4 minute read 28 Feb 2017
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What finance leaders need to make reporting more responsive

Peter Wollmert
By Peter Wollmert

EY EMEIA Assurance Leader

Senior Assurance leader. Promoting quality and effectiveness in corporate reporting and the audit. Advocate for the future of the accounting profession. Passionate runner and scuba diver.

4 minute read 28 Feb 2017
Related topics Assurance Financial accounting advisory services Accounting change
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Innovative technologies and modernized operating models can help reporting keep pace with a fast-moving world

In today’s fast-moving world of corporate reporting, speed of reaction is everything. Not only is the volume of data increasing, but also the velocity. Reporting teams are expected to deliver – to tight deadlines – data-driven, forward-looking insight, of the highest quality and accuracy.

For many organizations, agility and speed of reporting response are a challenge. Fragmented technology makes it hard to collect and analyze large data sets, while cumbersome reporting processes result in slow reaction times.

The impact of fast-changing technology is emphasized in EY’s research, How can reporting catch up with an accelerating world?, which collected the views of 1,000 CFOs or financial controllers of large organizations. When we asked respondents to describe the major external challenges to corporate reporting, they identified “changes to technology” as the number one issue faced.

Thirty percent of respondents suggested that technological change was a concern, compared with 25% who identified market developments, 23% who mentioned regulatory issues and 23% who highlighted the need to satisfy national and international guidance and standards.

Complex environment

Reporting teams are no longer just seen as the stewards of reporting data – they are expected to analyze detailed information and extract insight from large, fast-changing and wide-ranging data sets. At the same time, finance staff must protect and secure that data, as the regulatory and reputational cost of a breach is a significant risk.

Finance leaders face an increasingly complex environment, and they need to prepare themselves for what the future holds. All firms are struggling with increasing automation, the advent of smart, connected devices and the need to use new technologies and harmonize systems. CFOs must get better prepared for Industry 4.0 and the disruption this involves.

When we look at the specific challenges that organizations face, we find teams struggling with IT systems that do not talk to each other, a lack of automation and a proliferation of technologies. Partly, this is due to increased reporting requirements, as firms introduce manual work-arounds to deal with the latest regulatory demands.

Leaders must take a strategic look at the talent they need to drive reporting agility and extract value from technology

Upgrading IT and financial data analytics tools is the standout priority in corporate reporting, according to our survey. This was identified as a factor by 41% of respondents, outweighing the need to drive further efficiencies (33%) and the requirement to meet increasing demands for smarter and faster information (31%).

The importance placed on systems and data tools is reflected in investment intentions, with 84% of organizations worldwide expected to increase expenditure in reporting technologies over the next two years. Agile technologies will be a focus area. The cloud, in particular, allows organizations to respond more quickly and smartly to technology requirements and changing business needs. But there are also intelligent data capturing, artificial intelligence and blockchain to consider.

Skills at a premium

As traditional reporting back-office tasks are automated, the need for large numbers of full-time employees in these roles will disappear. Robots will be increasingly used in the next generation of reporting back offices, allowing reporting professionals to focus on other tasks, such as providing predictive analytics and managing stakeholder relationships.

Reporting leaders have to find people with the skills capable of mastering the new technologies that are driving reporting innovation. But, as our survey shows, technology- and data-related skills are at a premium. IT infrastructure skills is the most in-demand requirement (36%), followed by financial data analytics (33%) and business analysis (27%).

To address this issue, leaders must take a strategic look at the talent they need to drive reporting agility and extract value from technology. This means striking a balance between bringing in fresh blood from outside and developing existing team members.

Finance leaders also have a wider opportunity to examine how reporting is delivered. CFOs have been transforming the finance function’s operating model for many years through arrangements such as shared services and outsourcing for transactional processes. Today, however, organizations are looking to increase the functional scope of these arrangements by including corporate reporting.

Over the next two years, for example, 55% of finance leaders around the world intend to make a significant or very significant increase in outsourcing to support reporting. Group CFOs are particularly bullish and expect to see more outsourcing (67%), managed services (63%), shared service centers based onshore or nearshore (61%), and centralized centers of excellence (58%). 

Operating model transformation provides an opportunity to eliminate redundant processes, streamline critical tasks, achieve global consistency and automate more activities. It should create a more agile and flexible reporting function. 

It is clear that corporate reporting will look very different in the future. It will be smarter, highly automated, more streamlined and increasingly forward-looking. By focusing on innovative technologies and a more flexible and nimble operating model, CFOs can design and deliver the responsive reporting capability required for a world that will continue to accelerate.

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The views of third parties set out in this article are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.

Summary

EY’s Peter Wollmert discusses the findings from the organization’s global survey of finance leaders and explains how innovative technologies and modernized operating models can deliver a new age of responsive reporting.

About this article

Peter Wollmert
By Peter Wollmert

EY EMEIA Assurance Leader

Senior Assurance leader. Promoting quality and effectiveness in corporate reporting and the audit. Advocate for the future of the accounting profession. Passionate runner and scuba diver.

Related topics Assurance Financial accounting advisory services Accounting change
Upvote