The Top 5 Questions CFOs Should Ask Themselves in 2022

CFOs will face evolving demands in the coming year, and they’ll need to navigate a variety of considerations in order to grow their team’s capabilities and remain agile.

For example, the rate of innovation in enterprise resource planning (ERP) is accelerating to meet the demands of an increasingly complex world. That means finance leaders will need to think about issues such as how to wrangle the deluge of data from disparate sources, and how to consolidate their financial management systems to create valuable insights and organizational value.

Regardless of what the future holds, it’s a near certainty that finance teams will require expanded capabilities and greater integration—including extended planning and analysis (xP&A), artificial intelligence (AI), and machine learning (ML), to name a few—in order to thrive well into the future. While CFOs recognize the need for more robust tools, organizations are in the early stages of deploying the technology to realize those goals.

A Gartner report, "Predicts 2022: The Office of Finance Is Consolidating Applications to the ERP Suite," addressed some of the emerging trends that CFOs should be aware of in order to achieve the full benefits of digital transformation. Here are the top five questions they should keep in mind at the start of 2022.

Can my financial management system really save my team time and resources—freeing them up to drive value for the business? 

The right technology, skills, and data infrastructure can help organizations unlock value—a benefit more leaders are recognizing and acting upon to maintain and sharpen their competitive advantage. 

The Gartner “Predicts 2022” report highlights a couple of key trends:

• By 2024, 60% of organizations will select integrated financial management capabilities as their preferred approach to process automation.
• By 2024, 30% of organizations will implement and successfully utilize AI within their financial management solutions.

Is my organization agile enough to stay ahead of the continued pace of change and uncertainty?

Choosing a partner, not a vendor, is key to enabling digital transformation. The digital transformation journey requires more than a one-and-done approach, and a collaborative relationship is invaluable to ensuring success. 

• Workday has been recognized in the 2021 Gartner Peer Insights "Voice of the Customer" for Cloud Core Financial Management Suites for Midsize, Large, and Global Enterprises.
• “Workday Financial Management was a very obvious choice for our finance department as our in-house HR department already has a relationship with the vendor. This really helped encourage our Finance department to adopt the use of this tool, as we already had some in-house experience with the vendor in terms of ongoing support, innovation and features as well as training,” wrote a data analyst in the healthcare industry.
• According to a Gartner Market share report, Workday had the largest market share in 2020 for ERP Worldwide SaaS Revenue at 18.7%.

ERP Total Worldwide SaaS Revenue Market Share, 2019-2020 (Millions of U.S. Dollars):

Do I have the technology capabilities I need to close the financial plan-to-execute loop? 

More doesn’t necessarily mean better. Digital acceleration can benefit organizations by consolidating large amounts of disparate data into one system in order to create actionable insights for executive leadership and continuously plan for various future scenarios.

Neil Gribben, vice president of accounting and control at hospitality and leisure company Belmond, has said that bringing together its 15 separate accounting systems globally into a single repository helped it extract the data it needed in a timely, efficient, and smart manner. 

“This approach to continuous planning quadruples the ability to get data out of Workday and maximises the capabilities of the product,” he said. “Suddenly, all of the planning, future scenarios, and agility become powerful and meaningful.” 

Gartner highlights a clear trend in its “Predicts 2022” report:

• By 2024, 50% of all new financial planning and analysis (FP&A) implementations, upgrades, and replacements will be sourced from core financials vendors due to their superior integration and product bundling. 
• By 2024, 60% of organizations will select integrated financial management capabilities as their preferred approach to process automation. 

How can my finance team make better decisions faster with reliable, accessible data at all levels? 

The answer is multifaceted. In a Harvard Business Review Survey of 162 financial management professionals, 88% say fostering a data-driven culture in finance will be critical to future performance. Executives responding to the survey say their top three challenges brought on by this rapid data proliferation include accurately preparing, reconciling, accessing, and formatting high volumes of information (68%); integrating recent or real-time data into analyses (55%); and analyzing data and forming and communicating recommendations (52%). 

How can I create a more effective framework for measuring and predicting business performance?

The Gartner “Predicts 2022” report found that a finance-first approach to ERP helps provide a core set of financial measurements for a wide variety of stakeholders to rally around, as well as measure progress continuously throughout the transformation journey. A finance-first approach also provides the added potential of close coordination for quick action—a benefit in a pandemic-influenced climate of uncertainty that requires organizational agility perhaps more than ever—and faster feedback on those efforts.

Coordinating essential financial data will also be necessary to measure and predict business performance with greater speed, frequency, and accuracy.

• “Enterprise-wide collaboration with IT will be critical for application leaders to understand the information required to design an improved measurement capability.” (From “Deliver Finance First to Transform ERP with Purpose.”)
• Continuous finance first ERP modernization (see diagram below):

Given the challenges on the horizon, CFOs need a clear vision of emerging trends that will affect their organizations, as well as how to equip their finance teams with the technology they’ll need to remain agile and thrive in a changing world.

_{Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.}

_Sources:

_{Gartner, Deliver Finance First to Transform ERP With Purpose, Dixie John, John Van Decker, January 27, 2021}

_{Gartner Peer Insights ‘Voice of the Customer’: Cloud Core Financial Management Suites for Midsize, Large and Global Enterprises, By Peer Contributors, October 27, 2021}

_{Gartner® Market Share: Enterprise Application Software as a Service, Worldwide, 2020, Neha Gupta, Yanna Dharmasthira, Chris Pang, Craig Roth, Jim Hare, Alys Woodward, Julian Poulter, John Kostoulas, Balaji Abbabatulla, Eric Hunter, Kevin Quinn, Satyam, Supradip Baul, Amarendra, 30 April, 2021}

_{Predicts 2022: The Office of Finance Is Consolidating Applications to the ERP Suite, John Van Decker, Robert Anderson, Greg Leiter, November 12, 2021}