The COVID-19 pandemic has left no individuals, families or businesses unaffected. For businesses, the overall economic uncertainty, as well as having to adapt to remote working due to shelter in place orders, has put business planning processes under immense pressure, with calibrations needed even faster and with more frequency. Just last year, a survey of finance leaders found only 1 in 4 were confident their planning processes equipped them to be responsive to economic and geopolitical shifts. The current COVID crisis shines an even brighter light on the important role finance teams play in business strategy, ensuring decisions are based on solid data and accurate forecasts.
Finance has always been a natural crucible for business strategy—a central nerve centre through which key business inputs were sanctioned and all eventual outputs measured and recorded. This is true whether it is business-as-usual operational activities, investments in new skills or capabilities, research and development (R&D) for new innovations, or simply making payroll and keeping the lights on. Finance touches every part of the organisation, and, in the best of worlds, it can act as a rich source of cross-functional insight that can feed into the overall business strategy. Now more than ever, this proves invaluable, and allows finance to take a closer look at the role they can—and should—be playing in their organisations.
A single source is key
The way in which businesses are run has changed radically over the past decades, with globalisation, fast and ubiquitous connectivity, digital transformation, and an explosion of data calling for more short-term adjustments to planning and execution. This new way of running an organisation requires IT infrastructure that can process and analyse data in a way that is nimble and easily actionable without depriving it of context or accuracy. Businesses that do not have a highly integrated and automated planning process in place are in jeopardy of becoming laggards and placing the organisation two steps behind competitors.
With quick access to data becoming key to modern business success, finance organisations are increasingly turning to the cloud to access both financial and operational data. The shift away from on-premises planning systems, with siloed data and struggles around version control, to a system based on a single source of real-time data has helped companies become more agile. Web-based systems that provide mobile access has proven to be invaluable and is what has allowed so many businesses to quickly shift to remote work in recent months as people self-isolate due to COVID-19.
New technology, new skills
In addition to infrastructure technology changes, finance is also benefiting from the automation of many mundane finance tasks, such as manual data collection and consolidation of financial and operational data. Streamlining these tasks frees up finance to assume a greater strategic role for the business. This, in part, is driving a new set of skill requirements for finance teams as well. In the same 2019 study referenced above, 50 percent of finance leaders say they plan to upskill 50 percent of their workforce in the coming five years. Topping the list of desired skills is the ability to identify and manage risk, which given today’s business environment, reflects an expanding role in supporting business strategy. Finance leaders also noted expertise with new tools and technologies was key, underscoring the impact technology is having—and will continue to have—on the finance function.
Change agents for finance
As this evolution continues, there is a strong case to be made for finance teams to take on the position as stewards of change by acting beyond “number keepers” to transformation leaders for planning processes and sophisticated and relevant scenario-based planning. Eventually, finance will play a major role in helping the business model and automate complex, multi-stage operational practices and governance processes from end-to-end.
As businesses adopt these more agile planning methods, the stage is set for finance to act as the hub of business planning. While executives will undoubtedly continue to lead on the development of business strategy, finance professionals armed with the right tools can sense change, produce insights from stimuli, and operationalize coherent responses between different departments. In other words, finance will act as the lead integrator—the lens through which all changes are anticipated, understood, and modelled in order to develop a more agile, coherent response. With this transparency, business functions will have data-driven insights to make better, faster decisions.
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