We started this Being Planful series to provide a weekly overview of how CFOs and FP&A teams were navigating through the COVID-19 pandemic and the related economic turmoil. The pandemic seems far from over, but as it (hopefully) begins to wane, there’s no doubt its impact will be felt for years to come. However, most businesses are finding a path forward, which becomes even more tangible as you navigate 2021 planning.
What’s clear is that uncertainty is the only sure thing, and that makes your job in FP&A more difficult than ever. And while CFOs are putting more resources into digital transformation, filling talent gaps, and working more closely with the business, it’s changing what we’re collectively talking about. To keep you current, we’ll continue to provide these insights into how Finance and FP&A leaders are moving forward. There may be fewer pandemic-related topics here, but we’ll always try to roundup the latest thinking to help you stay informed.
Here are a few topics we’ve recently found helpful, and we hope you do, too.
Gartner surveyed CFOs and found there’s mixed confidence in meeting digital transformation goals. The pandemic forced many to reassess their digital capabilities, which most found lacking. Now they’re looking to accelerate investments that can create rapid returns. But, the survey also reflects the pressure CFOs are under to show digital transformation results. “(F)or the first time, all five top CFO priorities concern getting tech right.”
Deloitte / WSJ: What’s on Your Transformation Risk Checklist?
Analysts say more than 70% of digital transformations fail to live up to expectations. But there are many easy-to-spot risks that, if considered, can significantly increase your odds of success. These range from the obvious, like leadership commitment and resistance to change, to the unpredictable, like a black swan event. But simply working through potential risks leaves you better prepared to react to even unforeseen challenges. “Finance leaders should also consider what new types of risks might emerge, what risks could threaten the transformation even after it has been completed, and how those risks can be mitigated with appropriate investment.”
Diverse companies do better financially than less diverse companies, yet diversity remains an issue. With Finance taking on an outsized corporate role, CFOs have a responsibility to help influence a company’s culture of diversity and inclusion. They can start within Finance, and then use their financial levers to incorporate diversity objectives into broader corporate goals. “As diversity becomes a more significant performance metric for individual leaders and organizations, particularly public companies, the CFO is in a unique position to lead in this area.”
A recent survey found just over half of companies expect their workers to stay remote through Q1 of 2021. But 60% have yet to create formal policies covering remote or alternative work arrangements. That opens FP&A up to challenges as worker locations can impact taxes, employees see uneven home office benefits, or facilities teams hedge on potential workplace cost savings. And, as top talent starts to demand more workplace flexibility, they’ll also want it in writing. “(B)usinesses that don’t figure out things like what extra benefits to offer remote workers and how to pay and manage those workers will fall behind in the quest for talent.”
Another new survey finds that CFOs remain wary about the future, which is holding them back on making investments. Most respondents remain focused on liquidity, the risks of remote work, and adapting their businesses to a post-pandemic world. But most agree that “future-proofing” is critical. “To deal with long-term concerns, more than 50% of CFOs see speed, agility, and digital enablement as key characteristics of future-ready organizations.”
The pandemic put FP&A into a constant mode of forecast, reforecast, and repeat, all at warp speed. The business and the c-suite relied on a steady stream of updated financial information, but FP&A delivered, so now that speed is expected. What’s also expected is increased financial analysis, insights, and expertise, and FP&A has to evolve to keep pace. Digital transformation is helping, but CFOs also need to understand their talent needs in a post-pandemic world. “(I)nternal demand for data and insights, digital capabilities, and new approaches to human capital and resourcing will dominate the CFO agenda in the coming year.”
CFO Dive: How can CFOs become the deputy CEO?
The CEO and CFO are uniquely positioned to see across the entire company. But while the CFO typically leans in on financials, it’s a good idea to broaden that perspective by partnering with other departments, specifically Sales. Getting customer insights will help inform the overall corporate strategy, but it also gives the CFO a better understanding of how investments, from R&D to digital transformation, can turn into eventual revenue. “Think out of the box, make the CEO say, ‘Wow, I’ve got a team player here who does his job, and has a strategic mindset to help grow the business, and he’s got a team below him that’ll help him scale.”
Nearly half of CFOs see their role as the “architect of a more agile and resilient organization.” They’re taking the deputy CEO role seriously, and taking more responsibility for creating business value by quickly giving the business the accurate information they need. But they also need an FP&A that is more agile, more analytical, and can put the proper controls in place to limit risk exposure. It’s combining to elevate the CFO’s focus well above just the financials. “Surprisingly, despite the cost challenges that organizations are facing, CFOs rate supporting their businesses to reduce operational costs the lowest among key focus areas.”
Stay Tuned for More Useful FP&A Content
Check back for these occasional resource roundups with links to timely, helpful, and thought-provoking content for FP&A and CFOs. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.