partner CA ANZ and in association with PwC, July 2022 as the economic prognosis in many developed economies was starting to worsen. The economic uncertainty we are now facing serves only to increase the importance of the role finance plays.
Building upon nearly 3,000 survey responses and the contributions of nearly 100 individuals, the report explores the current state, the drivers for change, and the future vision of planning and performance. The report builds upon earlier ACCA/PwC finance function research as well as the themes of analytics and transformation that were developed in the ACCA/CA ANZ research.
About ACCA
ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.
We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.
Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.
Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand (CA ANZ) represents more than 134,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.
CA ANZ promotes the Chartered Accountant (CA) designation and high ethical standards, delivers world-class services and life-long education to members and advocates for the public good. We protect the reputation of the designation by ensuring members continue to comply with a code of ethics, backed by a robust discipline process. We also monitor Chartered Accountants who offer services directly to the public.
Our flagship CA Program, the pathway to becoming a Chartered Accountant, combines rigorous education with practical experience. Ongoing professional development helps members shape business decisions and remain relevant in a changing world.
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