Five Strategies CFOs Can Use to Respond to the Continuing COVID Pandemic

September 15, 2021
Chris Meyer
#CFOtech | #COVID19 | #financetransformation

Creating Certainty in an Uncertain Time

In ordinary times, CFOs are responsible for ensuring the financial health of an organization. But in today’s extraordinary business environment, the CFO brief is even more challenging. How can CFOs safeguard their company’s financial health when the physical health of its people is anything but certain?

In conversations with C-suite executives, I hear certain phrases repeated: “We thought that COVID-19 was coming to an end.” “We were just beginning to see all of our employees back in the office.” “We expected that vaccinations would mean that everyone was protected.”

This level of frustration is understandable. But the spread of the Delta variant—coupled with the limited adoption of vaccinations and the politicization of mask wearing—have meant that expectations of “back to normal” working conditions need to be postponed. The mutation of the coronavirus also suggests that there may be more mutations ahead, and the “new normal” for workplaces may mean operating within the constraints of remote work and social distancing for the long term.

Despite these challenges, the CFOs I’ve been speaking with are generally positive, seeing opportunities for innovative responses leveraging digital transformations that have been long overdue. I’ve identified five key strategies these CFOs can use to position their organizations for successful adaptation to COVID’s impact:

Engage with employees

CFOs need to ensure that their infrastructure equips staff to work efficiently when working remotely. Performance management software will be critical here, enabling the adoption of a more outcomes-based approach. With new vaccination requirements in place at many larger companies, CFOs now must also invest in the infrastructure to track vaccination status, implement periodic testing, and trace any COVID outbreaks. With increased labor shortages, employee engagement surveys may prove a key tool to confirm that employees are successfully adapting to new working circumstances.

Adopt cloud technologies

Traditionally, CRM-based processes were early adopters of cloud infrastructure, while finance was noticeably slower. COVID disruptions, and the increased demands from a remote workforce, have shifted the paradigm with manually-based workflows no longer possible. Many of the initial security concerns have been addressed, and while large-scale on premise ERP solutions may be more challenging to migrate to the cloud in the short term, cloud-enabled technologies should be a feature of any new best-of-breed point solutions.

Automate processes

Cost increases and labor shortages have reinforced the need to eliminate unnecessary manual tasks. Less time should be dedicated to executing and completing the financial close and more time spent on analyzing and interpreting results. CFOs must adopt the strategy of an accelerated focus on automating month-end, manual, and repetitive tasks; automation has the added benefit of reducing the chances of human error. There are many options for automation in each of the finance functions, from close management to AP automation and receivables management, which CFOs can consider.

Enhance financial forecasting

With the fundamental shifts created by the COVID pandemic, leading to continuously evolving and uncertain conditions, a traditional annual budgeting process is no longer sufficient. What’s required is a move toward more continuous, rolling, quarterly focused plans where various scenarios can be extrapolated and quantified. Investors and stakeholders require more up-to-date information with earnings guidance, and CFOs can and should leverage new technology that will integrate with existing and legacy ERPs to create reliable forward-looking projections, plans, and earnings estimates.

Leverage data

The average large enterprise manages nearly 350 terabytes of data, but siloed organization and limited capabilities of legacy applications have hampered the CFOs ability to access and use this data for comprehensive analysis. Benefits of understanding organizational data can help identify and evaluate market trends, provide better insights to customer behavior and highlight inefficiencies and breakdowns in processes. Furthermore, combining big data with machine learning can identify patterns that can be used to improve these processes giving insights to new market opportunities.

As finance leaders, there is an opportunity in the new ways of operating triggered by this pandemic. Adopting an agile approach to financial management will be imperative, and investments in technology during this critical time can be an accelerator to future success.

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