Poor technology may be hindering chief financial officers of major
US companies as they struggle to comply with new regulations in the
aftermath of the accounting scandals that have rocked the US.
Chief executive officers and chief financial officers raced to meet
the US Securities and Exchange Commission (SEC) deadline last week
to certify their companies' financial results,
But their efforts to make full and accurate financial disclosures
are being impeded by legacy IT systems according to a new study,
CFOs: Driving Finance Transformation for the 21st Century,
from Cap Gemini Ernst & Young, the global management and IT
consultancy.
The US authorities imposed last week's deadline for 695 publicly
held companies with revenue in excess of $1.2bn (£780m) to swear by
the accuracy of their financial statements.
The survey showed that 63% of the chief financial officers
questioned had inadequate budgeting, forecasting and
decision-support systems, which made it difficult to get the
information they needed.
Many of those surveyed said this was partly because of difficulties
in integrating the disparate systems acquired during waves of
mergers and acquisitions.
Rich de Moll, vice-president in the finance and employee
transformation practice at Cap Gemini, who collated the study,
said, "I don't care if you're on the most current ERP system. If [a
company is running] disparate systems, you're not going to have
visibility and accuracy" in reporting financial data from scattered
business units.
The survey also highlighted the difficulties businesses have in
implementing technology and the importance chief financial officers
attach to the further IT deployment.
For example, only 23% of the companies surveyed have partially or
fully integrated enterprise resource planning systems for handling
transaction processing, but 77% expected to implement these systems
within the next three years.
Cap Gemini and CFO Research Services interviewed 265 senior finance
executives at US companies with more than $500m in annual revenues.