With COVID-19 as the catalyst, CFOs and their teams are now preparing for the new age of finance post-COVID. What’s different about this “new age” vs. finance transformations of the past twenty years?
For most global organizations, post-COVID finance requires FP&A and accounting teams to move far ahead of the typical month-end reporting cycles. And certainly, wherever the “new normal” lands, finance teams need to think beyond simply automating key processes such as financial consolidation, reporting, and planning. Why? Because in this “new normal” world, finance and line-of-business teams need to lead at speed, acting on weekly or even daily financial and operational signals to drive performance.
And you just cannot do that by waiting until the end of the month. As Steve Jobs coined so well, “It’s time to think different.”
This is why I was so excited to host Trey Robbins and Glen Hafler from The Hackett Group for a recent webinar and discussion on pre- and post-COVID-19 finance.
The Hackett Group (NASDAQ: HCKT) is an intellectual property–based strategic consultancy and leading benchmarking and best practices firm to global companies, with offerings that include smart automation and enterprise cloud application implementation. Its services include business transformation, enterprise analytics, global business services, and working capital management.
The Hackett Group has completed more than 16,500 benchmarking studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 89% of the Fortune 100, 83% of the DAX 30, and 57% of the FTSE 100. These studies drive its Best Practice Intelligence Center™, which includes the firm’s benchmarking metrics, best practices repository and best practice configuration guides and process flows, which enable The Hackett Group’s clients and partners to achieve world-class performance.
Here are the highlights of the webinar:
COVID-19 Impact by Industry
After my short introduction to OneStream, Mr. Hafler shared the results of Hackett’s 2020 COVID-19 Poll, beginning with a summary of COVID’s broad impact on finance teams.
According to the survey, about half of organizations (see Figure 1) were negatively impacted by the crisis financially and/or operationally. And though the impact to operations is expected to stabilize over the next 3 months, over 50% of respondents are anticipating the financial impact to worsen over the same time span.
The survey data suggests that COVID’s damage is pronounced in specific areas of the market. Why? Because segments such as consumer durables, services, and retail (see Figure 2) rely on consumer health, confidence, and consistency, all of which eroded rapidly when the world shut down to flatten the curve.
Key Finance Findings
Next, Mr. Hafler discussed how finance leaders responded to COVID’s unprecedented disruption. To illustrate, Mr. Hafler presented Hackett’s key finance considerations across four categories which are included below:
Mr. Hafler then shared best practices for finance teams to consider as they evaluate investments into corporate performance management (CPM) processes such as planning and reporting.
Rationale for Improving CPM
According to Hackett’s research, despite the impact of COVID-19, world-class organizations are investing into their planning and analytics capabilities. Figure 4 below illustrates some key metrics on the improved finance function effectiveness of organizations with world-class CPM (vs. the peer group):
Mr. Hafler concluded his presentation with a deeper dive into Hackett’s best practice research. Here are just a few of his key points:
Trey Robbins then closed out the webinar with a discussion of key marketplace trends and expectations. What’s at the top of the list?
Mr. Robbins expects organizations to continue to invest into their planning platforms and take steps to drive speed-to-value in planning. How? By implementing planning in parallel with financial-close processes vs. phased implementation. As finance teams evaluate their planning processes, he also expects more focus around cash planning, as well as additional interest in account reconciliations and workflow capabilities to help enable a virtual workforce.
Best Practices Assessment
So where does your organization stand among your peers? Are you a top performer or in the middle of the pack? To benchmark your organization, you may want to consider any of Hackett’s digital transformation platform offerings, noted below in Figure 5:
While it’s important for a finance team to continually reflect on continuous improvement opportunities, remember, learning how you stack up against your peers is only part of the journey. As COVID-19 has taught us, there’s no such thing as a perfect plan.
But as Hackett’s research and OneStream customers make clear, organizations that are willing to take steps towards transformation do ultimately outperform their competitors. Why? Not because every forecast is 100% accurate or because every process is best-in-class, but rather because these organizations value increasing the potential and capability of their finance teams to step up when it matters most. To earn and a seat at the strategy table and help guide their organizations get the big decisions right, not just in crisis situations but as part of the proactive, collaborative, and continuous process that is post-COVID finance.
Now that’s leading at speed.
To learn more about OneStream and Hackett’s research, watch a replay of the webinar here.