Study highlights need for finance professionals to transform their roles and adopt new KPIs to better measure value of intangible assets
LONDON, Jan. 5, 2016 / PRNewswire — The Digital Finance Imperative, new research from Chartered Global Management Accountant® (CGMA®), found that CFOs in Europe the Middle East and Africa (EMEA) need to rethink how they measure the health of their corporations in the digital age. According to the study, while the majority of a corporation’s value derives from intangible assets such as customer sentiment and brand, few finance professionals surveyed say they can access the right data to measure and monitor these critical elements of their business – just 16% in the case of customer sentiment.
The report, sponsored by Oracle, argues that measuring the business value of such intangible assets through innovative KPIs is only going to grow in importance as digitally enabled business models proliferate. Intangible assets have increased in importance over the last several years and today account for 80% of the value of companies that make up the S&P 500 Index. The respondents to the EMEA survey believe the top value drivers for their businesses are customer satisfaction (75%), quality of business processes (62%) and customer relationships (62%).
However, the survey found that finance professionals in EMEA are struggling to access and analyze data around intangible assets. For instance, only 16% of respondents are able to assemble and analyze data on customer sentiment and only 16% have access to data about the impact of their brand on their business. Only 29% say they can measure the quality of their business process.
“Finance is well placed to become the rudder of modern business, but to do so it needs to be able to draw on relevant data from across the entire organization using modern, cloud-based ERP and performance management systems,” said Laurent Dechaux, Applications Vice President for ERP Western Europe at Oracle. “Without this capability, there is a risk that digitally-savvy lines of business will bypass finance altogether; generating their own strategic insights to take directly to management.”
When asked about the extent to which finance has been realigned to support new value drivers, only 10% of respondents reported that finance in their organization has been fully engaged with regard to ‘providing non-financial measures of progress towards strategic intent.’
Dr. Noel Tagoe, FCMA, CGMA, executive director of education at CIMA and one of the report’s authors commented: “As digitization makes it more difficult for businesses to differentiate and earn a premium, the quality of decision making has become essential to success, and finance can take the lead in ensuring this quality. It has the enterprise-wide overview and skill required to work with diverse internal stakeholders, ensuring that the business assembles, analyzes, and applies data to improve performance.”
The study features insights from 367 executives in 29 EMEA countries.
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About the Research
CIMA and AICPA conducted a global survey, sponsored by Oracle, of senior finance professionals and other managers across different industries. In addition, CIMA and AICPA conducted interviews with senior finance professionals to inform its interpretation of the survey results. The survey was answered by 367 respondents in 29 EMEA countries. Most respondents were in senior finance roles.
About the Chartered Global Management Accountant (CGMA)
Two of the world’s most prestigious accounting bodies, AICPA and CIMA, have formed a joint-venture to establish the Chartered Global Management Accountant (CGMA) designation to elevate the profession of management accounting. The designation recognizes the most talented and committed management accountants with the discipline and skill to drive strong business performance. Currently, more than 150,000 management accountants worldwide hold the CGMA designation.
About the Chartered Institute of Management Accountants (CIMA)
The Chartered Institute of Management Accountants, founded in 1919, is the world’s leading and largest professional body of Management Accountants, with more than 227,000 members and students operating in 179 countries, working at the heart of business. CIMA members and students work in industry, commerce, the public sector and not-for-profit organizations.
About The American Institute of CPAs (AICPA)
The American Institute of CPAs (AICPA) is the world’s largest member association representing the accounting profession, with more than 412,000 members in 144 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting.
The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialty credentials for CPAs who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. Through a joint venture with the Chartered Institute of Management Accountants (CIMA), it has established the Chartered Global Management Accountant (CGMA) designation, which sets a new standard for global recognition of management accounting.
The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.
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 Calculated as the percentage of respondents selecting high scores – 4 or 5 – less the percentage selecting low scores – 1 or 2
 Ocean Tomo, as cited in The Wall Street Journal, 2014
 All calculated as the percentage of respondents selecting high scores – 4 or 5 – less the percentage selecting low scores – 1 or 2