If we have learned anything over the past two years, it is that no matter what we think is going to happen, the reality will almost certainly be different. COVID-19 has proved this, testing our resilience and adaptability to the utmost.
However, as finance leaders we have risen to the task of managing the shutdowns, as well as the changing dynamics of the workforce and the marketplace. We have learned that we may work outside the office and still be productive. We have learned that we can change our business models for the better. We have learned not to avoid new technology but to marshal it to meet our needs. We have learned the power of scenario planning as we navigate uncertainty.
For many, technology has been a financial saviour, for example, helping some businesses cut back-office costs, according to a member of our Europe Regional Advisory Panel (see "How European Companies Are Embracing Hybrid Working, ESG", FM magazine, 24 August 2021, www.fm-magazine.com). The tech advance has brought welcome savings — a dividend. However, it is not a good idea to simply bank that money. Instead, look at where you could invest it to help you build business resilience. You do not create value by simply reserving your resources, but by using them well. Finance has a key role in getting resources to the right parts of the business at the right time.
Management accountants should help their organisations and clients invest in technology and human capital to do more than return to "normal". The world has been through profound changes, and finance needs to recognise that and reflect the future vision in all that it does.
A McKinsey survey of executives (available at www.mckinsey.com) found that during the pandemic, companies accelerated the digitisation of their customer and supply chain interactions and of their internal operations by three to four years. I have read commentators who believe that it might be as much as seven years. These crisis-related changes are likely to be long-term.
Finance leaders should be at the forefront of helping businesses make decisions on technology investments for their organisations.
So which technology should you focus on? That depends on your business. Currently, artificial intelligence (AI) is being used extensively by accounting and finance professionals. AI has been a long time coming to our industry, but it is an example of the right resource being in the right place at the right time.
Next, implementing the right resources can be as challenging as choosing them. It is as much about bringing your staff with you as embedding a new technology. Our report Finance Transformation: The Human Perspective (available at www.cgma.org) offers tips to help:
- For finance transformation programmes to deliver optimum results, investment in the workforce must be a priority. Ensure your teams have the right mix of digital, technical, business, and people skills to deliver. (Columnist David A. J. Axson makes similar points in "Finance 2022: The Time for Talent" on page 8.)
- Skills gaps are evident at all finance levels, but the most significant gap — digital skills — pervades all finance roles. Close it with a clear focus on skills training. This will develop and retain existing staff to work effectively with emerging technology and build a more committed and engaged workforce.
- Support your team to develop a growth mindset through building data literacy, competence, and expertise, and encourage workforce collaboration and communication.
Is the current technology sprint going to become a marathon? Only time will tell, but the pandemic has shown us the brutal economic consequences of not being in the race. Plan your technological future now and grow your digital mindset.
Andrew Harding, FCMA, CGMA, is chief executive—Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA.