5 Ways finance can drive growth in the post-Covid economy

As the global pandemic winds down, finance leaders should congratulate themselves on having guided their teams through the most bizarre year on record. They will have precious little time to rest on their laurels, however. The economy has changed irreversibly, and the world after 2021 holds a host of planning challenges for today’s decision-makers.

Thankfully, modern finance departments stand uniquely equipped to lead in the post-crisis future. In 2020, the CFO’s responsibilities shifted away from compliance and streamlining and toward strategy and change management.¹ Over 80% of chief executives expect the CFO’s importance to rise after the pandemic.²

At the dawn of the post-pandemic era, five tips may help finance executives chart a course toward growth. Today’s CFO will need to reframe normal, assess staff readiness, understand market changes, solve across siloes, and invest in the right technology.

1. Reframe normal

Decision-makers across functions will need to identify and resist a powerful temptation. Think about the words typically associated with a post-vaccine world: we return, go back to, resume, strive after pre-crisis revenues. Of course, few would seriously confuse the economy before with the economy after Covid-19. But finance departments exiting the pandemic still carry years of sunk costs: long-term strategies, tech investments, digital transformation programs, and more. Unless CFOs interrogate pre-crisis plans and adjust as necessary, they risk prolonging recovery and wrongfooting their organizations in a still-uncertain era.

2. Prioritize staff

Finance teams face the same challenges as the rest of the US workforce. Nearly one-fourth of employees have experienced job disruption during Covid,³ and the US workforce stands at substantially higher risk for depression and PTSD than before the pandemic. Yet many executives seem to have lost touch with their staff during months of remote work: twice as many leaders as employees believe that their organizations do enough to train, communicate, and support mental health.⁴ According to Microsoft, decision-makers report almost 23% better mental health than their employees.

CFOs should identify gaps in communication and feedback that emerged under work from home policies. Before driving ahead with digital transformation projects, finance leaders should assess staff readiness and strive to earn buy-in from critical users.

3. Understand the (new) market

The full impact of Covid-19 may not come into focus for another decade.  But a barrage of surveys has already marked key differences. The past year of business catapulted digital adoption forward by anywhere from two to seven years. Consumer markets shifted toward digital and home-based purchases, mirroring a widespread decision to save rather than spend. Buyers of products across sectors want more digital options and experiences in 2021 than ever before. While the crisis deepened existing digital trends in the B2B market, corporate spending priorities have changed drastically, reflecting new stresses on cybersecurity and rates of digital transformation.⁵

Facing this brave new world, CFOs should collect and synthesize data into vivid portraits of their firms’ customers, competitors, and partners. The Harvard Business Review suggests grouping behavioral shifts across these stakeholders into three categories: sustained behaviors (those with no change), transformed behaviors (those that will remain but change), and collapsed behaviors (those gone for good).

4. Solve across siloes

CFOs exit the pandemic with unprecedented influence. Fully 82% of CEOs believe that the CFO will grow in importance over the next three to five years—a sentiment shared by only 66% of CFOs themselves.⁶ Finance teams helped speed adaptation during the crisis, and they will play either primary or crucial roles in the top three 2021-2023 goals identified by CEOs.⁷ The time has come for finance to accept a more important seat at the table.

Every member of the C-Suite will need to see more clearly, act more quickly, and decide with greater confidence than ever before. Alongside their own difficulties, CFOs will increasingly need to look past siloes and solve pain points across departments.

5. Invest in the right tech

In the days ahead, CFOs will likely find answers from the same source that helped enterprises adapt throughout the crisis: cloud-based software.

COVID has catalyzed a surge in cloud adoption—one of the core stages in digital transformation. A variety of enterprise systems have accounted for much of this surge: cloud workflow, document management, CRM, donor management, and other specific applications.

Finance leaders should search for three key terms in post-crisis cloud initiatives: cybersecurity, collaboration, and cost savings.

a. Cybersecurity

During the pandemic, 40% of organizations saw an increase in cyberattacks.⁸ Driven out from under the umbrella of corporate networks, cybersecurity relied on VPNs, private Wi-fi, and distraction-laden home offices. CFOs should evaluate any cloud investment by several security criteria. First, consider data environment. Recent research suggests that some environments are more secure than others.⁹ Second, consider the individual’s provider’s security measures and certifications. Providers vetted by an organization like the UKAS must demonstrate cybersecurity in multiple audits over years. Cybersecurity also depends on provisions in service agreements. A provider that takes legal responsibility for, but not ownership of, client data will have a stronger incentive to protect it than a provider that assumes both.

b. Collaboration

Covid-19 drove nearly 90% of workforces into remote arrangements, forcing finance teams to master the art of the remote close. The results surprised CFOs: two-thirds reported improvements in collaboration, efficiency, and strategic focus.¹⁰ By selecting the right cloud finance system, CFOs can retain these benefits without a remote workforce. Look for systems on the multi-tenant cloud, systems that combine built-in automation with configurable digital workflows. An ultra-modern accounting solution will purge your finance function of manual labor, granting efficiency gains and streamlining processes for any future crisis.

c. Cost Savings

In a recent survey, C-Suite executives named cost management as their top priority for the next two years.¹¹ Here too CFOs will find value in shrewd tech investments. In addition to cybersecurity and collaboration, leaders should search for two specific functionalities in a finance solution: Robotic Process Automation and integrated Machine Learning. When paired, they can enable organizations to automate a once-unthinkable range of processes—up to 75% of manual tasks, in the case of a true cloud finance solution like Xledger.

Finance automation has a dual benefit. CFOs can maximize efficiency and minimize error, driving finance costs well below pre-pandemic levels. As RP- and ML-enabled solutions automate processes, they free resources and users across departments for work that adds value rather than tedium.

Xledger empowers 10,000+ customers worldwide with the market’s most automated and unified finance solution. Trusted by globally trusted audit firms BDO and PwC, Xledger automates more accounting processes than any competitor. Both IDC and Gartner have recognized Xledger as a provider in the market for financial management software—IDC as a major player and Gartner as a representative vendor.

Our cloud-based business management software pairs advanced BI tools with limitless scalability on a true cloud platform. We enable finance teams to transform their companies with all-in-one solutions for digital workflow, data security, and process automation. Please contact us to learn more.

 

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Sources:
1. Grant Thornton, “Building Your ‘New Normal’: CFOs are shifting roles to become architects of what’s next” CFO Survey, 2020.
2. ACCA/IMA, “The CFO of the Future,” 2020.
3. IBM, “Covid-19 and the Future of Business,” 2020.
4. Same.
5. Grant Thornton, 2021.
6. ACCA/IMA.
7. IBM.
8. Harvey Nash and KPMG, “Everything Changed. Or did it?” CIO Survey, 2020.
9. For instance, in back-to-back studies by cloud security firm Alert Logic.
10. Grant Thornton, “CFOs aren’t waiting for normal. They’re ready now” CFO Survey 2021.
11. IBM.