The challenge for CFO’s: Understanding the new normal
As businesses prepare and deliver new steps for the future, many planning professionals suggest that we shouldn’t expect a return to the past. CFO’s across multiple industries are implementing a number of strategies to ensure their business can continue to survive financially during the downturn. They are also exploring various scenarios of how to progress when restrictions are eased and we begin to emerge from the pandemic. If done correctly, CFOs have the opportunity to position their business for higher success right from the beginning. However, if the right steps are not taken, businesses may struggle to recover from the crisis.
Baxter Orr, the global head of CFO practice for Anaplan recently explained to CFO Dive that it is clear the downturn will end but what is unclear is what the ‘new normal’ will actually look like. A recent report by Gartner revealed that over 60% of CFOs intend to maintain over 5% of their staff working remotely because the downturn has shown the effectiveness of having a segment of people working from home. With better technology and products, remote staff can save money and maintain higher productivity levels.
Alexander Bant, the VP of Gartner’s finance section explains that the majority of CFOs understand that technology and society have transformed to allow remote working to be more feasible for a wider range of positions. The challenge is understanding new ways of working and what methods of engaging with customers will work for businesses and at the same time understanding how the pandemic will transform people’s behaviours for the future.
In reality, there are endless scenarios covering how many of us will go back to work, what safeguards will be implemented and how the working environment will change. In order to answer these questions, we need to avoid looking at previous data that does not accurately represent the period we are in and the times ahead. In a very short space of time industry perspectives have completely transformed, business strategies and people’s behaviours are changing.
Incorporating new data, AI predictive analytics will enable CFO’s to model potential new environments. Predictive analytics, in particular, can provide clearer insights into customers behaviour and business changes. Leading organisations are exploring more useful insights such as what customers are currently talking about and what topics people are researching online. CFOs can use this valuable information to generate models to have a clearer understanding of customer behaviours in the ‘new normal’.
This approach will also support businesses by providing insights into existing customer pipeline. If sales are on the decline, businesses need to ensure their sales team are focusing on the right customers. This means assessing productive leads and customers who are more likely to renew and purchase additional services. CFOs can utilise this information to understand what changes need to be made and to ensure the wider business plan is optimised to deliver higher revenue and reduce ‘unreliable’ customers. Businesses need to consider their pipeline carefully, especially during these next few months. Insightful data can provide clarity on what potential customers are doing and enable you to determine what resources are needed to deliver an effective sales strategy.
Any decision, whether it be for now or to position a business for a post-COVID world isn’t easy. Altering plans can be challenging and mean shifting resources from one area to another but utilising data insights and predictive analytics can streamline and ease the entire process.