Looking back at the beginning of 2020, few at that time would have predicted what was in store for the next 12 months. From the changes we would be navigating globally to the changes to our businesses and within our homes, 2020 has been a challenging and unpredictable year to say the least.
While accurate predictions might not have been entirely possible, careful preparation was and still is—at least on the organizational front within business. With the right processes, people, data and technology in place, businesses can prepare themselves for change. More than ever before, CFOs and their teams will lead the way.
But are businesses doing enough to prepare for change? A recent survey of 350 business leaders, finance and operations professionals from across industries and around the globe was taken to find out. The Vena Q2-2020 Industry Benchmark Report revealed that most companies were unprepared for change this year, without the agile finance-led business planning in place that would help them adjust their plans on the fly, and move forward intelligently and confidently.
It can be difficult to know how to start preparing for the unexpected, however, a skilled CFO can ensure their company is prepared so that the team is not left scrambling, by taking steps such as:
Introducing an early warning system. Surveyed professionals found that 56 percent of businesses do not have an early warning system in place. That means more than half of organizations potentially have no way to anticipate what’s ahead and to act early on changes already underway. Through weekly and monthly operational and financial reviews, with an eye on trailing and leading indicators across the business, the right dashboards and review process can help you react early to change—and by doing so, get ahead of it.
Putting an agile planning process in place. Only 48 percent of companies surveyed have an agile planning process in place—leaving more than half who don’t. And since 40 percent of businesses aren’t using scenario modeling before making forecasting adjustments, many organizations are potentially left with no way to plan ahead. By implementing the right set of processes— including scenario modeling, cash flow management and agile forecasting —you can empower your organization with the foresight to react to change with agility and confidence, ensuring you have a strategic plan in place and the flexibility to revise that plan on the fly.
Creating a solid foundation of data. Data is key for finance teams, both in times of crisis and during stable, more predictable times. The recent benchmark report identified several key challenges still holding organizations back on the data front. Of the professionals surveyed, 57 percent named disparate and disconnected data as a key data challenge, while 52 percent spend too much time wrangling data and 49 percent find it difficult to get meaningful and actionable insights from their data. Yet the right foundation of data—and the ability to access it and use it effectively—is critical for informed and fast decision making, fueling data-driven storytelling and empowering the technology solutions you use. That makes it a key differentiator in how you navigate change and lead the way today and into the future.
Savvy CFOs play a vital strategic role in leading their organizations through change. The right processes and data, combined with an early warning system, can help your company be prepared for when the next wave of change arrives.
If you are a business owner or CEO within the San Francisco Bay Area or Silicon Valley, in need of an experienced part-time CFO to help your company identify opportunity and navigate the economic landscape, improve cash flow, accounting and billing process management, as well as profit margins, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.