Adopting digital technology will be top priority over next five years, say finance chiefs
Digital technology will be the biggest priority for public sector chief financial officers (CFOs) over the next five years according to new research released by EY today.
Based on a survey of 19 public sector chief finance officers (CFOs) in the UK, EY’s report revealed that 58% of CFOs ranked improving performance through the use of digital technology as their most important strategic priority for their organisation. A distant second was driving cost efficiencies through automation and outsourcing which was cited by 26% of CFOs.
Darra Singh, Head of UK Government and Public Sector at EY, comments: “Public sector CFOs are adapting to a changing role where they are taking on more responsibility and are becoming an indispensable part of leadership within local authorities, councils and Whitehall.
“The pressures to deliver more with less in the public sector has thrust the role into the spotlight and they are responding to this challenge in different ways. This includes the use of technology such as blockchain and sophisticated data analytics. We are seeing quite different profiles and responsibilities emerge when compared to the traditional idea of a public sector CFO.”
CFOs now playing a stronger strategic role
EY’s report says that with many public sector savings plans requiring changes to business processes and organisational structures, CFOs are increasingly being called on to support chief executives and other organisational leaders in planning, testing and monitoring reforms. 68% of survey respondents said that they are spending more time on providing analysis and insight to support senior leaders and decision makers than they were five years ago.
In addition to this, 63% of finance chiefs said that they now spend more time supporting their organisation’s development and its strategic goals and 53% said they are increasingly taking the lead in developing and defining overall strategy.
Darra comments: “It is still less than 10 years since government departments were first required to have in place a professionally-qualified finance director, reporting to the permanent secretary and with a seat on the departmental board. This requirement has helped ensure good management and accountability in government finances at the top table, effectively helping to put finance at the heart of decision making.”
Impending war for talent
With the role of the public sector CFO set to change and need for an expanded skill set, the survey points to the difficulty of recruiting the right people to lead finance teams. Almost three quarters of CFOs (74%) agree or strongly agree that organisations are facing a growing talent challenge to find finance leaders who can thrive in this new environment. 90% said that organisations will need to recruit from a more diverse talent pool to find the next generation of finance leaders.
In addition, many CFOs cite restrictions on take-home pay in the public sector as a key obstacle to recruiting staff with appropriate skills.
Darra comments: “While there is an abundance of specialised finance professionals in the private sector, those with Treasury management, corporate finance and procurement expertise can be harder to find in the public sector. Competing for talent, particularly in a budget constrained environment can also pose challenges.”
Partnering across organisations will be ‘critical’
When asked about “top goals for the operating model of the finance function” over the next five years, improving business partnering between the finance operations and other units and functions within the organisation was listed by 95% of CFOs as either critical (58%) or a significant priority (37%).
Darra continues: “Collaborative working within and between government organisations has the potential to not only save costs, but also spread knowledge and skills.
“We’ve gone beyond the isolated back office view of the finance profession. Today’s CFOs are in a unique position to bring together a strategic view of the finances, performance and meeting future needs of their organisations. It is an exciting and challenging time to be a CFO in the public sector.”
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