Finance Execs Turning to Cloud, Non-Financial Big Data and Enterprise Performance Management to Support Strategic Initiatives
Today’s finance professionals are optimistic about their companies’ performance and view themselves as strategic partners to the business with responsibilities that go beyond traditional finance and accounting roles. However, they are keenly aware of the organizational and technology barriers to success. These findings, along with other insights into the finance function, come from a recent survey of more than 250 senior level finance and accounting professionals commissioned by Host Analytics and conducted by Radius Global Market Research. The study set out to better understand the role that finance departments play in today’s organizations and uncovered perceptions and trends about the role of finance and technology in businesses today.
Perception and Reality: The Role of Finance in The Organization
According to the survey, 74 percent of finance professionals describe their relationship with other operational roles throughout the organization as “extremely good,” or “very good.” And when it comes to finance’s role, when asked “which of the following best describes the primary mission of the finance department at your company?” respondents answered:
- Work with investors to maximize company value: 25%
- Produce timely and accurate financial records: 22%
- Ensure the correct allocation of resources: 19%
- Be a strategic partner to the business: 17%
- Drive operational excellence through the company: 12%
- Ensure compliance with laws and regulations: 5%
While the majority of finance professionals report strong relationships throughout the organization and eight out of 10 report a positive outlook on the year, there are technology and cultural influences that impact the finance team’s ability to achieve their mission.
From a technology perspective, 50 percent of respondents cited a lack of systems and tools and 48 percent cited difficulty in accessing the necessary data or reports. The non-technology related factors cited by respondents were: “lack of time,” “the organization does not value input from finance,” and “high staff turnover.”
Spreadsheets Still Hanging On; Big Data, EPM, and Cloud Rising
Technology continues to play a bigger role in the finance department with the continued, widespread use of spreadsheets and the rise of Big Data, enterprise performance management (EPM) solutions, and the adoption of cloud-based platforms.
Spreadsheets remain ubiquitous in finance departments with 43 percent of respondents
reporting that Microsoft Excel plays a significant role. Today, Excel is also being used as an integral part of their strategic financial processes, with a full 57 percent of survey respondents using it to meet EPM requirements in planning/budgeting, financial reporting/disclosure, and analytics, either on a standalone basis or in conjunction with other tools.
Based on the survey insight, cloud-based EPM interest and adoption continues to grow as 41 percent of respondents currently have a cloud-based EPM solution, 29 percent are evaluating them, 23 percent plan to move to the cloud in the next few years, five percent are planning to move to the cloud in the next two to three years, and only two percent reportedly have no intentions to move to the cloud. But that doesn’t mean the use of Excel will end anytime soon, with 46 percent saying it will continue to play a role in their EPM processes in the next three to five years.
According to the survey, the two biggest concerns in moving to a cloud-based EPM are performance and security. However, businesses are getting used to the idea with 88 percent citing they are more comfortable today with it than they were two to three years ago.
Along with moving to the cloud, finance professionals are also turning to non-financial Big Data from sales, marketing, and the supply chain to help with the planning process. When asked, “In what timeframe does your company plan to use Big Data or non-financial data in the planning or reporting process?” 28 percent reported they currently use it, and 71 percent plan to use it over the next one to three years.
This research was completed by over 250 executives in the accounting and finance field, randomly recruited by Radius Research from a large pool representative of the market. 40 percent of the executives surveyed for the study were C-level, with 35 percent being directors, and 26 percent being vice presidents and/or controllers. Participants came from a wide range of industries including services, manufacturing, retail, software developers/vendors, healthcare, non-profit, and education with 19 percent of the respondents working at companies with $1 billion or more of revenue.
“When you do technology market research studies, you start to see how interconnected things are within companies,” said Michael Patterson, senior vice president at Radius Research. “If a department sees their focus different from others within their same organization, it’s important to drill down and investigate that discrepancy, and it’s often related to technology that would empower a team to do more things more efficiently.”
“While spreadsheets continue to play a significant role, it’s clear that finance professionals are looking to other resources to gain the much-needed process efficiency and insight into performance across the company,” said John O’Rourke, vice president of product marketing for Host Analytics. “With a cloud-based EPM platform, companies can handle the heavy lifting of collecting and processing budgets and forecast data on the back-end, while letting the users continue to use spreadsheets on the front-end for reporting, analysis and data entry. This, in turn, reduces the level of manual work, and chance for errors, and allows finance to shift more time to value-added analysis and being a strategic business partner to the organization.”
Nvidia forecasts sales above estimates as gaming chip sales surge
By Chavi Mehta and Stephen Nellis
(Reuters) – Nvidia Corp forecast better-than-expected fiscal first-quarter revenue on Wednesday, expecting strong demand for its graphics chips used in gaming PCs and artificial intelligence chips for data centers.
As people wait for COVID-19 vaccine rollouts around the world, stay-at-home orders have helped sustain the demand for chips used in personal computers, gaming devices and data center infrastructure that enables remote working.
The Santa Clara, California-based company’s gaming chips have also regained popularity for mining cryptocurrency, a trend Nvidia is trying to counter by throttling its gaming chips ability to mine for currencies and instead offering specialty chips for mining.
While Nvidia was long known for its gaming graphic chips, its aggressive push into artificial intelligence chips that handle tasks such as speech and image recognition in data centers has helped it become the most valuable semiconductor maker by market capitalization.
It has eclipsed rivals Intel Corp and Advanced Micro Devices.
Shares were up 3% at $597.50 in extended trading after the results.
On a conference call with investors, Chief Financial Officer Colette Kress said that a global chip crunch made it hard to keep the company’s flagship gaming chips introduced last fall in stock and that the chips would likely remain in tight supply through the fiscal first quarter.
The company also said it will make a change to its gaming chips starting with the RTX-3060s to make them less efficient for mining cryptocurrency. The company said it will instead introduce mining-specific chips.
“We would like GeForce GPUs (graphics processing units) to end up with gamers,” Kress said.
Kress said analysts have estimated that cryptocurrency mining contributed between $100 million and $300 million to Nvidia’s sales in the fiscal fourth quarter. The company expects the new mining chips to generate about $50 million revenue in its fiscal first quarter, Kress added.
The company expects first-quarter revenue of $5.30 billion, plus or minus 2%, above analysts’ average estimate of $4.51 billion.
Revenue in the quarter ended on Jan. 31 rose to $5 billion from $3.11 billion a year earlier. Analysts on average were expecting $4.82 billion, according to IBES data from Refinitiv.
Revenue in the company’s gaming segment was $2.5 billion, above analyst estimates of $2.36 billion, according to data from FactSet. Data center revenue was $1.9 billion, above estimates of $1.84 billion according to FactSet data.
(Reporting by Chavi Mehta in Bengaluru and Stephen Nellis in San Francisco; Editing by Maju Samuel and Will Dunham)
Running boom to help Puma recover after slow start
By Emma Thomasson
BERLIN (Reuters) – German sportswear company Puma expects the financial impact from coronavirus lockdowns to last well into the second quarter, but believes global growth in running should help to support a strong improvement after that.
“We clearly see a running boom in the whole world,” Chief Executive Bjorn Gulden told journalists, noting that yoga and other outdoor activities are also doing well. He expects the healthy living trend to continue even after the pandemic.
Gulden said his optimism is underlined by the fact that orders for 2021 are up almost 30% compared to a year ago, with bookings for running products particularly high.
However, there is still uncertainty about when lockdowns in Europe will end, with about half of the stores selling its products currently closed in its home region.
For the full year, Puma expects at least a moderate increase in sales in constant currency, with an upside potential, and a significant improvement for both its operating and net profit compared with 2020.
Shares in Puma were down 2.9% at 1100 GMT.
“The wording on outlook looks softer than we had anticipated, even by Puma’s cautious standards,” said Jefferies analyst James Grzinic.
Gulden noted that a shortage of shipping containers bringing products made in Asia would impact margins, with freight rates likely to double in the next 12 months.
Puma will put a stronger focus on the women’s market in future, Gulden said, creating shoes better modelled to female feet for running and soccer and capitalising on partnerships with celebrities like singer Dua Lipa and model Cara Delevingne.
Gulden admitted Puma had been slow in creating its own app, but it plans to launch one towards the end of the year, further supporting online sales, which grew by 63% in 2020.
Rival Nike in December raised its full-year sales forecast after demand for outdoor sportswear drove an 84% surge in online sales.
Gulden said he is hopeful that the Olympics will go ahead in Japan and the European soccer championship will also take place after both were postponed from 2020.
($1 = 0.8226 euros)
(Reporting by Emma Thomasson; Editing by Mark Potter and Keith Weir)
ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion
(Reuters) – Exxon Mobil Corp said on Wednesday it would sell its non-operating interest in its UK and North Sea exploration and production assets to private-equity fund HitecVision for more than $1 billion.
Exxon has been looking to sell its oil and gas assets since late 2019, seeking to free up cash to focus on a handful of mega-projects.
The deal includes ownership interests in 14 producing fields operated primarily by Shell as well as interests in the associated infrastructure. Exxon could also receive about $300 million in contingent payments based on a potential for increase in commodity prices.
Exxon’s share of production from these fields was about 38,000 barrels of oil equivalent per day in 2019, the company said.
Exxon said it would retain its non-operated share in upstream assets in the southern part of the North Sea as well as its interest in the Shell Esso gas and liquids (SEGAL) infrastructure, which supplies ethane to the company’s Fife ethylene plant.
HitecVision, in partnership with Eni, had bought Exxon’s Norwegian North Sea assets for $4.5 billion in 2019.
Initially, Exxon hoped to raise more than $2 billion from the sale, which was planned for late 2019. In June 2020 sources told Reuters that the portfolio was more likely to fetch $1 to $1.5 billion given the oil price weakness last year.
(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva)
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