CFOs to the Rescue – CFO

Finance chiefs played a essential purpose in shepherding their businesses as a result of a world wide economic crisis in 2020, and a the latest survey displays how.

CFO Research (part of Argyle Advisory and Research Solutions) and FTI Consulting surveyed 325 chief monetary officers and other senior finance executives in August to understand greater how the finance operate drives enterprise value.

Five essential themes emerged from the survey success:

  • The CFOs’ get the job done all through the pandemic has gained them the ideal to be strategic leaders in their businesses. The pandemic shined a spotlight on finance chiefs’ capacity to guide by means of an crucial and usually neglected job: corporate state of affairs modeling and setting up.
  • In the experience of a “new normal” financial system, CFOs taken care of efficiency with remote teams. In reaction to COVID-19, a whopping 71% of finance workforce customers labored in a remote or primarily remote workforce model, the study showed.
  • The electronic workforce carries on to develop. Although most main money officers have started to adopt automation, the survey final results suggested automation has not attained its whole possible in most businesses.
  • The company finance support shipping model is evolving. Forty-just one per cent of the survey respondents indicated their finance perform was done by a shared companies organization (SSO), but 48% reported they employed business enterprise method outsourcing (BPO) or hybrid designs, this kind of as BPO hybrids.
  • Wanting ahead, the CFO is effectively-positioned to lead the way as an business benefit creator. The finance function’s potential to deliver insights on predictability in an ambiguous marketplace will manual organization choices on charge, operating capital, liquidity, possibility, and money framework.

Strategic Leaders

Strategic CFOs have shown the potential to deliver forecast types dependent on different situations, to change and adapt, to make educated conclusions, and in the long run to lead their businesses previous the worst of COVID-19 and into the restoration time period. Foremost finance chiefs showed their companies how to adapt, remodel, and sustain effectiveness going ahead.

Overwhelmingly, the surveyed finance executives portrayed their chief economical officers and finance teams as climbing to the job across the domains of strategic leadership, arranging and analysis, use of technology and automation, and pinpointing pitfalls. Far more than 9 out of every 10 of the study respondents explained their CFO and finance capabilities:

  • Played well known roles in guiding business technique, producing operational decisions, and driving organization worth across the firm
  • Drove worth by on a regular basis pinpointing locations and major efforts to reduce and optimize organization expenditures and
  • Made use of digital systems like predictive analytics and intelligent automation to provide timely, accurate, pertinent info.

Distant Workforces

CFOs required to adapt to remote workforces, cultural changes, and talent difficulties. The study knowledge instructed that top CFOs were well prepared with automation-assisted support and reacted promptly by revising priorities, facilitating procedures remotely, and preserving expertise and society in their groups.

The most speedy precedence for the CFO and finance function in response to the coronavirus pandemic was to permit a remote workforce, in accordance to the survey. Forty-three p.c of the study respondents reported their finance teams adopted a distant workforce design, with an added 28% performing typically remotely, and 14% performing partially remotely but generally in an place of work.

The concerns that the newly forged remote finance workforces experienced to contend with were broad-ranging. Much more than 40% of the surveyed executives explained the pandemic experienced a considerable effect on price administration, monetary scheduling and investigation, and budgeting and forecasting. And additional than one particular-third of the survey respondents said that threat administration, treasury and operating capital administration, know-how adoption, and accounting and monetary reporting were noticeably impacted.

Bot Workforces

Though CFOs have made developments in robotic system automation (RPA) for the finance purpose, there are still prospects to enhance. Most CFOs have started to adopt automation. Extra than 3-quarters (77%) of the study respondents claimed that at minimum 1 in 20 users of their finance workforce were “virtual,” that means they ended up working with RPA and other automation abilities.

But only 27% said that at the very least 1 in five members of their finance staff have been digital, which suggests that automation has not arrived at its whole probable in most corporations. Eradicating and automating manual processes was a high precedence or critical priority for 52% of the surveyed executives.

Support Supply Evolves

The study success confirmed that BPO is even now heading strong in spite of the effect of automation on the scope of operate outsourced. The finance functionality sent most of its services by BPO for 25% of the study respondents, compared with 22% mainly by global organization companies (GBS), 18% principally via captured shared companies, and 23% via hybrid products.

GBS adoption by companies was staying led by CFOs and finance. Finance was overwhelmingly the most included purpose for GBS assistance delivery, with 86% of the GBS companies such as it. IT was the 2nd-most integrated functionality, at 35%, followed closely by human sources and procurement, at 33% and 32%, respectively. Most of the GBS companies represented in the study, 55%, reported to the CFO.

Price tag containment is however a dominant issue for CFOs. Almost a person-3rd of the surveyed executives said they prepared to boost the use of possibly captive shared companies, BPO, GBS, or a hybrid model to leverage their variable cost models in this unsure small business climate.

Enterprise Value Creator

About two-thirds of the surveyed executives described the latest function of their CFO as a finance and accounting leader. Most of the study respondents also picked an additional role for their CFO, break up approximately evenly in between 3 sorts: an performance and success driver, a company spouse and adviser, and an business benefit creator and organizational chief.

The study indicated that the enterprise value creator position was an increasing a single for CFOs. Eighty-nine per cent of the surveyed executives said that the CFO and finance function experienced the talent and techniques to drive company benefit for the firm.

In the limited expression, CFOs confirmed their companies how to maintain their corporations by means of the preliminary phases of the pandemic. Over the long term, CFOs will seem to transformation initiatives to maintain price tag discounts. Sixty-4 percent of the surveyed executives said that improving planning, situation modeling, and forecasting was a higher or vital precedence for the CFO and finance function in excess of the subsequent 12 to 18 months.

To obtain strategic targets and drive price, 84% of the study respondents said they were being analyzing, implementing, or now using organizing, forecasting, and budgeting systems, and 86% were being executing the exact same for effectiveness reporting and analytics technologies. And 79% mentioned they had been assessing, implementing, or now employing business overall performance administration (EPM) technologies.

Organization Price, finance function, Situation 2020-10 CFO, distant work