Great Read: PwC Report - 58% of CFOs Have Increased FP&A Focus Since Last Year
Recent insights from the PwC Pulse Survey reveal that finance chiefs are dedicating increased attention to core finance functions, technology investments, and implementations compared to the previous year. As the demands for Financial Planning & Analysis (FP&A) skills continue to increase, CFOs are taking on a more active role in business decision-making. By leveraging data and adopting cost-efficient technology beyond the finance function, they are driving significant results. This shift underscores the necessity for finance leaders to refine their FP&A capabilities and invest in talent to enhance overall business performance.
The Expanding Role of FP&A: A Key Driver for Business Transformation
The most recent PwC Pulse Survey highlights the growing importance of FP&A, revealing that over half (58%) of CFOs surveyed have increased their focus on FP&A compared to last year.
In tandem with this focus on FP&A, there is a significant emphasis on business performance management and digital transformation. Nearly half (44%) of CFOs plan to invest in technology to reduce costs, though specifics on the types of costs remain unclear.
Leveraging Technology and AI: Navigating the Path to Better FP&A
This is where we see opportunity. Many CFOs are exploring which technology to use, and our experience with major software providers helps guide companies through the selection and implementation process. Whether it's integrating FP&A tools or optimizing processes, we have the expertise to help CFOs leverage technology effectively.
Surveyors also suggest leveraging AI for improved predictive forecasting and complex scenario planning. However, the type of AI provider to use, the cost-benefit analysis, and cybersecurity considerations remain vague for many CFOs. The conversation around AI remains broad, but our experience with AI-enabled tools positions us to help CFOs make informed choices. By implementing AI solutions that provide tangible business outcomes, organizations can improve both forecasting accuracy and decision-making.
CFO Spending Priorities
When asked about their spending priorities over the next 12 months, CFOs were split. More than half (56%) are focused on improving margins. Other key areas include increased use of technology to reduce costs (44%), optimizing supply chains (39%), fostering C-suite collaboration (37%), and making portfolio adjustments (29%).
Surveyors emphasized the importance of C-suite collaboration, noting that CFOs who share long-term financial outlooks with leaders like the CEO and CMO can drive technology improvements throughout the business. This collaboration is essential for aligning financial strategies with broader business goals, ensuring that financial planning is integrated into the company's strategic vision. By working closely with senior leadership, CFOs can contribute to more informed spending decisions and enhance the overall effectiveness of the organization.
Prioritizing Talent Development and Strategic Influence
Talent development remains a top priority, with 52% of CFOs highlighting the need for skilled teams. While the survey doesn’t specify which skills are most valuable, it underscores the necessity for collaboration between finance leaders and other executives to tackle these challenges effectively.
A third (33%) of CFOs also prioritized expanding their influence across the C-suite. For example, they can serve as a bridge between the CEO and tax leaders, as CFOs can decode tax language so that the CEO can understand key tax considerations and strategies.
This growing focus on talent development reflects the increasing value companies are placing on FP&A expertise. A notable example is Kevan Parekh, Apple’s head of FP&A, who was recently promoted to CFO—underscoring the strategic importance of FP&A in driving business success. CFOs are recognizing the critical role FP&A professionals play, not just in financial planning but in shaping the future of their organizations.
Conclusion
As the role of the CFO continues to evolve in response to a dynamic business landscape, the heightened focus on FP&A represents a crucial opportunity for organizations to enhance their financial planning capabilities. By embracing technology, leveraging AI, and fostering collaboration across the C-suite, CFOs can drive strategic alignment and operational efficiency.
The investment in talent development further solidifies the critical role of FP&A professionals in shaping business success. As evidenced by the increasing recognition of FP&A's strategic importance, companies are positioned to thrive in an environment where data-driven decision-making and effective financial management are paramount.
In this transformative era, finance leaders who prioritize these elements will not only enhance their organizations’ performance but also secure a competitive edge in the market. The future of finance is bright, and by adapting to these changes, CFOs can lead their companies into a more prosperous and resilient future.
View the CFO.com article about the PwC Report here or access the findings from PwC’s Pulse Survey here.
To learn more about how Clarendon Partners can support your finance function in this evolving landscape, reach out to us at evolve@clarendonptrs.com.
References:
· 58% of CFOs have increased FP&A focus since last year: PwC report
· Kevan Parekh's Journey In Apple From FP&A To CFO | What CAs Can Learn?