Covid-19 forced companies to re-examine their ability to pivot in a crisis, and agility was a factor in being able to adapt to the new normal. Nearly half of CFOs surveyed believed that critical business decisions were delayed by finance not being able to deliver meaningful insights from data, according to the recent CFO Indicator Survey 2020 conducted by Workday in March 2020.
But the good news is that those that had more advanced finance digital transformation strategies suffered fewer delays in making critical business decisions. Just over half (54%) of CFOs surveyed implemented many or some finance digital transformation initiatives and can be referred to as digital accelerators while digital novices make up the rest of the sample.
Static planning processes will no longer suffice in today’s changing business environment. COVID-19 has reshaped the way organizations think about business planning. “COVID has certainly brought the need for finance agility to the forefront,” said Michael Magaro, Senior Vice President, Business Finance & IR at Workday. “The role of finance is to frame what the potential outcome should be and level set expectations of the leadership team. Planning for a year ahead is no longer viable.”
Meeting Challenges Head On
Successful CFOs are addressing the need for greater agility by collaborating more closely with their peers. As CFOs take responsibility for data, they must align with other functions and leadership to provide the right platform to ensure that data is accessible and accurate. “Collaboration is critical and there needs to be cross functional alignment, including IT, HR, sales, marketing and other business areas,” Magaro said.
That collaboration centers on the finance team working with business leaders to help them feel more confident in their data capabilities. “We have to be critical thinkers about data, not just reporters. Finance leaders need to encourage their team to develop a data-driven mindset. They should be looking at different types of data and viewing it in different ways,” Magaro noted.
This new approach to agility and data management requires an expanded skill set. To position their companies for future downturns and roadblocks, companies must develop top-notch analytical and strategic-thinking skills within the finance team. This can involve recruiting data scientists and others with similar skills or having them join the finance function from other departments.
Artificial intelligence (AI) can free up the finance team from routine tasks such as reconciling invoices. But the potential is even greater when applied to data-intensive tasks. AI can help organizations mine large volumes much faster, and more accurately, than humans could. The result: better insights faster.
Breaking Down Barriers to Progress
As companies emerge from Covid, they’re getting prepared to restart their digital transformation initiatives. About one-third of CFOs (34%) plan to prioritize finance digital transformation in the next year. In contrast, just 5% focused on it at the height of the pandemic, according to the CFO Indicator Survey 2020.
In addition to the pandemic, there are several roadblocks to a full-fledged commitment to finance digital transformation. Some of those include:
- Legacy platforms make significant cross-functional changes difficult to execute
- Little or no resources committed to reskilling
- Inadequate change management processes
- Difficult to perform cost-benefit analysis because there aren’t always hard-dollar benefits
The good news is that CFOs have in their power to clear the path for their teams to become more agile and begin the journey to finance digital transformation.
Want more information on how to build a more agile future? Download the CFO Indicator Survey 2020