Consequently, the demand for digital consulting solutions in the areas of financial planning, forecasting and analysis has gone up over the past two years, a top TC executive said.
As per the study, 50% of respondents admitted that they consistently fail to deliver on short-term forecasts or make significant errors, and only 54% said their teams possess sufficient risk assessment capabilities.
These executives estimated that, on average, 43% of their financial planning and forecasting relies on intuition instead of analytics.
“Financial services clients have been seeking a modernization in their overall financial planning and forecasting. And, clearly, we are seeing a lot of activity in Europe and some in North America and India also,” Vikas Gopal, global managing partner, finance and shared services consulting lead, TCS, told ET. “We have for the last full 48 months been doing much more work in areas of agile financial planning and analysis.”
While TCS is seeing more clients in the area of specialised data-driven financial planning from financial sectors across Europe, Gopal said other sectors and geographies are also entering this space.
The study found that financial planning and analysis teams are of the view that rigid risk evaluation practices hamper organizations’ ability to stay on top of the rapidly evolving regulatory environment, as well as to manage evolving demands.
“While businesses were beginning to understand that they had data, they lacked insights. But Covid-19 has accelerated their need for technology to give them these insights,” he added.
The TCS report revealed that a small group of finance executives, called the financial ‘Trendsetters’, are leading the way.
Making up only 6% of the total respondents, they have more mature digital capabilities, operate in a more agile manner, and demonstrate greater use of AI and machine learning.
Trendsetters also invest more in transformational financial planning and analysis capabilities to future-proof their respective organizations before the next big disruption.
The TCS 2021 Global Financial Leadership Study surveyed 750 senior finance leaders belonging to companies with annual revenues of $5 billion or more, from a variety of industries including energy and resources, healthcare, travel and tourism, technology, insurance, financial services, and manufacturing.
Respondents hailed from nine nations: the United States, United Kingdom, Germany, Canada, the Netherlands, Switzerland, Australia, India, and Japan.
The Trendsetters within this ecosystem who take effective data-driven decisions are more common across geographies like Canada, Germany and India, across sectors like banking, travel, tourism and hospitality, technology, and high-tech, according to the study.
The Trendsetters are more likely to invest in acquiring transformational capabilities like cloud-based systems, AI/ML and third-party consulting solutions than their peers.
