While the pandemic has accelerated digital transformation activities, it has also brought to the fore the need to meaningfully push forward on integration of social and environmental risks and opportunities into the core of business models. And to do so fast.
In a post-pandemic world, business models that fail to authentically integrate the risks and opportunities related to how organisations deal with social and environmental issues, and their financial and ethical considerations, will lose out to those that do. Finance teams have a key role to play in driving this integration across organisations.
Association of Chartered Certified Accountants produced two insights papers that touched on this subject, the Covid-19 global survey and the Road to recovery report.
Amongst the findings:
- 80% of business leaders predicted a significant downturn in expected revenues and profit year on year
- Over one third of organisations had at the time of the report experienced cashflow problems
- Almost half of the businesses had not undertaken a reforecast impacting ability to plan
- Almost one third of organisations had no business continuity plan in place, 40% of smaller organisations agreed with this
We are never too far from the implications of the digital transformation on working and private lives. Very few things that we do fail to leave some kind of digital footprint. Whether we like it or not, as accounting and finance professionals, digital is changing the world. The skills that we need to be successful are at the heart of modern business.
Two recently launched Association of Chartered Certified Accountants Professional Insight papers: Digital leadership and Leading finance digital transformation, were developed jointly with Alibaba Cloud. They were developed from the CFO and finance leadership perspective and the digital accountant.
Amongst the findings:
- 70% of organisations either have a digital strategy in place or are working on one
- 60% of companies that have undergone digital transformation have created new business models
- Companies that gross over $1B a year earn an additional $700M over three years from that investment
The above gives an indication of how technology is seen as an enabler for business to move forward. Technology and data in combination are key to organisations understanding performance and compliance. Having data that is accurate and spans the breadth of the strategic goals and operations of the organisation is essential. Accountancy and finance professionals need to embrace data and use it to be able to forecast performance and compliance as well as to understand the past.
The application of technologies that facilitate that process is essential. This facilitates finance teams being at the heart of strategic decision making; decision making that embraces not only financial performance and compliance, but also across other areas such as human, natural, intellectual and manufactured capitals.
- Technology and data in combination are key to organisations understanding performance and compliance.
- Having data that is accurate and spans the breadth of strategic goals and operations of the organisation is essential.
- Accountancy and finance professionals need to embrace data and use it to understand the past.
- Business models that fail to integrate risks and opportunities and financial and ethical considerations will lose out.
- Finance teams have a key role to play in driving integration across organisations.
Accountancy and finance professionals need to embrace technology and data and use it to be able to forecast performance and compliance.