No Match Found
The expectations on finance leaders and their functions have developed in recent years. They are expected to be more business focused, strategic and technology savvy. As companies emerge from COVID-19, a number of opportunities present themselves for leaders to use those skills and guide their business to future growth. To do this, three areas need to be tackled: new products and services, legacy and capabilities.
Partially driven by COVID-19, the last year has seen a strong increase of organisations' investment in new products and services, many of which are enabled by digitalised processes. These include more sustainable products, new online distribution models or value adding services on top of existing offerings.
This trend is also confirmed by the results of our recent global CEO Survey. There, 83% of participants stated that long-term investments in digital transformation are a priority as a result of the pandemic, ahead of cost-cutting measures and talent development.
Finance leaders have a crucial role to play in making that intention a reality. Working across the business to help identify, challenge and govern new initiatives should be priority actions for finance leaders and their teams. As an example, estimating the benefit of initiatives beyond traditional RoI is key to understanding the full value of digital programmes, which typically have long-term strategic impact.
Many organisations struggle with their legacy technology and processes. These tend to be inhibitors of change, can be cost intensive and carry inherent risks.
For example, many finance functions are still tied down day-to-day in backward-looking reporting. Their existing, long-established, body of reports can conceal process inefficiencies and lack insight.
With competing priorities on finance to create efficiencies, support projects and run business as usual, legacy technology and processes are often 'left behind'. That is, they are fixed tactically, worked around or not addressed at all. Finance leaders should not accept these as permanent solutions.
Instead, they should use the disruptions of the previous 12 months as an opportunity to take a fresh look at what is fit for purpose, get rid of obsolete solutions and drive innovation.
Consequently, the priorities for finance leaders have shifted. Building digital capabilities, instilling a project and goal-oriented mindset and greater emphasis on data and analytical capabilities are high on their agendas.
Again, COVID-19 has accelerated existing trends. For example, reporting and forecasting in particular have been impacted. The demand for more agile, forward-looking and scenario-based reporting has never been greater. In the initial phases of the pandemic, this was often delivered ad-hoc to cope with time pressures, such as the need for daily cash reporting. Now, organisations are aiming to improve operations, with faster reporting processes and by adding deeper insight.
Finance leaders should take a step back and look at the capabilities of their teams to deliver against these new requirements which are here to stay.
The high cadence of technology innovation in the market and the plethora of choices require a clear view of where value can be unlocked. This will usually be through business change, since there are rarely enough technology-only benefits attainable to justify the required investment. The opportunities can be articulated in a road map and business case, with focus on value-releasing interim stages.
Fully engage with the business across the entire spectrum of opportunities to enable digitalisation of products and services. As a leader of the business, CFOs need to connect people, functions and departments. They need to provide direction and control for innovation through rigorous business planning.
COVID-19 has put cost pressures on the vast majority of organisations, in particular regarding back office costs where targets of 10-20% year on year are not uncommon. Across-the-board reductions may solve a short term problem, but will not support the positioning for long-term growth. Instead, critically review your differentiating capabilities and selectively protect and invest in them. Get fit for growth.
Most finance systems are now offered as cloud solutions by default. COVID-19 has accelerated that trend and increased adoption in many businesses. Cloud-enabled transformations can deliver accelerated value, but need to be planned as business-led, holistic programmes, as opposed to single point solutions. That requires thorough analysis and planning. Combine all aspects of technology and business change into an integrated road map with bite-size chunks.
Review your reporting against the value drivers of the business. Remove duplication and reports (or elements thereof) that are without clear purpose. Rebuild a better reporting estate by minimising the amount of reports to the 'must-have' initially. Then work with the business on developing more insightful reports. Start with blue sky ambition and develop a plan to implement those components that are harder to deliver e.g., advanced analytics.
Many organisations are looking to regroup post-pandemic and ensure their capabilities are fit for the future. We work with finance leaders to take a holistic look at their role in the business, their functions and their ability to support and drive business growth. Contact us today.