Introduction
The COVID-19 pandemic has had a profound impact on the world in many ways, and its effects are particularly evident in IT industries and various organizations. While the crisis has accelerated digital transformation efforts in 2021, it has also presented new challenges for CFOs, who must balance the need for increased digitization with the pressure to manage finances efficiently.
To better understand the role of CFOs in driving data-driven decision-making in 2021, several surveys were conducted. Below is a summary of key findings from these surveys.
Gartner Survey
According to Alex Bant, Chief of Research, Finance at Gartner, “CFOs are increasingly inquiring about artificial intelligence (AI), machine learning, robotics, and advanced analytics. 2021 is the year to move from discussions about the future to making tangible investments, achieving short-term wins, offsetting costs, and having a clear roadmap for the future.”
Gartner’s survey of 300 finance leaders, including 58% CFOs, highlighted four major priorities for CFOs in 2021 that are aligned with accelerating digital transformation. Here’s a quick summary of these priorities:
1.Advanced FinTech Tools and Analytics
Finance analytics are now critical for business success. CFOs are being urged to expand resources in analytics to provide deeper insights into financial data, which can support better decision-making and strategic planning.
2. Automation Tools and Technology
Traditional automation technologies, such as Robotic Process Automation (RPA), have proven effective in boosting efficiency and reducing costs. However, scaling these tools can be challenging. To further enhance productivity, CFOs may need to adopt more advanced automation technologies, such as machine learning and AI-powered assistants.
3. Digital Skills Development
The shift toward digitization has accelerated due to the pandemic, and CFOs must ensure that their teams have the necessary digital skills to adapt. This includes fostering a culture of continuous learning and driving the adoption of new digital tools within the organization.
4. Digital Investment Review and Governance
As digital transformation accelerates, CFOs must rethink traditional budgeting models and prepare for increased investment in technology. This includes reviewing digital investment strategies and implementing stronger governance mechanisms to ensure that funds are allocated efficiently and effectively.
5. PwC Survey
PwC’s Pulse Survey identified six key areas where CFOs will play a critical role in data-driven decision-making in 2021:
- Taxes, Risks, and Regulations
- Diversity and Inclusion
- Purpose and ESG (Environmental, Social, and Governance)
- Return to Growth
- Workforce Strategy
- Digital Transformation
Additionally, the survey noted the need for a shift in how companies approach financial planning. Due to the uncertainty brought about by the pandemic, many businesses moved from fixed-cost budgeting to more flexible, modular budgeting. CFOs are now tasked with adopting broader, more adaptive budgeting strategies, reserving 15-20% of the company budget for initiatives like capital projects and other high-priority investments.
Another critical action is strengthening contingency planning. CFOs need to design and prioritize workforce strategies based on different levels of uncertainty, ensuring that organizations are prepared for a range of possible scenarios.
McKinsey & Company Insights
According to McKinsey & Company, finance is at the core of every business decision, and CFOs’ most significant contributions to an organization’s business model will have a direct impact on overall performance. This highlights the pivotal role that CFOs will play in steering organizations through both short-term challenges and long-term digital transformation efforts.
Conclusion
The COVID-19 pandemic has forced organizations to rethink traditional business practices, and CFOs have become central figures in driving the digital transformation required for success. By prioritizing technology investments, developing digital skills, and adopting flexible financial strategies, CFOs can help their organizations navigate uncertainty while ensuring sustainable growth in the future.