Finance functions are under significant pressure thanks to the pandemic. What is its legacy?
Before March 2020, many finance functions were either going through change or talking about it. With the broader availability of digital technology for teams of all sizes, the future of finance was a central talking point for the profession.
Stakeholders were also driving change, from leadership and departmental heads to customers to younger team members. The use of data analytics and modelling could enable finance functions to tell a more powerful story. The strategic decisions of the organisation were increasingly becoming the domain of finance.
Under COVID, this progress has been accelerated. Lockdowns have forced organisations to embrace a ‘digital-first’ way of working. Simultaneously, the need for constant planning and scenario modelling has put the need for real-time information and advice front and centre.
In response to a poll conducted as part of a Generation CFO and ACCA webinar, 74 respondents said the finance function had changed forever by Coronavirus, while 17 said otherwise. Here is how it has changed.
Finance teams had to become more agile in the pandemic. Scenario modelling and short-term forecasting have become the order of the day. This requires the use of data-driven insights and a step up in the analytics capability, as outlined in ACCA and CA ANZ’s report Analytics in Finance and Accountancy. However, it is not just a data challenge; it is also an organisational change. Traditional hierarchical organisations have given way to project-centric teams. The modern finance function needs networks of individuals who can be redeployed quickly, supported by leadership teams that play the enabler’s role.
The broader role of finance
More traditional organisations have struggled with the challenges of COVID compared to those that had embraced at least some digital technologies. That need to play catch-up has encouraged companies to accelerate longer-term projects. These projects are also cross-organisational. Finance systems islands have become an integral part of the system and data architecture of the organisation.
Reflecting upon their experience of the past six months, a panel member working in finance noted that integrating project teams in this agile way had proved essential to maintaining organisational strength. The pan-organisational role for finance is explored in ACCA and PwC’s report Finance Insights – Reimagined.
The broader role of finance requires team members to view technology as a business enabler, more than a tool.
the vast majority of webinar participants believed that team members’ mindset was the main barrier to making digital change in the finance function.
Achieving organisational change has long been seen as a challenge. When that change is rapid and constant, then the challenge is multiplied. One panellist working in finance said that their success in undertaking transformation, especially during the pandemic, had been in part to relevant finance teams’ members’ involvement from the start. The longest-serving team member’s views, a potential resister to change, were fundamental to the process. Having an inclusive culture during transformation is essential. This is especially true when teams are remote and not connected in traditional ways.
The technological revolution drives finance to become more efficient. The data revolution has required the function to be more forward-looking, not report the past. The pandemic has strengthened these drivers, forcing finance teams to be more collaborative and agile. Finance teams need to become super-connectors in organisations and embrace change to survive in these challenging times.