The lack of environmental stability reduces financial directors’ inclination to make major changes in the operations of the departments they manage. Seven out of ten CFOs surveyed do not plan to reorganise within the next two years, according to the “2024 Central Europe CFO Survey – Finance Operations” prepared by consulting firm Deloitte. The urge to optimise costs leads the respondents to make use of Shared Service Centres (SSC) and business services (GBS), especially in terms of outsourcing repetitive tasks.
The addition to the Deloitte report discussing the moods of Chief Financial Officers (CFOs) from Central Europe is dedicated to trends in the area of the day-to-day operational activities of their departments. The publication also presents projected directions of development and trends influencing the activities of the industry. The supplement to the main report, “Deloitte Central Europe CFO Survey 2024”, was based on a survey conducted between October and December 2023 among 475 financial directors from 15 Central European countries, including Poland.
Resilience in uncertain times
The authors of the report emphasise that in recent years Central European companies have struggled with numerous challenges resulting from political and economic events. The response to these challenges is intended to be organisational and operational coherence. As much as 70% of CFOs surveyed do not plan on making major changes in their departments over the next two years. The authors of the report believe that such distribution of responses is a sign of increasing stability in the operation of financial departments. One of the surveyed financial directors stated that the decline in demand for change may result from many transformations carried out in recent years.
“Most financial directors are decidedly opposed to making major organisational changes in times of widespread instability. This seems understandable, because such processes usually take many years and require careful preparation. On the other hand, a number of challenges currently facing companies and the digitalisation of accounting processes mean that the finance industry needs to be ready to take actions to adapt to new operating conditions” – says Damian Groński, partner in the Business Process Solutions team, Deloitte.
Automation and personnel
As part of the survey, financial directors from Central Europe pointed out trends that, in their opinion, have the most significant impact on the activities of their departments. The area that received the most responses is the ongoing automation of repeatable processes (60%). In second place was the issue of implementing artificial intelligence and machine learning in the functioning of the financial department (39%). The same percentage of respondents stated that it is crucial to attract appropriately qualified employees. 35% of responses related to adjusting activities to regulatory requirements, and every third respondent considered the aim to reduce costs as most important.
“Improving operational efficiency and properly managing human resources are currently the main areas of interest for financial directors. In both cases, tools using artificial intelligence can play an extremely important role. Thanks to them, automating the simplest tasks will be possible, which will allow financial department employees to focus on other types of tasks. Also important are the costs reduction possibilities for the entire department” – adds Damian Groński.
Trust, the basis for outsourcing
The authors of the report stress that most financial department directors prefer to keep key processes within the structure of their organization. The only area that managers would hand over to external subcontractors is transfer pricing documentation – this option was pointed out by every other respondent. In the case of other actions, such as accounting services, about 70% of respondents are in favor of keeping them within the company.
Among the benefits of transferring part of the processes to SSCs or GBS, the most frequently mentioned is gaining access to modern technologies. Equally important is the opportunity to make use of knowledge from external experts and to reduce the cost of operating the financial department. Experts emphasise that a key challenge in this field is trust, the lack of which hinders maximizing the benefits of cooperating with SSCs and business services.
“The drive for cost, process efficiency and the need for innovation means that financial directors are increasingly opting to outsource part of their operations to shared service centres. Given the importance of financial processes for the company and the need to control them, such operations are usually conducted within the organization. However, it often happens that some of the outsourced processes are duplicated. This phenomenon is largely due to a lack of trust, which in turn makes it difficult to fully utilise the potential of shared service centres” – says Monika Warmbier, partner, leader of the Finance & Performance team in Poland, Deloitte.
