Armonk, N.Y. - The IBM Chief Finance Officers Study of 900 senior finance executives worldwide reveals only 14% of insurance respondents rate themselves highly effective in supporting the CEOs efforts to grow the company.The study, developed in co-operation with The Economist Intelligence Unit, finds that at a huge cost to the future competitiveness of companies, almost 50% of executives report finance staff are tied up in transactional activities such as processing accounts and tax transactions, with only a quarter of staff focused on decision support--performance and growth focused activities. Furthermore, respondents state 64% of Insurance finance organizations do not have robust processes and activities in place to support growth.
Respondents excel at reporting historical financial results and meeting compliance requirements, but many are then unable to unlock, from the exploding volumes of data, the information that could uncover future business opportunities and foresee trends or costly problems ahead of time.
Almost 40% of companies still have separate manual processes and controls to collect compliance data that deliver backward looking ìafter the factî reaction to risk events and growth opportunities. As a result of fragmented systems, data gathering is difficult and fact-based insight hard to come by, leaving decision-making to intuition. About 70 percent of respondents have not yet implemented process and data standards, pursued process simplification, reduced the number of disparate platforms, rationalized budgeting and forecasting tools or reduced the number of enterprise resource planning (ERP) systems enterprise-wide.
Key recommendations:
Enable insight. Standardize, simplify, then optimize. Financial executives must take the lead in standardizing, simplifying and establishing common processes that rationalize the myriad of finance technologies and tools used today to improve the integration of information and delivery of insight. Information must be turned from a passive, closed state into an active 'serviceí that can be leveraged by the organization.
Enhance insight. Partner for growth and drive a culture of innovation. Financial executives need to consider business intelligence strategies such as performance dashboards to enable financial information to be used to help drive innovation. In mature markets where business model innovation is required to drive growth in new ways against a tide of nimble market entrants, predictive analysis and information is critical to create breakthrough business designs. A dashboard environment, fed by real time data sources, facilitates proactive decision-making and idea sharing by allowing representatives across the company to see the same up to date financial information as the chief executive officer - in real time. This enables the collaborative, fact based decision making that is needed to enhance business performance.
The report can be downloaded at www.ibm.com/bcs/cfosurvey.
Source: IBM Corp.
