The Key Trends in 2020 that Affected Every Finance Team
You probably don’t need reminding that the last 12 months have been tough for finance teams. Predictions and trends talked about at the start of last year were thrown out the window as the pandemic hit UK business and transformed sales performance, changed priorities and led to a whole different way of working.
However, looking back, 2020 was not without its finance trends and some of those that emerged through necessity, could well be here to stay for the long-term.
Here’s a summary of The Access Group’s top three:
2020 was the year that our working environment changed beyond recognition. From March, the vast majority of office-based staff were forced to work from home and, with various lockdowns and restrictions throughout the year, there has been little let up from remote working.
This change in our working dynamic can be seen through our business expenses. In fact, according to a report The Access Group carried out analysing expenses of more than 1,000 UK businesses, we found companies on average made savings of more than £49,000 a month in the height of the first lockdown. This figure illustrates clearly how differently we worked last year.
For a lot of people, the flexibility offered by homeworking has been a major benefit. Coupled with the fact that many businesses have enjoyed increased productivity and lower operational costs, it is not surprising that a survey of UK CEOs by PWC found 86 per cent believe we are seeing a long-term shift towards remote working. And, looking more closely at the finance sector, a joint report from KPMG and the Financial Services Skills Commission highlighted that one in two finance pros want to continue working from home after the pandemic ends.
So, what does that mean for businesses in 2021? Whereas a lot of quick decisions had to be made in 2020 to allow finance teams to be able to work remotely, now is the time to review these changes and assess if your technology solutions are viable for a long-term mixture of office-based and remote teams.
In 2021, effective and integrated CRM systems are likely to be a business necessity. Holistic views of the entire company, as well as individual divisions will be crucial for finance teams. See your CRM as an extension of your sales ledger and so your finance pros have access to real-time updates on customer summaries, order history and credit limits. Departmental silos need to be broken down and technology will need to be able to facilitate frequent and transparent communication.
Digital transformation has long been a phrase linked to the future of the workplace, but 2020 saw that future vision crashing abruptly into the present.
A study by McKinsey & Company revealed that the response to the Covid-19 pandemic has seen digital transformation strategies accelerate by an average of seven years in just a matter of months.
Teams now need to be considering just how much of this has been actual transformation as opposed to a redirection of company resources. Is there still more work to be done by finance teams to simplify legacy systems to make them more relevant to the ‘new norm’? Is it time to move beyond the cloud, or even introduce robotics and AI into your finance function? While 2020 was about embracing fast-paced change, 2021 will be about refining it.
Primary questions around your core system should focus on its integration ability and if it's offering the best service to the business at the lowest cost. I think we will see some legacy systems decommissioned in 2021 as the previous 12-months will have exposed the areas in which they are not fit for purpose.
The necessity for access to real-time data will remain a priority, with the adoption of more Saas-based models, facilitating service orientated architecture. Alongside this will be an evaluation of how staff resources are deployed, which is likely to lead to the increased use of AI in finance as bosses continue to realise that the automation of some manual tasks not only frees up employee time to focus on other key areas, but can also result in improved data integrity, improved efficiency and improved security.
In many respects, this should not be labelled as a trend but more a business necessity under constant review. However, the remote working practices and digital transformation of the past year has meant there was even more of a focus on cyber security in 2020 and with many of the working life changes set to be long-term, it will be even more critical in 2021.
PWC recently shared insight that suggests 96 per cent of executives have already shifted their cybersecurity strategy due to Covid-19 and 55 per cent of organisations will be increasing their cyber budgets this year.
When you are dealing with sensitive financial data, you can never be too careful. Again, this very much falls back to the question of legacy systems and you need to ask yourself, as information security risks have continued to evolve, has the approach your institution uses to manage them kept pace? No matter how large or small your organisation is, it’s an important consideration.
There are simple steps we can all be doing like ensuring antivirus and antimalware software is updated and understanding the threats your type of business is likely to face, such as hacking or ransomware attacks. However, your strategy needs to be even more robust, aligning it with business risks and presenting a clear roadmap to staff so they understand the risks the business faces, how those risks can be avoided and how it should be handled if a risk becomes a reality. This is even more important with a proportion of most workforces likely to still be working remotely.
Not every business will have the luxury of cybersecurity experts in-house, so maybe the start of the new year is the time to consult with your software provider and ask them to conduct a review of your IT infrastructure?
To find out more about The Access Group’s financial management software, visit: https://www.theaccessgroup.com/finance/.