CFOs Cling to Excel, ‘Gut’ Instincts

Despite the waterfall of information piling up in corporate databases every business day, a new survey of chief financial officers finds there is actually a “data deficit” when it comes to making decisions based on quick access to that data.

The upshot is lingering reliance on gut instinct in making critical decision that affect profitability and a surprising reliance on aging data access tools like the venerable Excel spreadsheet.

The survey of more than 1,500 financial decision makers sponsored by Epicor Software Corp. found that more than 46 percent of CFOs polled said they rely more on “gut feel” and instinct than empirical data in making key business decisions. That strategy stems from lack of quick access to accurate internal data that could be used to inform strategic decisions, the survey said.

The inability to access forecasting and budget information in a timely fashion has a direct affect on corporate bottom lines, the survey authors assert. Incomplete data and lack of access hampers time-sensitive decision-making, often leading to “organizational mistakes” that can get CFOs fired.

The manufacturing and engineering sectors were found to rely most heavily on legacy IT infrastructure, slowing the organization and delivery of relevant data. Hence, these sectors are seen as relying most on instinct in making decisions that affect profitability.

The survey claimed a direct correlation between a lack of timely financial information and negative affects on corporate profits. It found that CFOs who relying on empirical data for decision making rather than previous business experience helped generate greater profits. Among those surveyed, 72 percent said improved data access had boosted profits. Moreover, nearly half of all CFOs polled said “increasing profits” was their top goal in 2015.

Among the datasets most in demand by CFOs are overall and business unit performance, product performance and profitability, sales and labor costs, sales forecasts and cost of raw materials. Some CFOs are also finding analytics helpful for streamlining audit functions, according to reports.

Despite the explosion of data analytics in nearly every industry sector, the survey found that a surprisingly large percentage of CFOs (60 percent) still rely on Excel spreadsheets as a primary data access tool. Moreover, the percentage of Excel users was consistent across enterprises of all sizes, the survey found. Nearly one-third of executives acknowledged their financial IT systems are due for an upgrade.

Those upgrades include a transition to cloud computing: Nearly half of CFOs surveyed said their companies have either deployed or plan to move financial applications to the cloud. Those apps include accounting, human resources, forecasting and budgeting and business intelligence.

While chief bean counters have been slow to embrace it, 28 percent said big data is likely to have the biggest impact on their business over the next several years. Along with regulatory and compliance concerns, CFO also said they worry about the disruptions wrought by new technologies.

“Digital disruption has introduced more data sources, more channels, more numerous and complex business models, a more global nature of business and more reliance on external partners,” Malcolm Fox, Epicor’s marketing vice president, noted in a statement releasing the survey results.

Still, “Instinct, intuition and even emotion was considered by a significant number of respondents to have a valid role in decision making,” Fox added.

The survey was based on interviews with more than 1,500 CFOs in 11 countries. Respondents worked in the manufacturing, services, retail and distribution sectors.

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