*This is the second in a three-part series on the new imperative for oil and gas producers.*
You can find Part 1, the Four Faces here.
The world is always reinventing itself, and for that growing number of organizations and their CFOs who desire or expect Finance to play more of a catalytic and strategic role, the key challenge is likely not in seeing the need but in overcoming a number of systemic barriers in their way, in particular:
- Inability to produce timely and relevant forecasts
- A fragmented systems environment
- Ineffective financial close processes.
Deloitte recently surveyed CFOs from many larger Canadian upstream oil and gas companies. Here are some highlights of what we learned:
- 60% of participants identified current conditions as an opportunity rather than a challenge seeing increased competitiveness, greater productivity and improved quality of the workforce coming out of this downturn.
- 75% of CFOs identified improvements to cost/efficiency management as a high priority.
- Debt reduction and managing lenders expectations were consistent themes.
- Growth capital has largely been deferred, in addition to reduced sustaining capital in some cases.
- 83% of CFOs identified improvements to the balance sheet as a high priority.
- CFOs were generally split on assigning a high or medium priority to hedging strategy.
More stats can be found below.
As it happens, 61 per cent of CFOs already see the need for Finance to become more strategic, with improvements to their business partnering and analytical thinking being key manifestations of the goal. We see enhancement of their typical approach in three crucial areas -- capital planning, budgeting and forecasting -- as part of the critical path forward. More info on each area, next time.Suggest a correction