DataRails, an FP&A solution for Excel users that recently closed a $50 million Series B funding round, has released new data from a survey of 200 CFOs, which reveals the extent of the manual work problem for the average executive in that role.
Many feel that the extent to which they’re involved with manual data crunching prevents them from doing their jobs to the best of their ability, which often has severe knock-on effects on their personal lives. DataRails carried out the survey because they wanted to better understand the scale of the problem and how their industry-leading software might be able to help.
The CFO role has become increasingly important in recent years, especially given the economic uncertainties caused by global events such as the coronavirus pandemic, the ongoing supply chain crisis and the Russia-Ukraine war. FP&A teams have needed to adjust their financial forecasts to react to the seemingly never ending series of external shocks, and many CFOs have found they’ve been underprepared for this.
Amid these changes, some CFOs have become mired in manual work rather than being able to conduct the analysis that would enable them to drive strategic decision-making at their companies. If you wish to download the full report, you can do so here.
The CFO’s Struggles
Worryingly, 81% of CFOs believe they have the most intensive daily manual work of anyone in the C-suite. One might expect there to be almost no manual work for someone in the C-suite, because their position means the value of their time is the highest of anyone in their department.
Participants in the survey were open about the negative effects they think their manual workloads have on their performance. Some 47% agree that manual work impaired their ability to participate in strategic decision-making, and this contributed to 37% of CFOs being dissatisfied with their overall output as CFO. It’s shocking for so many CFOs to believe their time is being used so inefficiently.
This seems like an obvious area for improvement, but many CFOs are stuck using outdated processes in the short term. An eye-opening 92% of CFOs are frustrated with the annual budgeting process, for instance, which often takes up to three months. In today’s business landscape, the duration of that process means that a company’s budget is often out of date by the time it’s finished.
These factors are contributing to greater burnout amongst CFOs, and it takes its toll on the personal lives of many of those surveyed. Nearly half (48%) believe they have less time with family and friends because of the amount of work expected of them. The DataRails survey shows that the status quo is not sustainable.
Excel as a Key Bottleneck
Excel is the primary software solution used by the overwhelming majority of CFOs, with 70% sharing that they rely on the spreadsheet app for financial budgeting and forecasting. Yet despite this, only 18% of CFOs consider themselves Excel experts. The relative strength of a CFO’s Excel skills can have a direct impact on how much they are able to automate, and as a result, how much manual work they must do.
CFOs should be influencing the key decisions of a company, so it’s unsurprising that 31% admit their spreadsheet work leaves them feeling bored. It seems out of place in 2022 that the biggest challenge for 41% of CFOs is still identifying and correcting errors in spreadsheets. However, when reports are created manually, there will always be the risk of human error.
Overall, the survey found that around 10 hours of skilled finance talent is spent on spreadsheet work per week. This is spread across budgets, P&Ls, balance sheets and month end reports – all of which could be largely automated instead.
What Can Be Done?
You might think the solution is simply to switch to shiny, new FP&A system, but there are three key reasons why CFOs prefer to stick to Excel:
- Despite its drawbacks, Excel is still a leader when it comes to flexibility
- Their existing models would go to waste
- The costs of switching and retraining staff would be too great
DataRails acknowledges this reality, and their software helps make financial planning easier within Excel itself. It empowers CFOs and their staff to speed up their processes through use of connected data sources and AI-powered projections. As Excel can effectively be used as a front end to a cloud-based database, CFOs can be confident the data they are viewing is up to date and error free.
This frees up critical time for CFOs to spend more time on the analysis and communication parts of their jobs where they can have the greatest impact.
When asked in the survey how they’d spend their time if they had less manual work, 52% said they would spend more time being a strategic business partner, 44% said they would spend more time on analysis and 36% would use it for more real-time reporting. All of these activities make much better use of a highly-skilled CFO’s time than wasting time on a manual process.
Didi Gurfinkel, Co-Founder and CEO of DataRails, shared his conclusions from the survey in a statement. “While CFOs have emerged as a catalyst for change particularly since COVID-19, the reality is that daily processes are preventing finance leaders from achieving their maximum impact,” he said. “In particular, fixing errors and chasing down data is ever present, leading to dissatisfaction with performance and harming CFOs’ overall quality of life. This constant frustration is creating a detrimental personal impact while preventing businesses from harnessing much-needed talent within the CFOs office.”
Poignantly, 33% of CFOs say they’ve adopted new technology as a result of Covid. It will be interesting to observe how greater adoption changes their relationship with manual work for the better.