COVID-19 has strongly impacted the world in a number of ways. A number of its major effects are being witnessed by IT industries and other organizations. This sure has helped organizations in driving digitization in 2021, but at the same time has raised a bar for CFOs in order to increase digitalization while retaining minimal finances.
Multiple surveys were conducted to better understand the CFOs role in data-driven decision making for 2021. Let us go through a quick summary of some of the surveys–
“CFOs have been asking more and more about artificial intelligence (AI), machine learning, robotics and advanced analytics, 2021 is the year to pivot from discussions about the future to making real investments, seeing short-term wins and cost off-set, and having a clear plan for the future.” – said Alex Bant, Chief of Research, Finance, Gartner
As per the survey carried out by Gartner, four among the top priorities of CFOs in 2021 align with driving digitization in 2021. This survey was conducted with 300 finance heads and controllers; among which 58% were CFOs. Here’s a quick recap of the survey with respect to digitalization –
- Advanced FinTech tools and analysis – Analytics in finance are of utmost value for business nowadays. CFOs need to push more towards expanding resources in analytics, in order to provide deeper understanding of financial data and help enhance decision-making processes.
- Automation tools and technology – Traditional automation tools and technologies such as RPA, has helped increase efficiency, reduce time and overall costs. Although the scaling process is not an easy task; therefore, CFOs might need to shift towards newer and advanced automation technologies such as machine learning, AI assistants etc.
- Digital skills growth – Witnessing technology shift towards digitization post pandemic, CFOs need to identify the necessary digital skills and drive themselves as well as organization towards adopting those digital technologies.
- Digital investment review and governance – A fast-pace digital growth will demand more investment i.e. beyond the traditional budgeting processes. Hence, another area for CFOs to redesign funding and business performance.
Based on PwC pulse survey, six major areas that will serve CFOs role in data-driven decision making for 2021, are as follows –
- Taxes, risks and regulations
- Diversity and Inclusion
- Purpose and ESG
- Return to growth
- Digital transformation
Another interesting CFO’s survey was carried out by Deloitte, which stated reducing costs and increasing cash flow as CFO’s top priorities for 2021.
Modularize Finance Planning. . .
Business organizations have seen extreme uncertainty in 2020 due to which there was an abrupt shift from fixed cost budgeting to businesses employing modular cost budgeting. So, it is important now to have a wider vision and modular budgeting strategies with nearly 15-20% of the company budget being reserved for initiatives such as capital projects etc.
Strengthening up worst case scenario planning is yet another must TO-DO for CFOs and organizations. This might have various constraints but one way could be, designing and prioritizing workforce based on the level of uncertainty.
Finance is what drives every angle of a business and hence, in a way CFO’s most meaningful changes and company business model will drive the performance of the organization.