CFOs' poor visibility of key financial information is undermining confidence in their departmental and company performance, and ultimately leaving doubts about profitability. That's the conclusion of The Cost of Control 2010, the second annual global study and independent report released today by Basware, a purchase-to-pay solutions provider.
Constrained by this limited visibility, businesses are struggling to make informed decisions and effectively forecast and manage costs.
The Cost of Control 2010 provides insights into the opinions and priorities of 550 CFOs and finance executives worldwide. Compared with research from The Cost of Control 2009, the new report uncovers the key trends of finance and procurement departments over an economically turbulent 12-month period. Additionally, the new study identifies the levels of - and reasons for - confidence among senior finance professionals. The report was prepared in collaboration with professors Steve Jones and Mark Frohlich from the Indiana University Kelley School of Business, and Markus Maedler and Adrian Done of Barcelona's IESE Business School.
According to the new study, just 50 percent of finance executives state a high level of confidence in the performance of their departments and only 44 percent maintain this level of confidence when considering the company's performance overall. Confidence in the regional economy drops to just 19 percent, and to 9 percent for the world economy. Successful collaboration between Finance and Procurement is most strongly linked to confidence in company performance, although 40 percent believe the relationship between Finance and Procurement could be improved. By working together, these often isolated departments can share responsibility for both cost and risk reduction when it comes to reducing expenditures, cutting transaction costs, mitigating potential liabilities and identifying ways to improve the bottom line.
