Surveys and economic statistics continue to prompt optimism as we inch closer to the final quarter of this unprecedented year. Many executives still expect 2020 to be a down year, but as employment and retail sales continue to climb, many also are looking ahead to a bright 2021. For FP&A specifically, the pandemic-induced realities of remote work, office closures, and increased digital reliance appear to be ushering in fundamental changes to how these teams are managed, how they’ll work in the near future, and how they approach business-wide digital transformation.
Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.
CFOs ended Q2 with much optimism about the direction of the economy and their own company’s financial prospects, says a new survey from CFO and Duke University. But, most still see 2020 ending as a down year, and 2021 showing solid revenue growth. “Many of the executives surveyed said they expected their firms’ operating income, employment, and total compensation to bounce back in 2021 after shrinking in 2020.”
WSJ / Deloitte: US Jobs Recovery Continues
The U.S. employment rate continues to show surprising resilience, albeit at a slowing rate over the past few months. More people are returning to the labor force and many of those were able to find work. Retail, professional services, restaurants, and healthcare all showed significant job growth for the month. While news of layoffs in the airline industry could adversely affect this positive trend in September, the August data is both surprising and promising. “The expectation was that personal income would decline in August, leading to a decline in spending and weakness in employment.”
The coronavirus crisis pushed CFOs to be more focused on strategy and creating business value over simply standardizing and automating financial processes, according to a recent survey of financial executives. What’s more, CFOs are showing a newfound affinity for advanced analytics and artificial intelligence. This aligns with the overwhelming response of CFOs who say they’re continuing innovation projects amid the pandemic. “More executives slated advanced analytics for accelerated implementation (29%) than they did any other category of technology. Artificial intelligence was a close second at 23%.”
Widespread office shutdowns, and the subsequent and stable productivity of at-home workers, has CFOs rethinking their real estate strategies. For office space, even a relatively small move to remote or flexible work arrangements would have a real impact on demand. But for warehousing and data centers, many companies are looking to increase investments as pandemic concerns keep more people shopping and working from home. “Whatever (real estate) strategy you have today, it might have to look very different in early 2021.”
InformationWeek: The Other CFO: The Rise of the Cloud Economist
The pandemic has accelerated what was already a fast-moving digital transformation of the broader workplace. That’s put Finance on the hook for monitoring and managing cloud costs as the business increases usage. It’s also prompting CFOs to put “cloud economists” in place to not just manage costs, but to look more broadly at how their company uses technology for competitive advantage. “The cloud economist will have a deep respect for the budget spreadsheet and an intimate understanding of how applications are built — helping tech pros get what they need and prevent financial disaster.”
Survey after survey has shown that at least some portion of workers will continue to work remotely after the pandemic subsides. But many CFOs were surprised to find just how effective their Finance teams have been, which could signal a shift in how Finance teams are structured. “Given the data-intensive nature of finance and the use of technology tools to mechanize, digitize, and automate traditional finance and accounting processes, there is no burning need for a physical office.”
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.