Growth and competitive advantage are being damaged by a lack of alignment between finance and operations teams, a KPMG International survey of 1,300 business leaders has revealed.
The research for KPMG’s Value of Connection report uncovers that just over a third of the senior executives questioned are “very satisfied” with the alignment between finance and operations.
Just 38 percent of senior executives within the two functions are “very satisfied” with the alignment of objectives and key performance indicators (KPIs) across the two teams.
Less than half of the finance and operations leaders surveyed said key business processes are fully connected across their functions, and only 41 percent are very satisfied with the ability of the IT systems of separate functions to interact.
Less than half of finance and operations leaders are “very satisfied” with their use of data for key business processes, with just 42 percent being “very satisfied” with their ability to make informed decisions based on data.
85 percent of finance and operations leaders want to play a greater role in driving enterprise-wide transformation in the next three years.
98 percent of finance and operations leaders are seeking to obtain new skillsets for their function; however, seven in 10 only think about the needs of their own function when obtaining new skills.
The vast majority of leaders (97 percent) plan to invest in at least one new technology during the next 18 months; however, 74 percent do not coordinate with other business functions when acquiring and implementing new technology.
This disconnect highlights an important challenge for business leaders as unconnected processes, siloed systems, differing priorities and disagreements over responsibilities cause divisions between the two functions, which can impact overall company performance and informed decision-making.
The wide-ranging report also finds that collaboration is vital to overcome these challenges, with successful companies helping to bridge the gap through data sharing, integrated technology, internal efficiencies, and the creation of seamless customer experiences.
Meanwhile, those that fail to align the two functions may risk sub-optimal decision-making, inefficient resource allocation, missed opportunities and weakened customer experiences.
Our research reveals that operations and finance leaders are aware of the importance of teams working together, but they’re also fully conscious that right now there is a big disconnect. A lack of clarity of ownership of key processes as well as a lack of collaboration, data sharing and technology integration appear to be the most significant issues holding back progress.
Partner, Global Operations Center of Excellence Lead , KPMG Australia
Findings from the survey also indicate that six in 10 of the leaders are unclear on their specific roles and responsibilities today in relation to environmental, social and governance (ESG) risks and initiatives, despite 85 percent saying that ESG will be an area of focus for their businesses.
Furthermore, the report finds that the majority of finance and operations leaders currently lack confidence in their ability to leverage new technology, draw insights from data, and obtain the skillsets they will need for the future. As a result, improving and reinventing their functions’ operating model is considered a top priority.
Embracing new ways of working and adopting a coordinated approach to upgrading skillsets, data and technology, in addition to integrating business planning, could prove mutually beneficial in identifying overlaps in future requirements and helping to define and improve their operating models.
Ultimately, collaboration, establishing strong lines of communication and common purpose between the teams and their leaders can enable them to grasp the importance and potential benefits of any new operational initiatives, allowing them to drive faster and more impactful change across the business.
Global Finance Center of Excellence Lead , KPMG International