Building financial resilience

In the rapidly evolving business landscape, CFOs and FDs tell us their biggest challenges (from enhanced data analytics to financial planning and analysis and cloud-based applications). But how do you align people, processes, and technology? On 14 September, clients in the finance and accounting industry joined a new series of webinars organised by Protiviti and Robert Half - global leaders in talent and consulting solutions.

The first session led by Michael Melrose, a Protiviti specialist in finance transformation, looked at what running a resilient, sustainable function means and how organisations can manage and drive change effectively.

Financial resilience is the ability of an individual/business to carry on or roll with the punches irrespective of the impact on operational workings or assets. Many businesses report that the biggest risks related to resiliency are business growth and the ability to scale it.

Protiviti’s 2023 Top Risks Survey found that the risks faced by CFOs include:

Organisations' succession challenges and ability to attract and retain top talent

Economic conditions in markets currently served may significantly restrict growth opportunities

Anticipated increases in labour costs may affect ability to meet profitability targets

Resistance to change operations and the business model

Uncertainty surrounding core supply chain ecosystems

Changes in the overall work environment may lead to challenges in sustaining culture

Organisations' culture may not be enough to identify and address risk issues

Organisations may not be sufficiently resilient and/or agile to manage an unexpected crisis

Many companies state that one of the biggest factors in not being able to drive change and build resilience is a lack of resources, both in terms of people and technology. To combat this, it’s important that businesses implement the right building blocks and promote a vision to build financial resilience.

First, it starts with setting the right foundation by creating the time and headspace for change and transformation. Companies should then create a prioritised list as this allows them to focus on the right achievable targets going forward. Finally, they should then work either in-house or externally to select the correct delivery approach.

Taking all the above into account, building financial resilience also requires focusing on incremental, small bits of change to quickly drive value as well as being open to newer ideologies that can help to fuel innovation. There’s now an increased requirement to be more agile in the design and thought process. Many businesses have praised newer methods like journey mapping and hackathons that have helped to fuel innovation and push them on in achieving the required results.

Responding to change with speed requires a slightly higher allowance for error but can be benefitted by an informed roadmap of options to guide decision making alongside a heightened focus on assessment and feedback. Prioritise a regular feedback loop of both quantified results and qualitative input from operating teams and stakeholders in order to fine-tune responses and make appropriate adjustments to maximise the impact of changes.

Embracing technology and data is another avenue. Finance RPA can drive greater efficiency, compliance and productivity. Robotics Process Automation technology usually costs one third the amount of an offshore employee and one fifth of an onshore employee. According to Gartner, around 80% of finance leaders have implemented or are planning to implement RPA. Still, adoption of new digital technologies and cloud remains a challenging feat.

Businesses that not only survive but thrive in this unpredictable economic environment are aware of why it’s important to build financial resilience. And none categorise this more than the importance of people.

According to Protiviti’s global finance survey, the biggest concerns for 2022 were:

Rising cost of wages (37%)

Ability to retain people (36%)

Ability to recruit qualified candidates (33%)

Building and maintaining culture amid hybrid or remote working model (33%)

Resources for recruiting - internal and external (33%)

Among the strategies CFOs and finance leaders are employing to obtain needed talent and skills are the increasing use of technologies and automation, upskilling and reskilling staff, implementing flexible work arrangements, and increasing use of managed services providers.

Financial resilience is essential to building a viable business model sturdy enough to navigate this period of great uncertainty. Leaders need to adopt an agile approach to change management by responding to unfolding challenges at speed, prioritising relationship management and future-proofing their decisions. Resilience and perseverance – especially after setbacks – are among the most important qualities of a good business. This is the only way they can cope with and overcome the unavoidable challenges and setbacks that are seen in day-to-day business.

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