By Tim Wakeford, VP Financials Product Strategy at Workday
After a year of dealing with multiple lockdowns, an unstable economy, and shifting customer behaviours, finance teams are now used to continuous change. But to survive to this point, agility had to become a priority. And, in order to achieve it, CFOs had to reimagine everything — from the technology they use to the processes they have implemented.
Many CFOs know that inflexible legacy technologies are holding them back from delivering on that responsibility. Moreover, they know that agile companies will not only achieve a smoother pandemic recovery, but will also be better positioned to become leaders in their markets. A fact proven by a recent Workday study, which revealed that the top-performing firms were 10 times more likely to react quickly to market shifts. But the question remains, where do you start the transformation process and how do organisations adopt an agile culture?
Transformation starts with the CFO
Implementing any type of successful transformation requires the C-suite to lead the charge. Finance touches every aspect of a company, informing all decisions – which is why over the past year CFOs have been inundated with requests for forecasts and planning scenarios to inform the recovery strategy of all areas of the business. The ones that reacted quickly, and had access to real-time data and planning tools were able to respond. But the ones who didn’t, realised that their legacy systems were holding them back.
It became clear that a digital transformation was needed, and that CFOs had a strategic role to play. A Workday survey with C-suite leaders showed that 37 percent of respondents agree that finance is the function most likely to influence digital growth in a business. Moving forward, implementing agile solutions that enable company-wide data analysis and real-time planning should be at the top of the CFO’s agenda. Workday’s research identified five key behaviours which CFOs should prioritise to help encourage an agile workplace culture:
Be responsive — Companies need the ability to plan continuously and in real-time to respond to uncertainty. For CFOs, this means implementing real-time scenario planning and forecasting so they have the agility to manage ongoing challenges such as disrupted supply chains or fluctuating team capacities. HelloFresh, for example, found that replacing spreadsheets with cloud-based forecasting allowed them to respond much quicker to a surge in demand brought by the pandemic.
Be adaptable — Flexible organisational structures and processes are essential to enabling the business to be agile in the face of change. Opening conversations across departments such as HR and Sales can help avoid inconsistencies and unexpected shifts in direction. Furthermore, it will build a healthy agile culture of adaptability and constant improvement. According to Workday’s survey, 14% of CFOs believe strategy evolves with continual learning. While a plan may work from a financial perspective, for example, it can have a negative long term impact on the workforce which only someone in the HR department would be able to identify. Being open to listen, adapt and learn, is part of an agile culture.
Be skilled — Companies need to upskill the workforce so that all teams are aligned when it comes to agile processes, and are making the most of the digital transformation it drives. In fact, 50 percent of businesses are planning to upskill their workforce by 2024 to adapt to the new working environment. For the CFO and its team this will mean investing in more strategic skills, so that they’re able to take a hands-on approach to data to continue guiding departments in their decision-making.
Be empowered — CFOs play a key role when it comes to empowering all business leaders to take actions with agility. The finance department can support teams by equipping employees with the real time data and forecasts they need to make informed decisions about the future.
Take control — Finally, organisations need to be able to recognise failure and act on it. As they implement new agile processes and technology, CFOs should use real-time data to identify when something isn’t working and lead the business to adopt a different approach. In Workday, for example, we realised it was better to focus on modelling less but more granular scenarios, rather than building dozens. This allowed our team to spend less time on comparing multiple scenarios that didn’t massively differ and use their energy to discuss the decisions that mattered.
Organisational agility for long term success
In 2021, CFOs have the opportunity to consolidate their learnings from the pandemic, and ramp up agility by transforming the finance function. To do this successfully, they will need the right technology to provide data-driven insights and to embrace agile behaviours – from empowering leaders with the right insights to investing in new skills. It is the CFOs that apply what they’ve learnt and adopt an agile culture, that will lead their companies to long term success and recovery.