According to the 4th edition of the CFO survey by Deloitte Luxembourg, around half of the Luxembourg companies surveyed in 2015 acknowledged the crucial role of the CFO as finance business partner.
At the same time, reporting lines between finance and the business units were found to not be easily defined. 80% of the responding finance functions have communication structures in place to learn about business needs and expectations.
The survey, conducted between April and June 2015, reported that the majority of Luxembourg respondents were aware of what they would like to achieve whilst facing significant barriers in how to make it a reality, citing lack of time and effort, poor data quality, different spreadsheets and other process inefficiences as key barriers to realising these goals.
"One priority is improving the quality and availability of data and key business information, as well as identifying value drivers and key performance indicators to better focus on strategic goals," explained Petra Hazenberg, Partner Strategy, Regulatory and Corporate Finance at Deloitte Luxembourg. "Over half of the CFOs surveyed intend to increase the quality and availability of financial data and relevant business information. At the same time, only 40% of our survey respondents believe they have sufficent resources to dedicate the appropriate time to business partnering.
The 2015 survey examined the opinions of Luxembourg CFOs of both financial and non-financial companies employing over 50 staff to analyse the role of the finance function as business partner to the companies' respective business units.
Deloitte stated that finance function in Luxembourg companies would continue to develop in the long-term, with half of the Luxembourg-based companies holding a clear and well-understood business partner role within their finance function. 40& of respondents also reported having a finance vision in place for the development of the finance function.
The study found however that 22% of respondents were unconvinced as to the clear definition of reporting lines between the finance functions and business units, indicating that there remains room for improvement in the maturinty of the CFOs business partner role in the Grand Duchy.
Progress was also found to be still be required in terms of data archiving, with 83% of respondents admitting that management reporting is not delivered from one single data model and therefore often leads to a significant manual effort to produce accurate management reporting.
Hazenberg continued: "Accurate reporting on financial results is a crucial prerequisite for CFOs to proactively function as business partners and guide business units. Strategic decisions must be based on reliable financial data. Apart from internal challenges, CFOs also have to face recurrent external challenges, such as the pursuit of efficiency and the related thrive for cost reduction to remain competitive. As of today little more than half of the CFOs surveyed are closely involved in every long-term decision-making process."
According to Deloitte, CFOs needed to provide short-term decision support in terms of management reporting, product and profitability analysis as only 22% of those asked reported that finance function has access to real-time information to quickly respond to business inquiries.
"The core responsibilities of a CFO in Luxembourg are the following: identify the most suitable people to solve frequently arising problems, to develop a common understanding of these recurrent challenges, and to establish a work environment that will foster creative collaboration and ensure appropriate and timely reporting," was the conclusion of Partner Strategy, Regulatory and Corporate Finance, Pierre Masset, who continued: "This will guarantee that CFOs will be able to continuously play their role as crucial business partners to their business units".
