While pressure is nothing new for finance leaders, the demands related to the COVID-19 pandemic require new ways of thinking and evolving at the pace of disruption. Decision-makers need to shift their view from “difficult” to “different” as they address these challenges, turning them into opportunities to make an impact.
Three finance and transformation leaders offer their take on how CFOs and finance can be extraordinary drivers of business, strategy, and leadership now and in a post-quarantine world.
Strategist and Catalyst
Of the four roles of the CFO – operator, steward, strategist and catalyst – the pandemic has not only pushed the leader to heights of visibility, it has also focused their position as strategists and catalysts. As businesses are pushed to find new models and ways of operating, Kelly Herod, Principal at Deloitte Consulting LLP, see the CFO as central to “helping figure out that strategy, the ability, technology and talent” that will lead the company out of the COVID impact and allow it to rebound.
Determining the full impact on business means CFOs must also factor in customer health and retention, and, according Martin Naraschewski, Global Finance Leader at SAP, as owners of vast data stores, they may want to consider looking to the past to chart the best path for the future. “See the patterns behind, and pull learnings from that. Information is even more important now for the company than it was already before. The CFO is the person to drive this insight.”
High cost of legacy
Too much maintenance, lack of agility, speed, flexibility and decision-support – in a crisis situation when days matter, the costs of running a legacy system skyrocket. Even more so in recovery, says Kyle Cheney, Partner at Deloitte & Touche LLP, “when optimal decisions are truly at a premium.”
For Naraschewski, during crisis recovery the costs of legacy systems are highest because they have a dearth of real-time insight. In stable times, profitability doesn’t change from one day to the next. “Now we are in a situation where this real-time insight into liquidity and cash has become extremely important. Here the system environment is creating a lot of indirect costs by [not providing] business information and solutions.”
Investment in tech, and speed of implementation
The virtual environment stay-at-home orders created can be a boon for companies that want to make tech investments in the rebound. As Herod sees it, in a time when almost all work is virtualized, we are able to “reimagine the process or the methods we use to actually build these platforms.” She offers there will be a significant acceleration in how quickly a flexible and agile core – a kinetic financial enterprise – can be stood up in an organization.
Finance transformations in a virtual work world
Finance transformations have been driven largely by cost savings through automation, and though still important, Naraschewski expects a shift towards transformations that focus on running the business in a virtual way, on risk management and cybersecurity, and having more real-time access to information.
And in a virtual working world, for Herod, the bonds between CFOs, CIOs and Chief Risk Officers will tighten. However, Cheney cautions that companies shouldn’t stray too far from automation since it can free up talent and puts the right people in place to focus on those shifts. “I think it's probably a balanced equation here, where you continue with process automation to keep your people freed up to be able to perform a lot of this higher-value activities.”
Post-quarantine and finance
The heart of everything: Leadership
Technology, transformations, cost savings, risk management, cybersecurity – at the heart of any and all of it is good leadership.
Don’t forget to stand in your customer’s shoes, says Herod, offering that check-ins with their leaders are equally important. What resonates most with her in the crisis is the rise of competition-free, peer-to-peer connections with CFOs for the greater good. Leaders she works with want to create like-minded communities “to be able to share thoughts and ideas. Because at the end of the day, all organizations need to come together to navigate through this.”
Want more transformation insights from enterprise leaders? Visit deloitte.com/SAP to download future podcast episodes or listen to previous ones.