Fewer than 10% of finance-related activities are dedicated to analysis and action that support decision-making, according to a study on the role of the chief financial officer (CFO) by technology firm IBM. Instead, many activities are low-value and transactional.
Published on Jan. 20, the IBM 2021 Global CFO study surveyed 2,000 C-suite finance leaders in 28 industries and 43 locations worldwide.
“Freeing up the time to work on strategic challenges is an issue for finance organizations,” said Natalie Pia H. Azarcon, managing partner at IBM Consulting, IBM Philippines, “especially if finance doesn’t have the right tools and systems needed to automate traditional work, such as making payments, closing books, and the like.”
Only 46% of CFO respondents in the Asia Pacific, including the Philippines, say finance is effective at execution.
“Half of the finance department’s time continues to be spent on transactional activities, which have remained relatively consistent across IBM’s 18 years of research,” said Ms. Azarcon.
Artificial intelligence (AI), she told BusinessWorld, can be leveraged to automate and eliminate low-value and transactional activities, thereby freeing up the time to drive deeper business insights and better business outcomes.
The IBM study found that 63% of Asia Pacific CFOs say AI technology has been implemented in their planning processes, with 51% also reporting AI’s implementation in financial forecasting, management/performance reporting (52%), and profitability/margin analysis (50%).
“Today, in the modern tech-fueled economy, the CFO is uniquely situated to influence the organization’s digital transformation: setting the financial baseline, building the business case, helping to determine the value of each initiative, collaborating across the C-suite to gain buy-in, and tracking benefit realization,” said Ms. Azarcon. — Patricia B. Mirasol