The COVID-19 crisis has tested the strength of every organization—and every CFO. Prior to the pandemic, some CFOs had started on the path to building an agile, digital-first finance organization. Yet many others were still weighing the decision, or cautiously holding back.
The crisis has thrown caution to the wind. Nearly overnight, entire societies have had to adapt to a new way of doing things. Likewise, finance leaders have recognized that they need to act (and react) faster than ever. It’s never been more urgent to build more a more agile, resilient business that can adjust course quickly to unforeseen circumstances. Even as the world begins its recovery, finance leaders want to be ready for the next disruption.
But what does it take to build a resilient business—one that can quickly return to growth? Here are 4 strategies that we’ve seen our customers adopt with great success.
CFOs are seizing the moment to automate as many finance processes as possible. As Oracle founder Larry Ellison likes to say, “When you eliminate human intervention, you eliminate human error.” Adopting a touchless approach to transactions—moving a transaction all the way from order to invoice to payment—can deliver immediate value while reducing risk, said Oracle’s Matt Bradley in a recent webcast.
Automating the financial close offers another area for huge productivity gains. Even in the midst of the pandemic, Oracle managed to shorten its monthly close by 20 percent while working remotely, freeing the finance team up to focus on more pressing concerns, such as dealing with new COVID-19 regulations. Our ultimate goal is a fully automated close to provide real-time accounting and reporting, as well as enabling finance to focus on more activities that deliver better business outcomes, such as partnering with our development leads to provide feedback on products, and with our customers to ensure their success using Oracle Cloud ERP, EPM and Analytics.
In addition to productivity gains, automation also improves data quality for better decision-making. “We're really encouraging finance to have a look at not just financial information, but at operational information as well,” Bradley explained, “because that information may contain what we would consider leading indicators, such as customer usage. You’re really trying to get to that early warning sign that something is either improving for you or not, so you can take corrective action.”
Dynamic resource allocation is another strategy that many CFOs are adopting. They’re aggressively cleaning up their balance sheets—identifying products, services, or business units that no longer make sense to maintain, thus freeing up cash and resources to invest in other areas.
The scenario modeling capabilities in a product such as Oracle Cloud EPM can help finance teams re-plan and re-forecast quickly, oftentimes on a daily basis in response to rapidly changing events. The ability to look at key elements that are important for the business will help you position your organization for success in the new normal, taking advantage of opportunistic M&A to bolster your competitive advantage; or investing in new capabilities to strengthen your supply chain resiliency, customer service, or employee success.
In addition to automating transactions and the financial close, consider investing in decision support and analytics. Bradley urges companies to move toward machine learning to analyze data at scale, because machines can spot patterns much more readily than humans. Finance systems with built-in machine learning can cluster the information, make predictions, generate forecasts, and help executives take swift, corrective action. CFOs can unleash the full potential of their FP&A teams, helping them quickly analyze and present information in a meaningful way that delivers better business outcomes.
When other lines of business start to turn to your finance team for guidance, that’s a good sign. To lead, finance teams must not only build a skilled FP&A bench, they must also develop their “soft skills” such as communication, empathy, and a digital-first mindset. To develop your finance team’s skills, AICPA & CIMA recommend the CGMA Competency Framework. This program was developed based on feedback from thousands of finance leaders worldwide. It provides a roadmap to help finance leaders develop the technical, business, people, leadership, and digital skills required now and in the future.
At the end of the day, a business crisis isn’t just financial. The biggest impact is on your customers and employees. Business leaders should address the health and safety of their workers, providing reassurance that the organization has a plan to keep them safe and healthy. And they should reassure customers, investors, and other stakeholders that they have a plan to keep the business running.
Here, too, technology can play a critical role. The narrative reporting capabilities in Oracle Cloud EPM help automate both flux and statutory reports—replacing spreadsheets with a centralized, cloud-based tool, so everyone has access to the right numbers every time the information is updated. Oracle’s own finance team uses narrative reporting internally, and we’ve seen productivity gains of 80 percent since we started using it to generate our reports.
As CFOs seek to boost the resiliency of their finance organizations and return the business to growth, they should consider these four strategies. With a resilient, agile organization, finance teams will be well positioned to take advantages of new opportunities and return the business to growth quickly.