The game continues to change for CFOs and the office of finance. To accurately measure and forecast corporate performance, CFOs must now skillfully manage information and data from across the business—identifying, gathering, and analyzing it in a way that will inform strategic decision-making. This impacts not only the amount of data CFOs and their teams manage, but also the type of data they manage.
Gone are the days of simply calculating and reporting financial numbers. Rather, the office of finance must also account for the more meaningful metrics that typically drive the financials. CFOs must know the business drivers behind the financials and their potential impact on the company’s future. But that knowledge requires both business understanding—a skill that many CFOs identify as the one missing from their teams—and more efficient business processes.
As we’ve previously reported, this drive for deeper business understanding has put greater pressure on finance teams to collaborate and integrate with other parts of the business. And, as CFOs work to infuse themselves and their teams with greater business acumen, they are also introducing new, non-financial key performance indicators (KPIs) along with financial KPIs, seeking to more accurately track, measure, and forecast future performance.
Our Q3 2016 CFO Indicator report looks at the growing impact of non-financial KPIs in measuring corporate performance; why CFOs and their teams should lead the effort to define these important KPIs; and how business processes and skillsets must change to accommodate these new non-financial metrics.
Our study reveals that non-financial KPIs are on the rise, with more than three-quarters of CFOs reporting that they are tracking non-financial KPIs. In addition, many expect these metrics to comprise up to 30% of their KPIs in just two years. Yet, figuring out exactly which non-financial metrics to track could prove challenging.
Nearly half of CFOs have previously reported that finance and other departments aren’t aligned on key metrics, and the introduction of more KPIs, particularly the inherently more subjective non-financial KPIs, could only serve to aggravate the problem.
Check out our infographic for more information on how tracking more and more non-financial KPIs will impact the future of finance and corporate performance management (CPM).