More than half of 750 global senior financial leaders revealed that they consistently fail to deliver short-term financial forecasts or make significant errors due to reliance on instincts rather than data analytics, according to TCS’ 2021 Global Financial Leadership Study.
The study also revealed that many of these leaders do not possess sufficient risk assessment capabilities especially in the ongoing pandemic and the shortcomings are driving organisations to boost technology investments in cloud-based systems and data analytics to increase accuracy of financial planning and forecasting.
“Today more than ever, financial leaders wear many hats—from crisis manager to growth officer. If they can supercharge and make the most out of their digital investments and insights, they will help their organisations become more agile, scalable, and proactive—and ultimately take on whatever challenges and opportunities that come their way,” said Krishnan Ramanujam, Business Group Head, Business & Technology Services, TCS.
Other identified weaknesses hampering sound financial forecasting include lack of planning adaptability, rigidity in risk assessments and inability to extract value from existing data to support strategic decision making.
The Tata study surveyed 750 senior finance leaders from nine nations: the United States, United Kingdom, Germany, Canada, Netherlands, Switzerland, Australia, India, and Japan. They belong to companies with annual revenues of US$5 billion or more, from a variety of industries including energy and resources, healthcare, travel and tourism, technology, insurance, financial services, and manufacturing.
Last week, an iTNews Asia with interview with Tableau discussed the danger and folly of business leaders making decisions based on intuition and gut-feel, rather than on data and analytics to solve post-pandemic challenges.