CFOs are increasingly optimistic about 2021, but experts warn that FP&A should remember the lessons learned during 2020. New risks are always right around the corner, and what worked in 2020—capturing and utilizing more data, with more advanced technologies, for faster and better decision making—will likely come in handy again soon. Finance is also collaborating more with Human Resources as vaccines have some workers eyeing a path back to the office, at least partially. To keep you current, below are a few insights into how Finance and FP&A leaders are moving forward. We’ve found these articles helpful, and we hope you do, too.
Finance is becoming the new IT, especially where data is concerned. CFOs are leading more digital transformations and FP&A is arguably the only team in need of comprehensive, company-wide data. As they become more immersed in growing mountains of data, they’re also becoming pioneers of artificial intelligence and robotic process automation to put this data to good use. But every digital step needs a foundational strategy that includes data centralization, training, and, surprisingly, strong alignment with Human Resources. “HR can help finance propel its change management agenda by supporting talent acquisition as well as employee skilling and communications.”
CFOs should retain the experiences of 2020 as preparation for other coming threats, such as cybersecurity attacks, trade wars, new regulation, and the effects of climate change. Data, continuous planning, and non-stop forecasting helped many CFOs work their way through 2020, but more advanced analytics and more data will be required to deal with these types of risks going forward. “CFOs who most effectively manage risk today have discarded old forecasting methods that primarily relied on spreadsheets and backward-looking historical data. They have adopted advanced analytics that track external and internal risks based on high volumes of near- or real-time data.”
A recent CFO Signals survey from Deloitte found that two-thirds of CFOs are somewhat or significantly more optimistic about their company’s prospects in 2021. The share ranking the U.S. economy as “good” is also up more than 50% since their last survey in late 2020. And, CFOs are also expecting travel expenses to be cut in half, salaries to increase, and hiring to ramp up. “With markets hitting new highs as mass vaccination efforts in the U.S. hit their stride, Deloitte found that annual revenue expectations hit their highest levels in a decade.”
The lower operational expenses of 2020 are starting to fade, which gives FP&A an opportunity to put any new or reintroduced spending under the microscope. There may be cost savings that can continue, but returning to some semblance of business as usual will, obviously, require some spending increases. Gartner’s Finance Practice VP says CFOs will need a deep understanding of what’s required to support reaching corporate goals so they neither over- nor under-invest. “The first step for CFOs seeking to maintain cost efficiency gains is to determine which cuts made during the pandemic are truly sustainable.”
Deloitte / WSJ: 5 Workforce Trends to Watch in 2021
The Deloitte Global Human Capital Trends report found that executives are much less likely to worry about optimizing work and twice as likely to focus on reimagining work. Their concerns are driven by remote work, to be sure, but also by continuing health, financial, and social equity crises. It’s giving executives more opportunities to put people at the center of their decisions, such as integrating healthcare into work, giving workers more choices, and leveraging more data and technology to enhance performance. It’s also putting HR in the spotlight more than ever before. “For an organization to truly become people-driven at its core, HR must take the lead in embedding human considerations into every aspect of work.”
Everyone needs a workforce plan for themselves. But a year without networking events and trade shows derailed a common source of career opportunities. For those looking to make a move in 2021, an online presence is more important than ever. Of course, LinkedIn is the de facto resume these days, and the accompanying virtual networking has started replacing those previously in-person networking opportunities, especially for finance professionals. “Having a great profile and posting interesting, relevant content on LinkedIn are both important, but perhaps not as crucial as regularly engaging with others.”
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