- 79% of respondents in EMEIA (globally- 86%) say they will need to focus on protecting their organization today, while enabling sustainable future growth
- 76% of respondents in EMEIA (globally- 82%) say that they are increasingly seen by key stakeholders as the stewards of long-term value
- 73% of respondents in EMEIA (globally- 77%) believe that by 2025 finance IT will be cloud-native rather than on-premise
New Delhi, 26 November 2020: The chief financial officer (CFO) will emerge as one of the C-suite’s most critical roles in reframing the future of the enterprise post the COVID-19 pandemic and beyond, according to the 2020 EY DNA of the CFO, a survey of more than 800 global CFOs and senior finance executives, of which 40% were from EMEIA (Europe, Middle East, India and Africa).
Describing their future priorities, 79% respondents in EMEIA (globally- 86%) say they will be required to protect their organization today, while enabling future growth. At the same time, 79% respondents (globally - 84%) agree that achieving a balance between short-term results and creating long-term value will become a priority. This will also include traditional mandates, such as corporate reporting, along with new ones like overseeing digital transformation.
As they deliver on these priorities, CFOs will also need to enhance relationships with their fellow C-suite peers. The survey, however, found 50% of responding finance leaders in EMEIA (globally - 52%) reported limited or no collaboration with the chief human resources officer (CHRO) with 42% respondents (globally - 44%) saying the same of their relationship with the chief marketing officer (CMO).
Sandip Khetan, National Leader and Partner, Financial Accounting Advisory Services (FAAS), EY India says, “The pandemic has highlighted the importance of driving bold, cohesive and innovative strategies to accelerate the digitization of finance. CFOs need to look at the finance of the future – integrating financial and non-financial aspects. This is key to long-term value creation by building a connection between the tangible and intangible assets.”
Nikhil Sharma, Partner and Finance Leader, Business Consulting, EY India added, “Digital adoption in the CFO’s office has been accelerating in India and will continue to do so at an exponential rate in the post-COVID era. Going forward, CFOs should look to reframe the finance function by harnessing new and emerging technologies such as intelligent automation, and thereby, creating value rather than cutting costs, and more importantly, embracing a superfluid structure that can adapt effortlessly to technological shifts in the market.”
CFOs as stewards of long-term value
In a shift mirroring market trends in 2020, CFOs recognize the importance of a purpose-driven strategy, with 76% of respondents in EMEIA (globally- 82%) saying that they are increasingly seen by key stakeholders as the stewards of long-term value.
In addition, 78% of respondents in EMEIA (globally- 79%) say that investors are increasingly requiring much more information on how their organization creates long-term value for all stakeholders, while 75% in EMEIA (globally- 81%) believe there is significant value for their organization that is not measured or communicated using financial KPIs.
Reframing the finance function
The performance of markets is fundamentally changing. New virtual markets are emerging as platform-based giants connect buyers and sellers in a more seamless way, and new technologies converge to eliminate even more inefficiencies and frictions.
A more fluid operating model that extends beyond the enterprise’s four walls will likely be a key factor in enabling finance to play a central role in the connected markets of the future. Many finance leaders see this more open future for the function becoming reality over the next five years. More than three-quarters (EMEIA -73%, globally- 77%) of respondents believe that, by 2025, finance IT will be cloud-native rather than on-premise, and 71% respondents in EMEIA (globally- 74%) believe the function will be part of a blockchain-based ecosystem.
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About the survey
The 2020 EY DNA of the CFO Will CFOs evolve finance or become obsolete? surveyed more than 800 CFOs, financial directors (FDs) and senior finance executives of large organizations to understand the challenges faced by the CFO. The research was conducted by Longitude on behalf of EY Global Financial Accounting Advisory Services (FAAS). More than two-thirds (69%) of respondents’ organizations have revenues between US$1b and US$4.99b a year and almost one-third (30%) of respondents’ organizations have global revenues in excess of US$5b a year. More than a quarter (34%) of respondents were either Group CFO or Group FD. The remaining 73% were CFOs, FDs or heads of finance (group, divisional or regional). Respondents were split across the Americas; Asia-Pacific; Europe, the Middle East, India and Africa (EMEIA); and Japan. Thirteen main sectors were represented, with 38% publicly held or listed, 52% privately owned and 10% not disclosed.