‘Gut instinct’ key to driving key financial business decisions
Malcolm Gladwell said that “decisions made very quickly can be every bit as good as decisions made cautiously and deliberately”. And it seems he was right, according to a recent report by KPMG and ACCA.
In a new global study, the joint authors of the Performance Reporting – an eye on the facts found that almost 40% of finance professionals say that ‘gut instinct’ is a greater influencer of key business decisions than hard facts.
The study of 1,100 accountants from 50 countries worldwide also found that more than half of all respondents (56%) regard their finance teams as being the “gatekeepers of data” or the “providers of basic financial analysis at best.”
Speaking to Accountancy Age, John O’Mahony, head of KPMG’s enterprise performance management team, said: “The finance function is finding its reputation as a data repository hard to shake. The team needs to step out from behind their spreadsheets, actively guide the board and work with them to drive the strategy for the business.
“We already seeing this happen in the consumer goods sector, where finance teams work hand in glove with leadership and the wider business to drive better performance.
“However, this reputation overhaul cannot be achieved while finance teams remain tied up in transactional activities, such as time consuming data extraction or traditional month end analysis. This sort of activity is often not valued by the business and can be done by reporting technology, freeing up the finance professional to join colleagues at a client meeting and help to set the agenda, not just inform it.”
Jamie Lyon, head of corporate sector at ACCA, said: “The benefits of using concrete data sources, particularly external ones, are manifold; however gaining buy-in from the top of the business is essential to unlocking their true value.
“If management do not trust the data on which performance insight is based, or would rather use their own instinct, it becomes even harder for the rest of the business to see it as an essential part of the decision making process.”