Looking back on 2020, one thing the year showed us is that the world can change quickly, dramatically, and in some ways, permanently. Business leaders have navigated a lot over the years—such as the global financial crisis of 2008—and despite the significant impact of those challenging times, much returned to normal once we were through them. This time feels different.
One of the biggest priorities for business leaders globally will be assessing what the world will look like in 2021 and beyond—and how we can prepare for it. Among the top questions to consider: How are customer expectations changing, and what matters most to employees around how and where they work? Those answers will guide decisions about where companies should invest, to both meet the needs of business today and take advantage of the longer-term opportunities ahead.
What’s more, the office of the CFO has an enormous role in helping the broader business manage uncertainty and make the best decisions for the future—giving finance professionals an unprecedented opportunity to lead. As I think about the year ahead, here are the areas finance teams can have the biggest impact in helping their organizations navigate 2021.
Agile technology—and an agile mindset—are now imperatives
It is truly an era of survival of the fittest—companies that can’t move fast will be left behind. All of us need to model a wider range of scenarios, and be able to make better, more timely decisions. To do this, we need access to different information—and faster—than ever before.
This starts with technology. In 2020, we saw many companies’ finance teams accelerating their digital initiatives after realizing they were being held back by legacy systems. Historically, finance has been hesitant to move off legacy technology—often because of the battle scars they’ve experienced from past implementations. I’ve been there in past roles, and no one wants to go through a painful two-year project only to see no real gains. Yet the pandemic has underscored the necessity of moving financial systems to the cloud to give businesses the agility they need—and the good news is these deployments are much shorter than onsite implementations, and with much greater value delivered at the end.
But agility is not just about technology. In many instances, those struggling to adapt are teams who’ve done things the same way for years and are hesitant to challenge the status quo. Finance professionals today need a “change mindset” to help them adapt and thrive during these times. Does your team embrace and drive change? Do team members have the support to bring forth new ideas on how to do things and look for ways to improve?
Well before 2020, our finance team has prioritized hiring people who embrace change, which has served us well in recent months. We are also in the unique position to use our own products and are continuously trying out new Workday features and processes, which challenges and inspires us to think and work differently. Having a change mindset will be a powerful advantage for finance teams as they continue to respond to shifting conditions and business needs this year and beyond.
Take a continuous and dynamic planning approach
The future is hard to predict, so when it comes to financial planning, we know that most of the time we aren’t going to hit the mark perfectly. What matters is limiting the degree of how wrong we are and adjusting quickly—especially as businesses will face more uncertainty for quite some time.
Traditional, static planning processes do not support the agility and speed that businesses need to navigate change today. Even before the pandemic emerged, 75% of CFOs said their planning processes did not equip them to be responsive to economic and geopolitical shifts.
Taking a continuous and dynamic planning approach enables finance to respond quickly and effectively to change, whether this is doing monthly, weekly, or even daily forecasting, or creating more flexibility in how you budget. For our finance team, the ability to take real-time data and create multiple scenarios has given us the insight to make better and timely decisions and execute on them quickly. We also ensure we don’t allocate all funds upfront in case we need to react quickly and be able to financially support additional or shifting priorities.
Partner more closely with the office of the CIO
This past year, CFOs and CIOs have worked more closely together as organizations relied more heavily on technology to operate. This relationship will continue to be very important as businesses consider the post-pandemic world and which technology investments are going to be most valuable in the future.
I encourage finance leaders to build a strong relationship with the office of the CIO. That partnership has been invaluable to my organization, helping us be more agile and responsive to business needs during the past year. For example, early on in the pandemic, our CIO was able to help us create new reports to look at our accounts receivable balance by our customers’ industries, giving us insight into the pandemic-driven risks inherent in our future cash collections and enabling us to proactively manage those risks.
While these times are challenging, they’re also creating an opportunity for finance teams to demonstrate the value they bring to the rest of the business. And many of the things that finance is doing right now—investing in the right technologies, valuing a change mindset, continuous planning, and partnering with the CIO—will help us better guide our organizations through 2021 and beyond.