Management information and performance: CFOs face new demands for high-quality data that drives decisions

CFOs face new demands for high quality data that drives decisions

Chief financial officers (CFOs) and finance executives need to improve the quality of their organisations’ management information if they are to fulfill the ambition of updating their role and influencing senior decision-makers, according to a survey by CFO Europe Research Services for PricewaterhouseCoopers LLP.

A survey of 193 finance executives at companies with annual revenues of $750 million (£375million) or more set out to establish how finance executives view the quality of the management information they produce, collect and distribute, and how well their organisations use management information to aid decision-making.

Key findings

  1. Management information has become more critical to corporate decision-makers – 70% of the 193 finance executives we polled said their companies' senior managers are paying more or significantly more attention to management information than two years ago.
  2. Our respondents indicated that management information isn't robust enough to support the level of in-depth analysis that their companies’ decision-makers are requesting. This is particularly the case when it comes to nonfinancial information.
  3. Finance executives believe they are not on track to meet their professed goal of spending more time on decision support, and less time on compliance and transaction processing.
  4. CFOs want finance to become a clearinghouse for all financial and nonfinancial management information delivered to senior executives, and they are investing in ERP, data warehouses and other technology to help them do this.
  5. Companies reap big rewards when their management information is robust.

Top-performing companies are more likely to produce management information that incorporates external market information and that allows them to benchmark performance against competitors. Half of the top-performing companies surveyed say their management information includes predictive analysis and commentary, compared with one third of underperforming companies.

Underperforming companies report that their managers are less likely to trust reported data and take decisions less frequently in response to reported trends. These companies typically use spreadsheets as their primary tool for management reporting, rather than solutions such as data warehousing and specialist packages, used by most top-performing companies.

The study demonstrates that although CFOs and their finance functions across different companies vary in their ability to turn information into insight, they are united in their grasp of the importance of financial and nonfinancial information to the business, and their role within it.