The new report, the Planning and Performance Management Paradigm, by ACCA and Chartered Accountants Australia and New Zealand (CA ANZ) in association with PwC, asked over 3,000 finance professionals around the world for their views on the future of the finance function. Overall respondents report too much focus on past financial performance and limited insight to the other data needed for ESG purposes.

Only 16% of respondents said ESG forecasting was ‘fully integrated’ in their financial planning and performance process, while 82% said stakeholders needed new performance measures beyond the financial. Just over half (56%) of respondents said they currently give ‘equal’ focus to financial and non-financial areas, such as operational objectives. 

Commenting on the report, which is being launched at the World Congress of Accountants in Mumbai, ACCA Chief Executive, Helen Brand OBE, said: “Finance professionals play a vital role in guiding organisations towards their strategic goals through highly uncertain times. In a rapidly challenging economic environment, with increasing urgency to reach net zero targets, finance teams need real time, organisation-wide data to rapidly identify and respond to changing circumstances. 

“Performance drivers are no longer just financial – sustainability and non-financial disclosures need to be embedded into planning and performance processes to create a multidimensional picture beyond the constraints of annual planning cycles. This will mean transformation of planning and performance management processes and culture for many organisations.” 

CA ANZ Chief Executive Ainslie van Onselen said that financial professionals have the skills to evolve planning cycles and performance measurement – but development and continuous learning, as detailed in the report, is required. 

“The role of financial professionals and CFOs is increasingly holistic and value centric, and accordingly they need to develop new forms of performance measurement for investors, analysts and capital markets, over and above pure financial measures.”  

“Financial professionals need to continue to develop the skills to build a business and value case for change and investment prioritisation. This playbook provides tools and information to assist with this.”  

The report recommends planning and performance models should be data-driven, agile and use real-time data where possible. The process should be forward looking, with scenario planning and integrated forecasts. Data and technology are key to achieving this and, where feasible, should be integrated in the organisation’s Cloud-based application architecture. This is currently a potential stumbling block, with the research finding this to be ‘disjointed’ and organisations still relying on spreadsheets and not harnessing new technology efficiently. 

Brian Furness, partner and global head of finance consulting at PwC, commented: “There’s a huge opportunity for finance teams to drive value through collaboration, digital innovation and data analytics.  

“Chief Finance Officers can lead this value-driven, rather than financial-driven agenda, making the case for change and embedding a collaborative culture that supports innovation and the potential for rapidly changing business models and objectives. While annual plans give a point in time, organisations need to be agile and responsive in volatile times and stakeholders will need frequent and quickly produced forecasts.”