Financial Executives Also Express Need for Better and More Timely Analytical Information, According to Research by CSC and FERF
EL SEGUNDO, Calif., June 9, 2005 — Information security topped this year’s list of concerns in the seventh annual Technology Issues for Financial Executives survey. The survey was conducted by Computer Sciences Corporation, in association with the Financial Executives Research Foundation (FERF), the research affiliate of Financial Executives International (FEI).
For the first time, “information security” emerged as the number one concern related to technology among financial executives surveyed, replacing “prioritizing technology investments,” which dropped to number two. Only one in five chief financial officers (CFOs) are “highly satisfied” with their security programs.
“Companies recognize how vulnerable they are,” said Jerry Boltin, a senior partner and the Business Intelligence practice leader in CSC’s Consulting Group. “They see the growing number of news articles about customer information being accessed or stolen and they wonder, ‘If these guys can be breached, how secure are we?'”
Financial executives ranked “Facilitating analysis and decision making (business intelligence)” as the area most constrained by the lack of appropriate technology solutions. The survey also found a much higher than expected level of planned investments in analytic and decision support information, particularly among large entities. Several dozen respondents plan to spend $10 million or more in the next year to upgrade their analytical environments, with the largest planned expenditure reported as $200 million.
“The desire among CFOs to improve analytical environments is driven by an increased need for better and more timely information to assist decision making and monitor performance — primarily in response to ever greater competitive pressures and to meet the stringent reporting and disclosure requirements of Sarbanes-Oxley,” said Boltin. “The results clearly indicate that senior financial officers are taking their analytical information needs seriously and taking steps to address them. Some of these investments are 10-fold greater than what I would have expected.”
Entities upgrading analytical and decision-support capabilities in the next year are focusing largely on projects that measure business performance and effectiveness. The top two analytical areas cited by financial executives as planned for upgrades include “planning/budgeting/forecasting” and “management dashboard.”
The survey also found that overall information technology (IT) spending is expected to increase modestly throughout the next year, and companies are planning a number of new outsourcing and in-sourcing (shared services) agreements.
All forms of outsourcing are expected to continue, according to the survey, and the use of shared services continues to increase. Human resources outsourcing was ranked as the top area of planned outsourcing activity, followed by payroll and IT outsourcing, which remained the top two most commonly outsourced business functions. About 90 percent of respondents rated their outsourcing arrangement as successful. “One of the drivers of the continued movement toward outsourcing is the consistently high overall ratings outsourcing has received among those that have done it,” said Boltin.
The survey examined a variety of additional pertinent issues, including financial executives’ views related to financial management, IT strategies and the use of technology applications. Other specific topics explored include measuring the return on technology investments, addressing systems integration issues, assessing the effectiveness of ERP implementations and evaluating the use of offshore IT.
Participation in the seventh annual survey set a new record — the 782 responses received represent a 29 percent increase over the prior survey’s total of 607. Respondent demographics matched the overall make up of FEI membership in terms of industry, company size and location of respondent. A downloadable copy of Technology Issues for Financial Executives can be found at http://www.csc.com/solutions/managementconsulting/knowledgelibrary/1770.shtml
About Financial Executives International (FEI)
FEI is the professional association of choice for senior-level financial executives. FEI’s membership comprises 15,000 financial executives in the highest echelon of corporate finance: CFOs, vice presidents of finance, treasurers and controllers. They represent companies of all sizes, both public and private, crossing all industries. FEI has for 70 years been a powerful advocate for its members, speaking vigorously on behalf of the profession before regulatory and legislative bodies. Members participate in the activities of 86 chapters, 75 that are in the United States and 11 in Canada. For more information about FEI, visit www.fei.org.
About Financial Executives Research Foundation (FERF)
Since 1944, FERF has been an independent source of practical information, service and expertise for senior financial executives. FERF is primarily supported by voluntary, tax-deductible contributions from corporations, FEI chapters and individuals. FERF’s mission is to meet the needs of the financial management professional by identifying, developing and distributing timely research in a variety of ways. FERF provides a wide range of research-driven content through published research studies, articles in Financial Executive magazine, electronic newsletters and the FEI Web site, among other formats.
Founded in 1959, Computer Sciences Corporation is a leading global IT services company. CSC’s mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology.
With approximately 79,000 employees, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC’s own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. Headquartered in El Segundo, Calif., CSC reported revenue of $14.1 billion from continuing operations for the 12 months ended April 1, 2005. For more information, visit the company’s Web site at www.csc.com.