Multiple surveys find that CFOs are beginning to see a glimmer of light at the end of the pandemic tunnel. But they expect unpredictability to be the new normal, which renders their traditional Finance processes somewhat useless. This is driving a thirst for modern planning and forecasting methods to help them act on what they’ve learned during the pandemic and position Finance as a nimble, technology-driven force for future growth. It’s all thrust FP&A into a more strategic role, but only if they’ve been able to both adjust to the chaos and bring more innovation to the table.
Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.
What the Experts are Saying on FP&A
A recent survey shows that CFO optimism has increased significantly (to 60% from last quarter’s 11%). But the biggest takeaway is how CFOs are using the lessons learned during the pandemic to fundamentally change how Finance operates. Specifically, this means pushing digital and operational transformation within their own organizations. “CFOs are looking at this as an opportunity to create permanent structures in how they employ their people and utilize their tech in new and innovative ways.”
Deloitte / WSJ: Retool FP&A for the Recovery Economy
The pandemic has elevated FP&A into an active part of each company’s recovery due to the need for constant revisions to scenarios, models, and plans. It’s given CFOs and FP&A leaders a new outlook on the work, tools, skills, and processes FP&A needs in this new, unpredictable normal. And, it’s highlighted the limitations of those teams who try to maintain their status quo or simply depend on historical assumptions. “The COVID-19 pandemic has revealed the vulnerabilities of traditional FP&A processes and inputs, and brought new challenges.”
A new survey by Grant Thornton, an audit, tax and advisory firm, found that CFOs are spending much less time on core responsibilities and much more time on strategic activities. Unfortunately, many CFOs also delayed modernization projects, which the firm sees as a mistake since innovation is critical to maintaining positive momentum. “During a pandemic, a time of significant change in how business works, is when you should be innovating.”
Working from outside of a traditional office is looking more and more like the preferred scenario going forward. But remote work also brings up some issues, like training challenges and erosion of corporate culture. For the CFO, it also brings tax implications, auditing challenges, real estate confusion, revised salaries, and more. The new thinking is that flexible work arrangements might be a better strategy than wholesale remote workforces. “Ultimately, the evolution that’s currently unfolding is one where corporations will need to have the best of both worlds.”
The CFO’s job is to make the right decisions to create growth, but FP&A sets the cadence that makes those strategies come to fruition, according to the CFO of HubSpot, a marketing technology company. That makes FP&A experience critical for any CFO, giving them a deep financial understanding of the company to spot opportunities that no other business leaders can even see. “You have perspective and understanding of different parts of the business and how your peers are going to be thinking through things and making choices.”
Moving 27,000 employees to remote work while avoiding layoffs has put Booz Allen under the microscope as other companies try to understand this enviable outcome. The firm’s CFO credits a focus on people first, specifically alleviating job stress and layoff fears. By repurposing budget for travel and events, plus scaling back raises and promotions, the company was able to fund emergency time off, dependent care, and more. The benefit was a happier, less stressed workforce, and it showed. “With reduced job worries, our employees have been more productive than ever, our financial performance has been exceptional and we still have some of the (funds) available if there are new COVID-related impacts later this year.”
McKinsey: 2020 leadership reading list
If you have the free time to dive into a good book (lucky you!), McKinsey surveyed 60 business leaders from diverse fields to get reading suggestions. Recommendations come from CEOs, entrepreneurs, philanthropists, journalists, teachers, and more. It’s not all work, however, since many of the picks relate to current social and cultural events, or are just to help you “find opportunities to reflect and recharge.”
Stay Tuned for More Useful FP&A Content
We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.