The COVID-19 pandemic forced finance functions to quickly rethink how they operate as they put a pause on in-person work and had to use digital tools for almost everything they do. Many proved their resilience in meeting baseline requirements like cash-flow analysis, revenue forecasts and budgeting even as they responded to demands for better and faster insights to help organizations navigate uncertainty.
An enhanced role for the finance function, especially when it comes to providing real-time, forward-looking insights;
A fierce war for talent as chief financial officers grapple with the loss of key people amid the so-called great resignation and a challenging environment for recruitment;
Continued uncertainty about the ideal workplace model for finance functions; and
Ongoing questions about how finance functions can support their organizations in providing high-quality reporting on environmental, social and governance (ESG) matters.
As one of the CFOs we interviewed for this report told us, the challenges add up to a “perfect storm” for finance leaders. Even as they face new demands for insights and a path forward on ESG reporting, they’re struggling to hire and keep the people they need to do the work and meet these changing expectations. This means that capacity, even after investing in finance transformation over the years, is a growing challenge.
So how are CFOs responding? Our interviewees had a mix of responses. While there’s a general sense of not wanting to go back to how their finance functions operated in the past, some said they had slowed down their transformation efforts. We saw some of this sentiment in the recent CFO survey conducted by PwC and the Association of Chartered Certified Accountants. The survey found 29% of Canadian respondents said they had either slowed down on or abandoned changes they had planned prior to the pandemic.
The good news is some of our interviewees are continuing to build on the momentum. One described their efforts to be more agile in response to the increased pace of decision making. In their case, they’re making an effort to roll out new solutions to customers even if they’re not yet perfect. While in the past, the emphasis was on addressing all issues before launching a solution, there’s now a greater willingness to move quickly. Examples like this reinforce the idea that finance transformation isn’t just about technology; sometimes, it’s about how a changing mindset can help finance teams be more effective.
These emerging challenges have shown that slowing down on change or even returning to what had been business as usual isn’t an option. So what does this mean for CFOs?
Now is the time to take stock of how you’ll respond to these pressures by revisiting your broader strategy for finance transformation or, if that’s not possible, identifying the smaller actions you can take now to free up capacity to address new pressures and expectations.
Consider adopting a three-step approach focused on developing your people and transforming your processes so your finance function can enhance its ability to drive performance excellence.
Transformation is even more important today given the increased relevance of the finance function during the pandemic. Our CFO survey found some concerns that this increased relevance may not last. Accelerating your finance transformation agenda will help you make sure that it does.