“Fortune befriends the bold.”
It’s ironic that one of America’s most famous poets from a 130 years ago can sum up how being bold can play a big role in achieving fortune, both financially and in life, and it’s still applicable today. However, it is important not to confuse boldness for carelessness or needless risk, two things that can quickly drain wealth and do damage to a company that plays it fast and loose. Rather, boldness suggests taking real action to achieve your companies’ goals instead of passively hoping they’ll happen. What that action is—investing in cutting edge finance reporting tools, adopting a more analytics based approach, or investing time and resources in an RPA play—is ultimately up to you.
With that being said, let’s look at the next five predictions for 2021 that finance decision makers, CFO’s and those that turn the wheels of progress, might be interested in.
6. Finance and Accounting Become Leaner and Meaner in 2021
Not to sound like a broken record but 2020 kicked people’s butts. With that said, cloud-based ERP, automation, and cognitive innovation will continue to drive opportunities to radically simplify certain processes that have dogged finance and accounting practices for years. To that end, adding distributed ledger protocol platforms, aka, blockchain, into the mix will only accelerate this cocktail of opportunity. As the momentum increases, the capacity of humans to add more value will be unleashed and thus 2021 becomes a springboard towards profitability.
7. Talent Collides with Technology in 2021
The sudden explosion in remote work models thanks to the pandemic has had a significant impact on how finance and accounting teams get their work done. And while many disruptions will eventually be behind us, the aftershocks will be felt for years to come. Because of the “new normal”, finance talent models are now evolving quickly, with a premium placed on data science, business analysis, and young guns who can deliver the goods fresh out of the elite business schools. This represents a dramatic shift for many finance organizations. The bottom line though is that implementing new technologies is relatively easy compared to changing your talent model. They’re obviously connected, but cultural and organizational shifts related to the workforce of 2021 and beyond may take much more time and care to get right. Those that can wear many hats move to the front of the line.
8. Data, Data Everywhere…
Which analogy works better?
- Samuel Taylor Coleridge wrote in the poem ‘Rime of the Ancient Mariner’ – “Water, water, everywhere, nor any drop to drink”. This analogy is used to suggest that despite being surrounded by something so vast and plentiful, you cannot benefit from it.
- In the 1975 movie Jaws, Chief Brody after seeing first-hand how big the shark is, looks at Captain Quint and says, “You’re going to need a bigger boat.” This analogy pointing to the fact that the shark is much bigger than the boat and more resources are needed, not the least being… a bigger boat.
Regardless of your selection of the perfect analogy, both apply to the fact that there is still an overwhelming volume of data that many organizations possess but are unable to harvest or adequately leverage because they don’t have the means or capacity.
Many companies simply don’t know how, or more importantly possess the technology and tools, to get to the next level of data nirvana. 2021 may be an inflection point for some (but not all) organizations when it comes to desalination of the ocean of data. AI, machine learning, and other cognitive technologies holds significant promise to begin to harvest the information from data that wasn’t available before. Companies that move now on analytics and AI based tools will roar into 2021 with new insights, new metrics, and seeing information that was never visible before.
9) RPA Will Go From 0 to 60 in Milliseconds for Finance Departments in 2021
If CFO’s have realized anything in 2020 it’s that their teams need have to fully embrace the rise of Robotic Process Automation (RPA). The impact of 2020 further heightened the need to minimize manual processes and costs. Automation will become a (work)output multiplier for the finance team in 2021. Increasing valuable outputs and reducing time wasted on repetitive, low value, and highly manual duties will be the mantra for the modern CFO. Automating as many processes and freeing up as much time to work on business strategies such as AI based forecasting-will at least ensure that the organization is lean, flexible, and competitive. Survival? That’s another issue.
10) The Role of the Finance Function Will be Altered Forever
Prior to 2021, changes were already occurring at a rapid clip for the finance function. As the pandemic disrupted organizations and whole industries and indeed the working world as a whole, the role of the finance function has been increasingly subjected to a shorter leash. Where once its remit was predominantly that of a reporting function that focused on balancing the books, it now has become a data-driven decision-center with implications that can make or break the business. As we head into 2021, the confluence of people and technology will play an increasingly significant role in executing many traditional finance tasks while at the same time generating greater insight. In 2021, it will be tantamount that you get your people, your process and your technology down pat for the long recovery ahead.
As we head down the stretch of 2020, there’s no doubt that in order for finance leaders to meet the challenges of a changing world, they must not only re-evaluate their own competencies, but also equip their departments with the right tools and the right blend of resources all while simultaneously surrounding themselves with the right team and the right technologies. Can it be done? Failure is not an option. Here’s to a clean slate in 2021.