The pandemic has undoubtedly led to a shift in the global business landscape. Economic, political and environmental forces all now play a part in financial stability.
CFOs must battle with emerging public health policies and their subsequent impact on business operations when planning for the future.
The level of impact that Covid-19 has and will have on businesses is not universal. Sectors such as hospitality and the arts have truly felt the hardest burden from closures and reduced services. However, the organisations that will survive this pandemic won’t be those that dwell on the current uncertainty but those that plan accordingly. There is more demand than ever to accurately plan and forecast with agility.
Digital transformation of the finance planning function will be pivotal to its ability to adapt and succeed in the future. CFOs need to accelerate the adoption of technological innovations in their sphere in order to keep up with a rapidly changing world – yesterday’s toolkit is no longer fit for purpose.
Here are 3 key ways that CFOs can prepare themselves for the future:
1. Real-time financial transparency infrastructure
The demand for agile financial planning has increased since the global crisis occurred. The conventional methods, with manual processes, incoherent systems, and fragmented data, are no longer adequate.
Through the inclusion of the latest cloud scenario planning systems, CFOs can now gather financial data and sub-ledger transactions in real time in order to analyse their budgets and forecast potential costs and revenue streams. Benefiting from this, CFOs can enhance their scenario planning capability and take appropriate measures to mitigate risks.
In the same way that professionals across all areas of business have adapted to working from home and collaborating via video, finance teams need to take up the gauntlet of working remotely on a shared source of a data that can be accessed securely from anywhere, providing a single source of truth that ensures everyone is on the same page and working from the latest figures.
2. Comprehensive data integration
Before the pandemic, forecasts and planning relied on historic data. The pre-defined system helped in providing solutions for many cases such as sales predictions and applied run-rates. Now planning requires the inclusion of several new factors such as health, policy, and socio-economic drivers. The impact of these factors will be felt enterprise-wide, demanding real-time data collection from several systems.
The integration of this data into former static models can be a time-consuming, challenging task. Here, the adoption of a digital planning platform that can integrate any third-party data source will be the most viable option. EPM solutions such as Axiom can integrate with other enterprise platforms including enterprise resource planning software and finance systems.
3. Enhanced cross-functionality of financial planning & analysis
The traditional scope of financial planning and analysis needs to be altered, empowering finance teams to work beyond the scope of annual budgets and variances reports. They need to enhance their capacity by assessing trade-offs in resource allocation. CFOs may re-delegate and create scenarios that may help in capacity enhancements of financial planning.
Division and strategic delegation of assignments can increase productivity and offer value. Agile teams can be formed and assigned projects such as guiding the organisation in the short term by targeting cash flow leakages. Identification of the right triggers can be done by certain members of financial planning, whereas others can work on future forecasting for the medium- and long-term outlook.
For this cross-functional strategy, financial planning and analysis teams need to come out of their comfort zone and create a collaboration-based environment. This cannot be achieved by following the conventional method of using their excel sheets – involvement of the wider business and interaction with their peers is imperative. Here, the adoption of a robust planning software can boost their efficiency, technological advancement can help with predictive forecasts and save time for finance to focus on key activities. Thus, it elevates the role of the financial planning function, positioning them as a key player for the organisation.
Conclusion
Where many industries are going through an existential crisis, CFOs can play a leading role in guiding them towards a sustainable future.
The introduction of new methods and adoption and integration of the latest technologies for future scenario planning is vital. CFOs not only need to build the capacity of their teams but must educate, train and create room for the introduction of upgraded platforms for effective operations and financial management.
Axiom’s EPM software allows you to integrate multiple data sources into a unified view, so you can make critical decisions in real time. Get in touch today to find out how we do the heavy lifting for you, by calling +44 (0)1932 548 465, or email us at hello@verostone.com