How future-ready CFOs are driving - Tata Consultancy Services...How future-ready CFOs are driving...
Transcript of How future-ready CFOs are driving - Tata Consultancy Services...How future-ready CFOs are driving...
How future-ready CFOs are driving
real-time business performanceEmpowering the enterprise with data-driven financial insights
TCS 2020 CFO Study
Key findings
September 2019TCS Business 4.0
TM
Institute
TCS 2020 CFO Study
Forward-thinking CFOs are considering how they can play a strategic role in helping transform the
business from a traditional model to one that enables executive access to insights in real time.
They are asking questions like: “How can I turn the rising tide of enterprise data into real-time
insights that drive growth across the entire business? How can I better manage control,
responsibility and accountability to transform my organization to support future-ready digital
business models? And how can I best leverage new technologies—like blockchain, analytics,
machine learning and AI—to enable new forecasting models and a truly agile finance
organization?”
Because finance leaders in every industry are asking these questions, the TCS Business 4.0
Thought Leadership Institute spoke to more than 500 enterprise CFOs in North America and
Europe in the upcoming 2020 TCS Chief Finance Officer Study to do a deep-dive on these topics.
During the remainder of 2019 and into 2020, TCS will release a series of reports that examine the
ambitions of the real-time CFO in large organizations. Where they are heading, what do they
want to do differently, and what it will take to get there?
This deck introduces the initial research findings.
Click here for more information on the study, and to receive each report as soon as it is released.
Research snapshot
Study demographics
High tech (tech, web/cloud…
Financial services (incl. banking,…
Insurance
Retail
Consumer packaged goods (food a…
Travel, transportation & hospitality
Telecommunications service…
Automotive
Industrial manufacturing
Life sciences & healthcare
Media, entertainment & informati…
Healthcare
Information services
16%
13%
12%
11%
10%
6%
6%
6%
6%
6%
5%
1%
1%
Sector Job Title
S1. In which country is your main place of work? S2. In which of the following sectors does your organization operate? S3. What is your job title? S4. What is your organization's total revenue size currently? S5. To your best estimate,
what proportion of your company's key operational and financial performance data can you access, and take action upon, with immediate effect?
Our findings reveal stark differences in business attitudes and processes between those at
"real-time" businesses and those at their more traditional counterparts. For the purpose
of this analysis, we refer to these two groups as, respectively, "real-time leaders" and
"slow-time followers".
Real-time leaders (n= 98) = Those who are able to access, and take action upon, with
immediate effect, 90-100% of key operational and financial performance data.
Slow-time followers (n= 91) = Those who are able to access, and take action upon, with
immediate effect, 1-29% of key operational and financial performance data.
Real-time leaders vs slow-time followers
Hover over the map to view the percentage of respondents from each country
The companies surveyed have at least $1bn in annual revenues
500+ respondents overall
Key storylines
The growth catalyst - CFOs have a clear view of their "futurist" role and how it can operate both within and beyond
the finance function. From building the economic case for new technologies and business models, to devoting more
time to innovation and driving an agenda of cultural change, the emboldened CFO is laying a framework that will
fundamentally change the way they - and their businesses - operate.
Embedding front-to-back transformation - Delivering the cultural changes needed to embed new "front-to-back"
enterprise models and technologies is a major challenge facing CFOs; 50% admit that their organizations' execution of
change management is falling short. New digital leadership approaches that empower the enterprise by sharing
control, responsibility and accountability emerge as a key focus.
Agile finance, competitive future - CFOs view new agile forecasting models as tools for overcoming the common
challenges they face, no matter where they are in their transition to becoming a real-time business. When it comes to
forecasting, executives must take care not to become so blinded by technology priorities that they leave themselves
open to disruption: fewer than one in four cite "competitor landscape" as a forecasting priority over the next six years,
and fewer than one in three (29%) cite "customer demand."
New horizons: instantaneous data and promising technologies - New technologies and applications are fast-tracking
the CFO’s "data view," but most struggle to capture and clean the data required for robust decision making. Seven in
ten executives agree that finance must serve as the proving ground for blockchain technology, but only a minority are
sufficiently educated on the widespread data benefits it will bring - giving them the tools to accelerate even further
ahead of the pack.
1. Next-generation CFO
"That external customer-facing piece is really
important - negotiating, communicating and
relationship-building. I see people come up
through finance functions and they generally
don't have that type of core leadership
capability. They've accelerated and dealt with
their internal business quite well, but then,
when push comes to shove, they're unable to
work those situations and help move the
business forward."
Finance director, global telecoms company
Key findings
Emerging technologies and the new business models they enable will be a
key focus for CFOs. There are striking differences in priorities across
industries.
The cultural changes needed to embed new practices are rising up the CFO
agenda, yet there are warning signs that many are not paying due attention
to skills development in this area. The majority are setting their sights on
developing the "futurist" role.
Our real-time group makes a clear case for change, highlighting the priority
skills their more traditional counterparts cannot afford to be complacent
about, even in the early stages of their transition journey.
Technology-enabled business model evolution/transformation
Capital allocation for digital transformation initiatives
New product and service development
Embedding new cultures and ways of working
Enterprise-wide analytics governance
Enterprise-wide data governance
Blockchain evaluation and adoption
Enterprise-wide talent management
Non-traditional risk management
44%
40%
37%
33%
33%
31%
29%
28%
26%
Total Retail Financial services Insurance CPG High tech
Q1. Thinking ahead, to five years' time, in which aspects of company leadership do you expect the CFO in your organization to be playing a critical role? n=508
Where is the CFO heading?
Emboldened CFOs are setting their sights on a framework that will fundamentally change the way they – and their businesses
- operate. Building the economic case for new business models and technologies and devoting more time to innovating new
products and services stand out, though driving cultural change is also rising up the agenda. Notable industry differences
highlight that there is no one-size-fits-all approach to CFO transformation.
Areas where the CFO is expected to be playing a critical role in five years' time
% top three
4 in 10 CFOs are developing the "futurist" remit
Long-term strategic planning e.g.…
Core financial capabilities
Understanding of advanced…
Process optimization
Enterprise-wide data analytics
Lateral and innovative thinking
Data modelling and simulation
Change management delivery…
Data governance
Soft skills
43%
33%
32%
31%
30%
29%
29%
27%
27%
19%
Q3. How would you rate your skills and capabilities in each of the following areas? n=508 Q2. What skills and capabilities are your priority for development as your organization moves towards becoming a real-time business? n= 508
CFOs rate themselves highly in terms of "soft" interpersonal skills, which is reflective of shifting attitudes in terms of the
role they play in building relationships across the enterprise. But with cultural management rising up the CFO agenda, there
are warning signs that this is not being given sufficient attention. Developing strategic change management skills is a lower
priority, even though respondents are least likely to rate themselves as "proficient" in this area.
1 - Soft skills e.g. interpersonal (52%)
2 - Core financial capabilities (49%)
3 - Lateral and innovative thinking (48%)
4 - Long-term strategic planning e.g. scenario planning; horizon
scanning (44%)
5= - Understanding of advanced technologies (42%)
5= - Enterprise-wide data analytics (42%)
7 - Process optimization (41%)
8 - Data modelling and simulation (40%)
9 - Change management delivery strategies (39%)
10 - Data governance (38%)
Current skills and capabilities Priority areas for development
% top three% rank 8,9,10 (proficient)
Get the basics right, then focus on tech capabilities
Real-time CFOs are pursuing different skills from their more traditional counterparts. This "leader" group is more likely to
focus on developing technology and analytical capabilities to maximize the value of the data they have access to - and it's
paying off: they are more satisfied across the board with how quickly they can perform tasks.
Long-term strategic planning e.g.scenario planning; horizon scanning
Understanding of advancedtechnologies (e.g. blockchain)
Core �nancial capabilities (e.g. cashmanagement)
Enterprise-wide data analytics
Data modelling and simulation
Data governance
Lateral and innovative thinking
Process optimization (e.g. simpli�cationand standardization)
Change management delivery strategies
Soft skills (e.g. interpersonal)
45%
35%
37%
30%
36%
29%
35%
31%
31%
36%
28%
32%
28%
24%
28%
32%
21%
25%
13%
26%
Real-time leaders
Slow-time followers
Q2. What skills and capabilities are your priority for development as your organization moves towards becoming a real-time business? Real-time leaders: n=98, Slow-time followers: n=91 Q4. How satisfied are you with the speed at which
your organization performs the following tasks?
Priority areas for development Satisfaction with the speed at which organization performs certain tasks
Financial reporting
Moving talent to higher-value tasks
Freeing up cash for growth initiatives
Adjustment of budget forecasts
Adjusting customer-facing
messaging/content
Monitoring and optimizing supply
chain
52%
11%
51%
19%
49%
13%
48%
18%
48%
16%
46%
15%
Real-time leaders
Slow-time followers
% Top three % Very satisfied
Slow-time followers
are more likely to be
focusing on skills that
will deliver short-term
operational changes
2. Front-to-back transformation
Key findings
Real-time firms are more likely to have begun investing in their change
management strategies, highlighting further that this must be an early focus of
a successful transition. This group may well widen their advantage unless the
majority take action imminently.
CFOs are clear that they don't yet have the finance function skills they need
for the future real-time business, but indecision over where the true value lies
must be addressed if finance executives are to deliver a smooth journey
towards machine management.
"CFOs are becoming more involved in the
large transformation programmes within the
company in terms of: How do we simplify the
processes? How do we bring more
accountability within the organization? How
do we drive and improve levels of
performance? And how do we bring more
leadership within the ranks to really drive
the initiatives?"
CFO, global technology/telecoms company
90% of real-time firms are taking steps to change behaviors
Empowering internal teams and making them
accountable for digital change in their part of…
Adding new performance metrics to measure
progress in adopting new ways of working
Establishing cross-enterprise key performance
indicators (KPIs) to avoid conflicting stakehold…
Investment in workshops, employee engagement
and other education and training
Appointing 'champions of change' to pilot new
applications (e.g. new FP&A software) and…
Incentivizing executives to take on unfamiliar
tasks and responsibilities
CEO sponsorship of change management strategy
47%
43%
42%
42%
38%
35%
34%
Total sample Real-time leaders
Q12. To what extent do you agree or disagree with the following statements? Q9. To become a real-time business, what are the most effective ways to change employee behavior? n=508; Real-time leaders: n=98 Q10. To what extent are
each of these initiatives implemented across your enterprise?
Delivering the cultural changes needed to embed new enterprise models and technologies is a major challenge facing CFOs today: 58% say
the CFO is responsible for digital change, yet half admit that their organizations' execution of change management is falling short.
All respondents recognize that empowering teams with new digital leadership approaches will be key, but real-time firms also acknowledge
the importance of executive buy-in. Overall, many risk being left behind by real-time leaders due to implementation "paralysis".
5%
18%
8%
24%
10%
22%
7%
18%
10%
31%
7%
27%
7%
28%
Real-time leaders
Total sample
Will not implement/Will consider implementing in the futureMost effective ways to change employee behavior
% top three
Finance will need skills in innovation, data visualization and data science
Q12. To what extent do you agree or disagree with the following statements? Q11.Thinking ahead to 2025, which finance function skills do you expect will deliver the most value for the business? n=508
Talent development is a major component of any change management strategy, yet the majority of CFOs appear unclear about where the
true value lies across nine key skills areas. The real-time leaders display greater clarity and may offer welcome guidance to the rest: nearly
half (44%) of all respondents say they don't yet have the finance function skillsets that will deliver the most value to the business in 2025.
Analytical skills
Financial modelling
Traditional skills in �nance and accounting
Advanced data visualization
Data science
Commercial acumen
Communication skills/ability to in�uence
Ability to innovate
General management
46%39%
43%37%
37%32%
36%35%
32%35%
29%30%
29%30%
28%33%
22%29%
Real-time leaders
Total sample
Skills expected to deliver the most value in 2025
% top three
Traditional finance
skills are rated sixth
most valuable by the
total sample
3. Agile finance,
competitive future
Key findings
CFOs place great importance on keeping ahead of technology trends, but must
be careful that this focus doesn't come at the expense of other critical areas,
leaving them vulnerable to disruption.
Forecasting issues vary greatly depending on the stage of transition to a real-
time business. The real-time leaders are more likely to be grappling with
people-centric challenges, highlighting the importance of implementing
strategic change management as early as possible.
CFOs are yet to embrace the FP&A advantages from blockchain technology -
those that are doing so have the tools to pull even further ahead.
"The real power of analysis comes when
you're able to connect the financial
perspective with the operational data, and
then present it in a way that business
counterparts are able to understand. We
have created a tool that allows non-finance
executives to slice and dice the costs in
every possible way, so, within five minutes,
they have a greater grasp of costs and know
what questions to ask."
CFO, global technology/telecoms company
40% prioritize tech - is this leaving CFOs open to disruption?
Q5_1. Between now and 2025, what aspects of forecasting do you expect to be: Most important for your organization to conduct? Q5_2. Between now and 2025, what aspects of forecasting do you expect to be: Most difficult for your
organization to assess? Q7. In your mind, what are the principal benefits of agile FP and A systems in your enterprise? n=508
Finance executives cannot afford to overlook the customer and competitor landscape if they are to maintain growth and
accelerate transformation, particularly as these areas are considered to be more difficult to predict. Industry differences
highlight other key aspects that CFOs should turn their attention to or risk facing major obstacles down the line.
Technology evolution
Financing/capital
Customer demand (including demographics)
Payments landscape (e.g., blockchain and…
Business partnerships (product, supply chai…
Talent/skill needs
Product/service lifecycles
Business model lifecycles
Political stability/instability
Competitor landscape (including existing a…
Acquisition candidates
40%
39%
29%
28%
26%
26%
25%
24%
24%
23%
16%
Total
Between now and 2025, which aspects of forecasting do you expect to be the most important?
% top three
And which aspects will be most difficult to predict:
Technology evolution
Financing/capital
Customer demand (including demographics)
Payments landscape (e.g., blockchain and…
Business partnerships (product, supply chai…
Talent/skill needs
Product/service lifecycles
Business model lifecycles
Political stability/instability
Competitor landscape (including existing a…
Acquisition candidates
28%
24%
29%
27%
27%
27%
27%
24%
31%
30%
25%
Total
% top three
Agile FP&A overcomes challenges at all stages of transformation
Q6. What are the biggest challenges you face when compiling accurate forecasts? n=508 Q7. In your mind, what are the principal benefits of agile FP&A systems in your enterprise? Real-time leaders: n=98, Slow-time followers: n=91
Comparing real-time leaders and slow-time followers highlights the forecasting issues that businesses face, depending on where
they are in their real-time transitions. Slow-time firms are more focused on the technical, whereas real-time firms are more
likely to be faced with people challenges: workforce resistance, inconsistent data, difficulty working with the C-suite (although
all are faced with skills shortages). Agile FP&A unlocks key benefits no matter where your business is on its journey.
Creates better quality data
Encourages collaboration across business
functions
Enables modelling and analysis of future
business scenarios
Better strategic decision making
Enhances C-suite collaboration
Responsive cost control across different business
functions
Enhanced ability to measure ROI
Highlights skills shortages
Aids integration of newer technologies
Strengthens recruitment pipeline
Overcomes workforce resistance to new ways of
working
38%
21%
37%
25%
30%
16%
27%
33%
26%
25%
24%
33%
24%
34%
23%
32%
21%
15%
20%
16%
20%
19%
Real-time leaders
Slow-time followers
Principal benefits of agile FP&A systems
% top three % top three
Skills shortages and weak recruitmentpipeline
Workforce resistance to new ways of working
Di�culty of collaborating with C-suite
Cost control across different businessfunctions
Inconsistent or inaccurate enterprise-widedata
Siloed business functions lackcross-collaboration
Di�culty of integrating newer technologies
FP&A systems are in�exible
Inability to model future business scenarios
Inaccessible enterprise-wide data
40%41%
40%32%
38%24%
36%30%
32%23%
32%32%
31%37%
27%32%
21%22%
5%26%
Real-time leaders
Slow-time followers
Biggest challenges of compiling accurate forecasts
4x more real-time firms are "very confident" in blockchain for FP&A
Q19. Which of the following benefits from blockchain technology do you expect your company to have gained by 2025? Q8. On a scale of one to five, how confident are you that the following technologies could have a positive impact on your
FP&A capabilities? n=508; Real-time leaders: n=98, Slow-time followers: n=91
Overall, CFOs are less confident in blockchain for FP&A than in other Businesses 4.0 technologies, and the difference is even
starker when we look only at "very confident". But real-time leaders are far more likely to see the value and be investing
accordingly: 45% expect to have gained more reliable data through blockchain technology by 2025, compared with only 27%
of slow-time followers (see slide 18).
Cloud Advanced analytics Automation AI/Machine learning Internet of Things (IoT) Blockchain
79%
94%
56%
77%
94%
59%
80%
93%
57%
75%
92%
58%
74%
90%
48%
70%
88%
51%
Any confidence Very confident
Total
Real-time leaders
Slow-time followers
4. New horizons:
data and tech
Key findings
A more consistent, holistic approach to data collection is needed across the
different levels. Both people and technology challenges abound, and only a
minority are unlocking the full advantages available.
Access to better data will be key to CFO transformation: it will reduce reliance
on the CTO for future technology requirements and increase confidence in
longer-term decision making.
CFOs must educate themselves on the value of blockchain to drive investment.
Currently, the focus is on security, but real-time leaders see value in a range of
different business areas enabling them to make the case for investment
accordingly.
"A lot of UK finance functions are catching up
with a lack of technology investment; if
you're able to weave blockchain platforms in
at the same time, then it can allow you to
accelerate."
Finance director, global telecoms company
Only 1/3 always seek enterprise data for decision-making
Q15. To support decision-making, how often do you target (i.e. identify and seek to use) specific new data sets among the following levels of data? n=508 Q16. You answered never/rarely/adhoc. What are the main reasons for this?
Enterprise n=332; Ecosystem n=291; Universe n=369
CFOs must invest in the tools and processes to extract maximum value from the different types of data - currently, only a minority
always use each of the levels available to support decision making (ecosystem data emerge as the most popular). Challenges differ
across the levels, but a more consistent, holistic approach is needed to accelerate progress towards transformative business models.
Enterprise data
Always 34.65%
Ad-hoc 48.51%
Rarely 15.84%
Never 0.99%
Enterprise data Ecosystem data Universe data
Data sets are often misleading or of
questionable value
Concern about information security
Lack of skillsets to extract insights
from this data
32%
30%
27%
Enterprise data Ecosystem data Universe data
Main reasons for answering 'never', 'rarely' or 'adhoc'
% top two
Better data will lessen CFO reliance on the CTO
Q18. Based on the knowledge you have today, how confident are you in your ability to forecast investment requirements for new technologies (e.g. blockchain, IoT and other 'edge' technologies, AI) across the enterprise, for the following
timeframes?
Insert headline
Currently, 61% say the CTO/CIO currently takes the lead in identifying technologies needed in more than three years' time.
Access to better data will increase the CFOs' confidence in their ability to predict future technology needs, and better
technology will improve FP&A to deliver long-term planning. Combined, these two elements will accelerate the
transformation of the CFO role.
Within the next 12 months
Between one and three years
Between three and seven years
More than seven years
84%
70%
57%
47%
"Technology decisions must be [made by] a mix
of the CFO and the CTO. We need to engage with
technology teams about our desired alternative
outcomes, and then it becomes a business and
technology dialogue."
Finance director, global telecoms company
Real-time leaders expect blockchain benefits within five years
Q19. Which of the following benefits from blockchain technology do you expect your company to have gained by 2025?
Blockchain technology can help businesses extract insight from the different levels of data, with the majority recognizing
security as the benefit most likely to be gained. Real-time leaders, however, recognize that the value doesn't end there, citing
a multitude of business benefits.
Enhanced IT security
Improved customer relationships
Greater e�ciency in making/receiving payments
More reliable data (providing a single source of the truth)
Lower business costs
Greater transparency in transaction history
Improved traceability/predictability in the supply chain
More mutually bene�cial supplier relationships
46%
41%
47%
39%
39%
40%
38%
41%
35%
38%
45%
27%
38%
32%
44%
37%
43%
32%
37%
47%
40%
35%
34%
34%
Total
Real-time leaders
Slow-time followers
CFOs must build blockchain
knowledge: 61% of the total
sample say understanding
how to integrate blockchain
with other technologies is a
bigger barrier to adoption
than understanding the ROI
yet less than 1/3 are
prioritizing ‘understanding of
technologies for
development’
Executive Sponsors Ashok Pai - VP & Global Head, TCS Cognitive Business Operations
Dave Jordan - Global Head, TCS Consulting & Services Integration
Dinanath Kholkar - VP & Global Head, TCS Analytics & Insights
Kuma Amitesh Pandey - Global Head of Sales, TCS Analytics & Insights
Lakshmi Srinivasan - Global Head, TCS Blockchain
Subhajit Das - Head of Solutions, TCS Blockchain Services
Vikas Gopal - Global Managing Partner, TCS Finance & Shared Services Transformation
Vikas Srivastava - Global Head, TCS Enterprise BPS Solutions and Offerings
Contact To learn more about TCS Business and Technology Services visit info.tcs.com/bts-home
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