During the coronavirus, CFOs and their teams have stepped up and put the hours in to keep businesses afloat. But those conditions have taken their toll.
Over the course of 2020, we became accustomed to experiencing uncertainty. Coronavirus has had a significant impact on CFOs and their teams and those reliant upon a typical trading environment.
The Brexit trade deal between the UK and the EEC has at least provided some level of certainty, although we are yet to decipher precisely what this will mean for many organisations. While we know about direct tariffs, the non-tariff cost of regulation and documentation on organisations is as yet uncertain.
We undertook our research before the current lockdown and the Brexit deal. However, the most significant findings have ongoing relevance.
CFOs and finance teams put the hours in
The pressure was on CFOs and finance teams in 2020, and still will be in the foreseeable future as the coronavirus pandemic continues. Cash, expense and cost control, planning and reporting continue to be critical activities – not to mention the interpretation and application of government schemes such as furlough and loans.
Finance has been at the forefront and has risen to the challenges posed. Teams have shown innovation, strategic insight and resilience. However, this has not been achieved without a significant impact on staff.
The finance team’s wellbeing is a big challenge, as we can see in the articles and discussions across various finance and accountancy platforms. While legislation in many European countries deals with this, the UK largely relies upon company initiatives. We need to keep wellbeing firmly at the top of the agenda, especially as remote working continues and headcount pressure increases.
Planning, analysis and reporting are critical
To those within finance, this has always been obvious. However, it feels like it has taken a pandemic-driven crisis for many people outside of finance to fully appreciate the benefits of high-quality planning, analysis and reporting. The ability to model various scenarios, put plans into action and measure the organisation’s performance has been critical to survival and recovery.
This renewed focus on planning, analysis and reporting is a positive. xP&A (extended planning and analysis) has emerged as a trending topic to reflect this. However, there is an expectation that finance can deliver these efficiently and effectively, and our research shows that many organisations fall short in critical areas around data quality and technology. Given that everyone now understands the strategic importance of xP&A, now is the perfect time to seek investment to address the issues. GenerationCFO will be focusing on this trend, what it means and how we can manage it in the coming months.
Getting the transformation ball rolling
Most organisations have had to make significant changes to operations as a result of the pandemic. In this respect, it is proving to be a catalyst for transformation; accelerating new decentralised ways of working and cutting costs. We see self-service software, cloud delivery and Robotic Process Automation as increasingly important initiatives.
While the desire to transform is immense, progress within finance is still slow or non-existent. Ongoing and upcoming projects are delayed. Additionally, there are still barriers to overcome, including managing change.
We need to address and overcome these challenges urgently if the required digital finance transformation is to come to fruition.
There are some excellent examples of organisations that have performed well in the crisis, and others who have failed. Those that have been flexible and agile, pivoting their businesses to changing markets and demands, have fared well. Those that have not, such as Arcadia, have publicly collapsed.
With the crisis extending longer than expected, organisations have realised the need to build long-term flexibility into their operating model. Chief Restructuring Officer (CRO), a role rarely discussed previously, is now much in demand as organisations must take action. Never has business resilience been so important.
The CFO and the finance team need to ensure that they are strategically positioned as these changes unfold. We are in a perfect position to do this given the role we have performed so far in the crisis and the renewed focus on planning, analysis and reporting.
It is now up the CFO and the finance team to make transformation a reality. Now is the time to embrace technology, upskill your team and deliver the digital finance function of the future.