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Steward or growth strategist: The role of the finance leader during periods of economic uncertainty

Britain’s departure from the EU continues to cause disruption to financial markets. The resulting changes to regulation and legislation coupled with the effects of the pandemic on the economy mean that many organisations have had to revisit their strategies and lean on their finance leaders for guidance. This has made the role of the finance leader more important than ever as organisations look for ways to overcome current and future the economic uncertainty.

Each organisation will choose a different course and either place their CFO in the position of a steward, ensuring the business’ ability to implement cost saving measures to preserve cash, or a growth strategist, ensuring a company can grow and maximise profitability in the coming months and years.

While both roles are important to continued success in times of uncertainty, this new focus and reliance will place finance leaders in an interesting position; caught between a great opportunity and even greater scrutiny.

Tips for finance leaders when navigating uncertainty:

  1. Harness forecasting, modelling and applied analytics

Finance leaders who harness these activities to ensure the organisation can achieve its goals will see their department go from what’s considered a back-office function to a recognised revenue-enabling portion of the business. The finance and accounting department’s strategic insight and ability to examine current and historical data to make accurate scenario-based forecasts make them the backbone of a business during times of uncertainty.

Forecasting:

Being prepared for anything may be unrealistic, but with a nuanced approach to forecasting and planning, a business can anticipate, adapt and plan to meet a wide range of scenarios with confidence. 

CFOs and their teams will need to process and analyse market and historical company data, then factor in forward-looking indicators to help prepare for the future’s unknown opportunities or challenges.

As such, financial planning skills have gained increased importance, with 67% of finance leaders citing it as the top technical skill for CFOs today, compared to 58% pre-Covid. This was closely followed by strategic decision-making, cited by 56% of respondents, up from 49%.

Modelling and applied analytics:

Modelling the company’s strategy against those scenarios and providing recommendations based on available data is extremely important. This requires adapting to the speed at which current markets are changing, accommodating new data and processing it quick enough to create meaningful insights.

Many finance leaders are looking to Artificial Intelligence (AI) and automation to process mass amounts of data quickly. According to the McKinsey Global Institute, 40% of finance activities, such as revenue management, cash disbursement and general accounting operations, can be completely automated for faster and more accurate reporting.

Forecasting, applied analytics, and modelling are only as effective as the ability to align these insights across the organisation and its different departments, systems, and processes.

While finance and accounting professionals are no strangers to adapting to new ERP software, when it comes to large-scale digital transformation, the finance department is often left behind — this is blocking the enactment and realisation of the strategic insight they’re producing. Indeed, according to research from Oracle, 73% of finance leaders say a closer alignment between the CIO and CFO is important to achieving transformation for companies during times of uncertainty.

It should be of no surprise then that more than three quarters of finance leaders (78%) surveyed by Euler Hermes stated that new technologies had positively impacted their businesses in the past year, with 73% agreeing that they felt enthusiastic about the potential impact of new technologies. While the pandemic may have delayed investment, digital technology is still considered a key priority in the short to medium term.

With the fast-paced technologies that are streamlining finance functions and lifecycles, finance leaders should look to adapt their talent models to better facilitate collaboration between IT and finance, and support that greater need to forecast, model and use applied analytics. This means increased numbers of financial data scientists, financial analysts, and business analysts to provide insight on the available data and to drive decision making, planning, risk assessment and modelling.

In many ways this is revolutionising the finance and accounting department as coding and SQL capabilities become almost as desirable as having ACA, ACCA, CIMA or CFA qualifications. 

This is where engaging a boutique finance and accounting recruitment agency can help. Recruiters have the market knowledge to help you build a recruitment strategy that meets the unique requirements of your finance function so that it is able to support growth now, and in the future.

At Trace we have the experience and understanding to help you find the talent your finance function needs. We focus not only on tracing the movements of the recruitment market, finding the right diversity of skills you need, and also ensuring the right cultural fit. We see cultural fit as the basis of longevity, and in the face of further uncertainty – finding a match that will be a long-term placement with your organisation is of the utmost importance. It’s a crucial part of your business and should play a key role in your recruitment strategy.

Find out more about how we can help you trace the right talent for your finance function by getting in touch with us today.

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