By Neil Kinson, Chief of Staff, Redwood Software – explains the digital priorities for CFOs as they prepare for a new normal

To navigate the immediate challenges COVID-19 has thrown up for many businesses, CFOs are having to produce ever more creative and short-term solutions. The use of technology to enable these solutions has been crucial to weathering the current financial storm. However, post COVID-19, CFOs will have to think more deeply about the future of their businesses and consider how digital transformation will perennially help them to plan more strategically.

Invariably, the organisations that have already embraced digital transformation have generally faired better in the current coronavirus pandemic. From adversity has risen resilience and technology has been crucial in enabling business continuity and new ways of working. As CFOs contemplate the ‘new normal’, where working-from-home is expected, the need for cloud-based infrastructures and predictive analytics has become essential, almost overnight.

Digital investment is now crucial

Digital transformation is therefore no longer a ‘nice to have’ and has been catapulted to the top of the priority list for virtually every business in the world. With economic uncertainty on the horizon, the natural instinct would be to put transformation plans on hold and pause technology projects. However, the opposite is true. Those organisations which have increased digital investment at the depth of the crisis will have a far greater chance of emerging from the pandemic more resilient and competitive.

In April 2020, McKinsey Digital concluded in a report that the research and experience of previous recessions reveals that acting with a “through-cycle mindset” helps organisations accelerate out of a downturn, and companies that move early and decisively in a crisis do best. “We have not seen the end of the crisis,” the report explains. “Nor do we know exactly when the recovery will come. But it will come, and the CEOs who can best prepare their businesses effectively for a more digital future will give their companies the best chance for a brighter future.”

Reliance on manual tasks is obsolete

The implication for CFOs is that without automation or self-service capabilities, many finance teams will struggle to give their businesses the forward-looking information they so desperately need. Certainly, the pandemic has highlighted the biggest failings in financial processes are those most heavily reliant on manual tasks.

This extends particularly to those processes which require significant collaboration between teams and the use of on-premises back office ERP, finance systems and data stores – with all the access and support challenges that presents in a forced remote working situation. Simultaneously, the urgent need for planning and forecasting insights – particularly for cashflow – is placing extra pressure on finance teams at a time when just keeping the lights on is a challenge.

Workforce flexibility, especially around capacity and the work mix of the finance team, has also been propelled up the CFO agenda. The disparate nature of teams, and the new roles they are being forced to assume, also means that oversight, transparency and visibility have never been more important.

What will digital transformation look like?

As CFOs wrestle with the new normal and plan for a post-COVID-19 world, what can they learn from the experiences of organisations that have already embraced the digital transformation of their financial processes?

Here are the top four digital actions CFOs should be prioritising:

1. Automate manual tasks, such as journals, accruals, intercompany accounting, reconciliations and balance sheet certification, ensures the finance function is not overwhelmed and allows CFOs to divert resources where they really matter.
2. Move on-premises systems and data to the cloud provides the anytime, anywhere capabilities needed to support a more widely distributed workforce, including a work at home strategy that may be needed to ensure effective social distancing in the workplace.
3. Document processes and use technology to monitor, manage and orchestrate end-to-end activities. This not only streamlines workflows but also highlights potential bottlenecks and gives you peace of mind with an audit trail of actions.
4. Deploy self-service capabilities such as analytics dashboards to remove significant workload on finance teams and make it easier for the business to find the answers and insights it needs.

It is certainly a brave new digital world, one accelerated by current events. However, those CFOs who can embrace the power of digital processes – and use them to provide an ‘edge’ to their C-suite – are ahead of the curve.

Digital investment now will ensure CFOs are giving their organisations the best possible chance of emerging from this pandemic with greater resiliency and a more positive outlook.