Recent comments from senior financial executives suggest success comes from taking guidance and forecasting into their own hands.
They may be described as three of the most powerful women in business, but don’t think for a minute that the CFOs of some of the world’s biggest companies have it any easier than their peers.
Finance executives from Disney, Microsoft and Cisco were among those gathered for the Fortune Most Powerful Women Summit in early October, and the dialogue that took place showed just how many anxiety those at the top continue to have amid many diverse challenges. As you might expect, those challenges include things like forecasting and reporting:
“When I first came into the job I said, ‘okay, we’re going to finally do away with quarterly guidance,’” said Cisco CFO Kelly Kramer (to which the audience in the room roared with laughter). “But what happens if you can’t control Wall Street is that they create their own alternate universe. The benefit of doing it [providing guidance] is that you can control your own math.”
Of course, Wall Street analysts and investors aren’t the only ones who sometimes seem to be living in an alternate universe. Finance departments have to grapple with the assumptions and misconceptions of other members of the senior leadership team, their counterparts in other departments and so on.
This helps explain why an increasing number of CFOs are focusing their energies on analytics. According to the latest data from CFO Research:
“Among survey respondents, the vast majority have yet to acquire or master the technological tools that will elevate their duties and their companies to new heights,” CFO Research says in its report, The Finance Function’s Readiness for Change. “In the survey, only about one quarter of respondents (26%) say their use of technology is “advanced,” a classification characterized by a focus on advanced data mining and predictive analytics as well as an integration of financial and operational information.
Tellingly, 80% of those surveyed said spreadsheets are everywhere, and while the report suggests that calls for progressing “to an advanced state of using technology within two years,” the reality might be that CFOs have stuck with Excel because they know it can be the first step on their journey to analytics, rather than something they need to leave behind.
If you’re like the world’s biggest CFOs who want to do their own math, you always going to need something to crunch the numbers.
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