Nearly half (46%) of CFOs rely on “gut feel” and instinct to make business decisions in lieu of fast access to accurate internal data, a practice that can delay decision making, introduce errors and erode profitability, according to a new study from Redshift Research commissioned by Epicor Software.
The research, based on a global survey of more than 1,500 financial decision makers, shows that an inability to access the right financial information is having a direct impact on business performance and CFOs’ reputations.
Of those surveyed, 45% say poor data hampers timely decision making, and inaccurate information is the main cause of organizational mistakes. CFOs in the manufacturing/engineering sector were the most likely to have a legacy financial IT infrastructure and a high reliance on instinct for decision making.
The survey results also show that a lack of financial information negatively affects corporate profitability. The more the CFO relies on empirical data for decision making, the better the chances of higher profitability, the study says. CFOs who rely on empirical data for decision making had greater profits, with 72% experiencing a profit increase.
CFOs said the visibility of financial information is often less than perfect in many areas, with only about half of those surveyed saying they have “good visibility” of financial information including overall and business unit performance, product line performance and profitability, sales and labor costs, sales forecasts, raw material costs and customer profitability.
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