Decision Support from Finance – An Unrealized Dream?

A recent PACE survey asked: What percentage of time does your finance staff spend on decision support as opposed to traditional accounting tasks? The answers:

Over 50% 22%

25% to 49% 17%

10% to 24% 44%

Under 10% 17%

Let’s be clear: 78% of the respondents were members of finance staffs that spent less than 49% of their time on decision support….and 61% spent less than 24% of their time providing decision support information and services to their companies. This is certainly not the picture being painted by most accounting professional organizations! But it may reflect reality.

The question I ask is “Why?”. Two basic lines of thought occur as I ponder an answer.

1. Accounting automation and significant process improvement really isn’t happening in many organizations. They remain stuck doing the basic, essential work needed for compliance and basic business operations. A grimmer thought occurs to me as I think along this line: What if automation and process improvement is occurring and accounting staffs are simply being cut to meet cost reduction targets because the CFO can’t think of ways for accounting to create value with improved decision support.

2. The second line of thought reflects the grim view. Are CFOs able to convince their companies that accounting can provide value added, profit increasing, and strategically critical decision support information? Do CFOs know how to shift from basic accounting and financial reporting to business partner?

Reason 2 is the primary reason PACE was created! The Profitability Analytics Framework and Model provides a map and plan to the type of work that must be done in finance staffs to become a strategic business partner. It’s not easy to change, and accounting education and many career paths don’t prepare CFO’s and Controllers to enter the world of strategy and causal, actionable decision support. Furthermore, CEO’s and Boards often don’t know what they need or what to ask for or what to look for to build a finance organization that can provide better decision support. We are working to great greater awareness of the critical need for internal decision support information at all levels of the organization.

If this reflects your struggle, you are looking in the right place now. If I’ve completely missed the mark, please let me know. I’d be thrilled to hear different perspectives on the issue in this survey.