Today, the expectation from the finance division is far more than crunching the numbers. Due to disruptions from competition, technology, economic slowdown and uncertain circumstances, the CFOs are involved in making and executing strategies. They are key technology adopters and change leaders. This week, we will briefly deal with the following topics which are relevant for C-suite executives.
Ways to run effective business services during the crisis
As stated by Accenture, organizations across the world are facing serious business problems due to the pandemic. It has created high volatility in the financial market and economic disruptions across the world.
According to Gartner’s recent Business Continuity Survey, only 12% of organizations out of 1500 are prepared to face the consequences to COVID 19. Most of the entities are facing challenges to implement an immediate crisis response plan. C-suite must brainstorm and take the decision on how to retain their sources, provide the best services to the customers and sustain the business. This is time to decide and act immediately to sustain the business.
As recommended, organizations must make safe and secure virtual working arrangements for resources. All less essential business travel must be restricted. The business activities need to be prioritized and performed based on the importance. e.g. employee payroll, healthcare and supply chain should not be impacted. Organizations must think proactively the future course of actions. They must bring their high talent and distributed team together to ensure the delivery commitments to the client.
Digital future of financial operations
In today’s rapidly changing environment, digitalization is transforming the ways of business operations. It is the integration of digital technology into all business verticals, fundamentally changing the way organizations operate and deliver value to customers.
As stated in financial executives, the way of doing business is completely transformed due to digital and technological disruptions. In the present scenario, CFOs need to familiarize themselves with the full digitalization of financial operations to keep themselves in sync with the corporate strategy. The figure mentioned below illustrates that the use of technology in payments is rising.
The use of technology in payments is rising (Financial Executives)
Overall, digitalization in finance offers the number of benefits. It enhances efficiency and effectiveness. Automation software provides data and generates report within minutes. Now, the companies’ financial information can be stored and viewed on the cloud and there is no need to store the data manually. Furthermore, digitalization has made it easier for businesses to secure the funds they need. It has helped them to find suitable business lenders, identify the lending options and the liberty to choose the best alternative.
Last but not the least advantage is the reduction of the error. The development of automated software allows smooth and stress-free business operations.
Revisit supply chain driven shareholder value to manage unprecedented risks
In today’s time, the CFO’s role has been extended beyond the traditional reporting of financial data. Now, they are also involved in strategic thinking and execution. Steven Bowen, Chairman and CEO at Maine Pointe has stated in his article in proformative.com that supply chain management is vital for the businesses. In the era of globalization, CFOs are expected to critically review the geopolitical risk factors and their repercussions on the supply chain. Furthermore, the unprecedented disruptions caused by the pandemic should be kept in mind while managing the supply chain otherwise it will affect the cost, cash flow, growth and shareholder value.
Organizations can make the best use of the supply chain by transforming it digitally. Supply chain leaders must work in partnership with the leaders of other division (especially finance) to achieve the end to end integration needed to achieve their objectives. The strategic approach of CFOs in the digital supply chain can help to achieve the desired results. CFOs hold the unique position which helps in collaboration, integrity and transparency. One example is the ability to generate more cash for all participants in an end-to-end ecosystem. Digital supply chain requires support as processes in the digital environment are improved and changed and the enormous data drives deeper insights and sustains performance from the process and behavioral changes. The C-suite must bring CFOs into the picture to identify cross-functional internal challenges and the whole ecosystem.
The most successful CFOs work with C-level executives to assist the company to penetrate the marketplace, deliver to customers and achieve the strategic goals. Visualizing the supply chain mechanism is imperative to understand and identify risks because you can’t improve the things unless you see it.
COVID IMPACT: Imperatives for the CFOs
The sudden eruption of COVID 19 pandemic is now inextricable for the businesses. According to the group of experts of the CFO program at Deloitte LLP in CFO magazine, there are some measures that can assist CFOs to safeguard their companies and workforces during these unprecedented changes.
Organizations need to ensure that under COVID 19 situation, virtual back-office arrangements are done at the earliest. In case resources fall and event leaders are not available for critical decisions, CFOs must decide how the authority will shift among their staff. CFOs also need to ensure that the company has enough cash and liquidity to ensure the smoothness in the operations. The finance cost has risen and the value of the stock has fallen due to economic disruptions. Under such circumstances, CFOs should keep revisiting the financing strategies. Also, during uncertain times frequent communication with investors and regulators is a best practice. CFOs should keep the investors informed about the decisions their companies are taking under a crisis situation.
In addition to the above, CFOs must figure out the operational improvements in the wake of COVID 19. The leaders must keep revising their revenue forecast models and reducing enterprise costs to help them navigate this uncertain time. Finance leaders should keep an eye over the new risks which are generated during to change in strategies and different working models. For instance, organizations must create additional checks on their employees’ laptops as there are more chances of cyber risks working outside the company’s premises. CFOs should start exploring different business avenues to determine which markets and segments could bounce back first.
Comments are closed