2020 will go down the annals of history as the year when the entire world came to a grinding halt. The COVID-19 crisis – marked by its global spread, lockdowns and uncertainties – did not have any parallels in recent memory. Its disruptive impact afflicted all sectors, geographies and functions, at nearly the same time. The crisis gave CFOs sleepless nights for the most part of the year – which started in early spring.
Here Krishnan Raghunathan, Head, Finance & Accounting Services, WNS, explores how COVID-19 has created new opportunities for CFOs, re-defined their roles as enablers of future-readiness and fast-tracked their move beyond the finance function.
While the crisis compelled businesses to reinvent for relevance and viability, it also shone a light on CFOs’ abilities to navigate the challenging near-term and successfully position their organisations for the long-term. After all, it is the CFO who most directly contributes to an organisation’s day-to-day financial health.
Concerted Action to Ensure Future-readiness
In the new normal, it is imperative for organisations to be better prepared for future uncertainties by enabling digitisation, distributed operations and remote working models. The Global CFO Survey 2020 conducted by Everest Group, and supported by WNS, revealed that the onus is on CFOs to help organisations to be agile, resilient and digitally future-ready.
As a result, CFOs are increasingly orchestrating transformational journeys for their organisations. The survey showed that over 50 per cent of CFOs believe that driving proactive initiatives for future-readiness is extremely important in preparing the organisation and the finance function for disruptions similar to COVID-19.
In a similar vein, nearly 53 per cent of CFOs are considering re-evaluation of their locations’ strategy, along with operating and service delivery models. These findings reinforce the emerging trends spanning industries to include massive virtualisation, technology enablement and forward-looking services in the operational mix.
Approximately 52 per cent of the CFOs surveyed are supporting their organisations in ‘reassessing business strategies factoring in the current environment,’ and 51 per cent are working towards ‘improving the cash flow.’
Ensuring Business Continuity and Financial Resilience
With significant economic and operational interruption due to the pandemic, CFOs are expected to save costs while balancing business continuity and financial resilience. The time is ripe for fragmented operations and legacy systems to make way for unified operations underpinned by digital business models and hyper-automation.
Over 50 per cent of CFOs that participated in the Global CFO Survey believe that embedding robust business continuity plans are essential. As a result, they are seeking to design a new-gen finance function – essentially a lean organisation that can catalyse innovation at scale.
Adopting a Digital-only Mindset
The digital age mandates a brand-new approach, one that will help CFOs seamlessly communicate with critical stakeholders and drive operational efficiencies. In the new world order, viewing the business, challenges and transformation through a digital lens is an imperative. This requires significant investments in the right technologies, including artificial intelligence, automation, analytics and cloud – thereby enabling CFOs to understand and predict operational drivers.
The futuristic CFO’s role transcends the finance function to include the entire organisation as well as strategic partners in the ecosystem. CFOs can therefore orchestrate digital transformation by determining the economic viability of each initiative and improve paybacks from the same by analysing cross-functional data.
Another key aspect that the CFOs need to focus is that digital technologies such as Blockchain, cloud computing and automation will continue to play a much larger role in finance.
Reinforcing Organisational Agility
The futuristic CFO needs to be a technology evangelist, a data arbiter and a digital transformation leader – all rolled into one. It will be extremely critical for them to take decisive actions for reducing operating costs, while simultaneously maintaining some flexibility to balance those reductions once the economy recovers.
Many CFOs now have plans in place to prepare for talent disruption, virtualising their organisations and deploying right-fit operating models. CFOs who have already sharpened value optimisation capabilities are better positioned to manage turbulent times. One thing is sure – the ball is now firmly in the in CFOs’ court when it comes to enabling growth in the new normal and beyond.