Finance and treasury executives rank the biggest obstacles to producing accurate projections.
More than half of corporate financial officers say their biggest challenge in preparing accurate forecasts is the amount of time it takes to collect appropriate data, according to an Accenture survey of 200 finance, treasury and cash management executives in the United States and the United Kingdom.
After "the time required to collect data," the next two most frequently chosen obstacles to preparing accurate forecasts were "getting agreement on objectives and what needs to be done" (45 percent) and "inadequate data-capture tools" (44 percent).
Similarly, when asked to select from elements of the budgeting and forecasting process the three elements they most want to change or improve over the next 12 months, 58 percent of participants chose "the time it takes to collect data." The next most commonly selected items were "data gathering tools" and "the process by which data is collected"; each of these was cited by 48 percent of respondents.
"While companies are now able to generate more data than ever before -- thanks to advances in technology -- it's just not getting to the right people quickly enough," says Michael Sutcliff, global managing partner in Accenture's finance and performance management service line in Atlanta. "The problem is of particular concern for CFOs, who are increasingly dependent on accurate data to generate financial management strategies that create long-term shareholder value."
Sutcliff believes the survey findings raise the question of whether fundamental processes and tools used to collect and analyze data should be reexamined. "Substantial investments have been thrown at the finance function to facilitate more accurate data capture and improve CFO accountability, yet most companies are not achieving their goals for the finance function," he notes. "Incomplete data, lack of consensus around forecasting objectives and outdated collection tools are not just problems isolated to the finance function anymore -- these are issues that every area of an organization needs to address."