Among its many influences on the finance function, the pandemic has brought about a shift in expected skills amongst workers. With the pandemic forcing finance to quickly adjust and adapt, many new finance hires are expected to bring modeling competency to improve predictive analytics capabilities.
Your next finance hires must be comfortable with modeling and can't just be proficient number crunchers, CFOs said in an Argyle Digital finance leadership webcast.
The pandemic has accelerated the need for analytical-minded finance staff who can incorporate internal and external data, including macroeconomic data, and use AI and other predictive analytical tools.
"Someone who can't connect the macroeconomic events to the financial impact would not be able to deliver [on expectations]," said Nayab Siddiqi, CFO of REZY360. "If someone doesn't understand risk, probability, and statistical techniques, they won't be able to create scenarios and translate those into probabilities."
Scenario planning has become a necessity
With the need for modeling skills comes the need for frequent scenario planning.
In these times, no single business forecast will play out. The best way to management is with scenario planning- CFOs have to create a scenario planning discipline in the organization.
Given today's uncertainties, you need to look at multiple scenarios to really cover your bases. It’s vital to run more than one scenario of what could potentially turn out.
COVID has made the financial planning and analysis (FP&A) function the hub of the continuous planning that organizations must do to survive today. Financial analytics tools therefore lie at the center of financial planning and decision making.
Finance teams are at the epicenter of this. You take the strategy that goes into the finance plan and then into the operating plan and you get those synced up.
The days of creating a static budget and annual operating plan are over. Organizations today have to do continuous planning, using a rolling forecast that updates with as close to real-time data as possible from the organization's business units.
Tough times, tough decisions
COVID-19 has disrupted business, requiring many CFOs to make tough and often painful decisions to preserve and protect their organizations. Mr. Gopal Mahadevan, Director & CFO, Ashok Leyland Ltd. discussed how top CFOs are striving to be better leaders in the Next Normal. “Transformation and information is the key. We need to communicate and engage with our employees. We brought a ‘communication plan’ in place to ensure continuity as well as health of our employees during these difficult times. Safety, liquidity, resilience and innovation are very vital for business. Cash is no longer the king, it is the oxygen for businesses in the ‘New Normal’.