The Covid-19 pandemic has delivered a palpable impact to many businesses, and has created an undeniable need for them to re-examine their digital readiness and become smarter and more agile.
As a result, the Chief Financial Officer’s (CFO) role has suddenly become more onerous, due to growing expectations for them to lead change in the new normal.
Asia is poised to leapfrog other regions in economic recovery thanks to timely public health response, appropriate post-lockdown policies with contact tracing and testing, and significant policy stimulus to increase spending in a weak economy.
Research by IMF projects a reasonably rosy 6.9% economic growth in 2021, but because Covid-19 in individual countries is hard to predict, businesses need to remain on their guard and stay resilient to disruptions.
To enhance business continuity, finance organisations must transform. They need to become more intelligent by building agility into the DNA of the organisation, and CFOs will have to lead this seismic shift.
What are the finance imperatives for the new normal?
- Build corporate agility
As the pandemic has altered behavioural patterns of consumers and businesses, organisations need to rethink their business models to address new customer and partner needs. In short, they need to become more agile.
Cloud adoption is a key part of business agility. Finance leaders need to digitise quickly and accelerate their journey to the cloud. Only then can they enjoy faster time-to-market, simplified innovation, easier scalability, and reduced risk. Cloud platforms can help deploy new digital customer experiences in days rather than months, and can support analytics that would be uneconomical or simply impossible with traditional technology platforms.
CFOs must be able to quickly assess priorities and potential outcomes to support the business. Prior to the pandemic, corporate spending was evolving as more and more employees were spending with less and less oversight.
As firms now find themselves in a constant state of flux and staff vacillate between working from home and working from the office, those changes are becoming even more dramatic. Finance leaders, for instance, should ask if they could support digital and instant payments, which has surged in the past year.
Integrated, ‘single-pane-of-glass’ finance solutions that streamline the spend management process would help CFOs negotiate some of these challenges. This could include platforms that support micro-services and consumer-grade travel, expense and invoice management for improved visibility of business spend for proactive management.
- Harness technology for finance transformation
As financial processes are largely manual today, businesses will need to review the gaps in their technological infrastructure and identify areas where automation can improve financial processes.
There is enormous potential for APAC organisations to simplify processes and drive greater automation and integration in travel, expense and invoice processes, for instance. Firms could also use technology to improve employee experience, and sharpen the organisation’s visibility into spending for better control and compliance.
A recent SAP Concur survey has found that as much as 38% of employees in APAC are still making expense claims manually today. This rudimentary approach is particularly prevalent in the Philippines (52%), New Zealand (47%), China (46%) and Hong Kong (45%).
Technology could be used to eliminate these manual processes for better spend control and user experience, as well as satisfy employees with regard to some of their biggest asks:
- Speed up the entire expense claim process (50%)
- Submit expenses anytime and anywhere via mobile apps (43%)
- Provide support for modern payment methods, such as super apps and cashless transactions (29%)
AI and machine learning, in particular, are changing the way enterprises and people work. In the finance and administration arena, AI and ML can help companies comply with global tax regulations, increase cross-border VAT reclaim potential, and monitor employee spend and fraud.
By continuously and comprehensively monitor transactions, for instance, AI and ML can identify hidden risks such as spend at inappropriate venues and fraud schemes, so that organisations can shorten auditing time and boost compliance.
Deployed optimally corporate-wide, AI and ML can help enterprises predict and shape future outcomes. This allows employees to perform higher-value work and create new business models that help the firm stay ahead.
- Rethink the future of work and its associated costs
Remote work will be the default mode of work for many organisations in the foreseeable future.
The same SAP Concur survey found that while 60 percent of APAC respondents said they feel more productive working from home, 34 percent of employees cited the loss of productivity during official work hours due to distractions as their top challenge. Therefore, companies are now at a point where they can adapt their operations to make remote work a boon to them or do nothing and let it become a hindrance.
Companies should reconsider what the future of work entails and its associated costs. For example, savings from real-estate costs should be balanced with that of IT infrastructure upgrades. Our APAC survey’s respondents, for example, want their employers to enable easy remote claims and travel management, improve collaboration, and provide better IT equipment and services.
The New Job Scope for CFOs
CFOs need to take the lead in this period of volatility.
As the driver-in-chief for the implementation of intelligent finance, CFOs should foster closer collaboration with the CIO and other C-suite executives, so that enterprise tech-enablement costs can be optimised and systemic risks mitigated. Ideally, CFOs should plan for the next three years and drive change management within the organisation.
Efficiency, agility and innovation are going to be more important than ever. CFOs must put in place the right processes and technologies to enable them to achieve these three qualities, so that they can help their entire organisation become more intelligent to meet the needs of a new era.
Laura Houldsworth is the Senior Vice President & General Manager, Asia Pacific Japan & Greater China at SAP Concur