2020 was a year of unpredictability and change for organizations across the globe and revealed many underlying shortcomings in business processes. As organizations move into 2021, finance leaders are leveraging lessons learned in the pandemic as they begin financial planning for the new year and CFO’s top three priorities for 2021 reflect that.
Protiviti’s latest Global Finance Trends Survey provides a study about the priorities of the Office of Finance and, namely, the CFO’s priorities heading into 2021.
CFO Priority #1: Data Security and Privacy
Though this topic has been on many CFOs’ priority lists in the last few years, COVID caused many organizations to significantly increase the focus on their data security measures. Because of COVID, the FBI saw a 400% increase in cyberattacks. This significant surge is staggering, especially for organizations needing to be compliant with industry security standards.
How CFOs Can Address Data Security in 2021
One of the most critical steps that CFOs can take to strengthen their data security is forming a strong collaborative partnership with the Chief Information Officer (CIO). 2020 Forrester Consulting research reveals that CFOs and CIOs must improve their collaboration in order to deliver more value for the organization. By partnering together, the finance and IT leaders surveyed believe that finance processes could deliver improved procedures and increase control in the financial close process. This would help keep data more secure holistically and ensure compliance standards are met. Respondents in the study also identified the next steps that organizations should take to improve their IT and finance collaboration:
- Transparent and faster communication for operational strategies
- Prioritize migration into the Cloud and automation implementation
- Ensure subject matter experts are engaged to fully support decision-making
CFO Priority #2: Advanced Data Analytics
2020 has revealed the importance of data analytics for the organization. Businesses required accurate, real-time insights to guide their organizations throughout the rapidly evolving economic and regulatory climate. Moving into 2021, it is critical that the Office of Finance has the ability to access finance analytics tools to provide these insights that help drive critical business decisions.
How CFOs Can Address Data Analytics Requirements in 2021
If an organization’s Office of Finance still utilizes spreadsheets, or any solution that doesn’t provide accurate, real-time insights into the financials, CFOs must consider a more effective tool. Supplemental solutions that are built specifically to help automate the financial close process, like Cadency, are hyper-critical not only to streamline processes to meet deadlines, but for the financial analytics it can provide.
CFO Priority #3: Changing Internal Demands and Expectations
The necessity for finance teams and the CFO to act as a strategic partner for the organization has increased since the impact of COVID. In times of crisis, internal and external stakeholders look to the voice and guidance of the CFO for reassurance, including the CEO. It is important to consider how the finance function equips the CFO to fulfill all the duties they have today, including providing strategic insights to guide the organization. As a strategist, the CFO is expected to steer the organization in the right direction for the future, add value to the business and enhance shareholder value. The CFO’s expanded role in strategy development includes assessing feasibility by forecasting risks and asking critical questions about dominant growth constraints, uncertainties and underlying assumptions.
How CFOs Can Support the Organization Through Financial Strategy in 2021
The CFO plays a crucial role in managing their F&A teams so that the reporting coming out of the finance department is timely and credible, as well as providing valuable financial reports to support strategy development. When the finance team is fully functional and actively supplying accurate, business-critical insights, the CFO is empowered to provide strategic guidance and value to the CEO and other C-Suite leaders.
Finance transformation is key to making the finance team “fully functional” and empowered. With traditional tools and manual processes, finance teams face several key issues:
- Workflow issues and bottlenecks
- Lack of visibility and control
- High risk of reporting errors
- Inadequate security measures
- Improper process controls and testing
- Inability for effective virtual work
The CFO must focus on delivering a more efficient, effective solution, for finance and accounting teams to utilize in the financial close process, in order to carve out time to support the organization strategically.
Next Steps: Investing in Finance Automation Must Be A CFO Priority for 2021
When discussing CFO priorities for 2021, Jim DeLoach, a managing director at Protiviti had this to say:
“…CFOs are weighing investments in a variety of data governance improvements along with advanced financial planning and analysis tools, robotic process automation applications, artificial intelligence, and blockchain technologies. Changing tomorrow starts now – and should have started yesterday.”
Though some organizations had started on their financial transformation journey before 2020, many had not. COVID caused many organizations to accelerate their financial transformation projects in order to keep up with the resulting demands from the pandemic. This juggling act could have been avoided if organizations had realized the importance of automation across the entire financial close workflow for the Office of Finance sooner. If CFOs have not already taken steps to implement automation into their financial close process, they must prioritize this initiative as part of their financial planning for 2021. Without this step, the top 3 priorities for 2021 that are mentioned above will continue to be a struggle to achieve.
Explore how the CFO should view RPA and the benefits that automation can bring across the entire financial close process.
Written by: Ashton Mathai