CFOs PLAY A STRATEGIC ROLE IN RECOVERY

Frederic Portal, Finance Solution Director at Workday

 

With so much uncertainty around what the next year may have in store, businesses are having to quickly apply the lessons learned over the last six months. For the finance office, that means prioritising agility and balancing short term imperatives with longer term business objectives. CFOs will need adapt, as many have, and become the champions of agility within their organisations and the drivers of business recovery. The question is where to start?

 

The adapting role of the CFO

I’ve been speaking to a number of finance leaders across our customer base to understand how they’ve adapted during the pandemic. What’s clear from these conversations is that the role of finance within the organisation is fundamentally changing. As a natural consequence of the pandemic, and the uncertainties and rapid market shifts it brought, all decision-makers in the organisation started approaching the financial office for updated views and forecasts on how the crisis could impact their plans. Everyone, from supply chain to HR, regarding hiring talent or making redundancies, needed to speak to finance. As a result, the CFO and his/her department now sit at the heart of the business. They are continually leading on the budgeting and forecasting of activities and acting as the strategic guide to all departments.

For the businesses that have managed to thrive amidst the curve balls of the crisis, this constant communication has now become a habit, with finance leaders reaching out to other departments to understand their pain points and needs. In healthcare, for example, it has become critical for the financial side and the clinical side of the business to collaborate as they can prioritise investments, by determining whether high-cost equipment leads to better patient outcomes. However, this level of partnership can only be achieved if the financial office can easily share real-time data with the rest of the organisation.

 

The value of a single source of truth for data-driven decisions

Continuous sharing of information, however, calls for new technology. Spreadsheets and disparate data silos are things of the past. In an age where agility is of the essence, finance leaders need to have an easy way of sharing financial insights on a rolling basis. They need to be able to offer other departments, and business leaders, the ability to visualise financial information in real time to make sure their plans are up to date. This is because marching towards the same goal is crucial to recover in a time of crisis. The best way to achieve this is by having a cloud-based platform with a centralised data model that acts as a single source of truth for the entire business.

Having the same data model being used in a planning and cloud ERP system will help the organisation to understand what’s happening in real-time, with leadership accessing key metrics on demand. For ApolloMD, for example, making the switch to a cloud-based common data model allowed them to get the financial reports that could take weeks or even months to be created in mere seconds. Veolia also saw the benefits of this change, as it went from having disparate data in over 50 different ERP systems to a single dashboard that staff across different business units can access on demand to make fast decisions.

From a financial office perspective, having every aspect of organisational planning under a single cloud, can also help business leaders to easily see what they can change to accommodate unforeseen events. Not to mention IT involvement can be reduced, improving efficiency and reducing overall costs associated with decision making.

 

Driving continuous planning in the organisation

With this holistic view of finance, HR, and the supply chain — supported by the right technologies — CFOs can help business leaders to ramp up their organisations’ agility and turn real-time information gathering into a cycle of continuous activity planning. In order to do this, CFOs and finance departments need to transform their processes and embrace agile practices such as continuous scenario planning and the creation of rolling forecasts.

One of our retail customers for example started planning their recovery with multiple pictures of their budget, based on the different future scenarios they could foresee impacting their operations. Rolling forecasts have also become a key part of financial planning over the last months and will continue to be important as we face further economic disruptions. Different from traditional budget planning, rolling forecasts allow the business to have a reliable view of what the next quarters look like, being constantly up to date with what is happening in the organisation. We’ve found that companies that have embraced this have managed to accurately predict changes from four to eight quarters in advance. By deploying these types of data-driven processes, CFOs will make sure they are providing the organisation with accurate insights for continuous decision making.

Agile and continuous planning enables companies to move forward through even the most uncertain times. In the challenging months ahead, the CFOs who provide their organisations with insights to inform their decisions on an ongoing basis will become strategic partners to the business. And it is this strategic partnership that will prove invaluable in the recovery of business, as industries face the second wave of COVID-19, and have to plan and act in a way that will see them thrive now and in the future.

 

spot_img
Ad Slider
Ad 1
Ad 2
Ad 3
Ad 4
Ad 5

Subscribe to our Newsletter