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Monday, 22nd April 2024
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CFOs in the dark about ERP Back  
Irish chief financial officers show a surprising lack of understanding about the possible benefits of enterprise resource planning (ERP) systems, budgeting/reporting tools and eBusiness, according to a study carried out by Deloitte & Touche.

Deloitte & Touche Management Consultants recently undertook a survey of the attitudes of cfos in almost 100 Irish companies, from a variety of industry sectors. While the responses were, in the main, encouraging, they also show plenty of scope for improvement, particularly in the application of advanced financial management concepts.

A total of 54 per cent of respondents said that they did not understand the concept of ERP systems, 31 per cent said that they did not understand budgeting/reporting tools and 39 per cent stated that they had no real understanding of eBusiness. Nearly half of the respondents to the survey did not see a clear link between budgets and strategies/annual plans, while 44 per cent stated that their financial processes (e.g. accounts payable, accounts receivable, payroll etc) were inefficient.

Over a third of respondents to the survey were not satisfied with their financial systems, while a surprisingly large number did not understand concepts such as activity-based costing, financial process redesign, value-based management and balanced scorecards.

However, almost two-thirds of respondents expressed satisfaction with their financial systems. Of those who expressed dissatisfaction, the reasons included lack of customisation and integration, poor reporting
functionality and lack of training and support.

Commenting on the survey, John Pittock of Deloitte & Touche Management Consultants said a common theme running through it was the considerable scope available to improve the efficiency and effectiveness of financial processes. ‘Chief financial officers should consider a closer examination of their financial processes, not only to identify cost and efficiency savings, but also to free up more time for the type of value-added analysis which will enhance the competitive position of their organisation.’ Mr Pittock added that despite the fact that respondents to the survey expressed a view that the finance function added value, there was still a very large proportion of time spent on transaction processing. This was consistent with one of the key challenges identified by respondents, mainly the need for greater automation of routine finance activities, which could free up more time for value-added analysis.

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