As CFOs make plans for the next 12 months, it’s fair to say that an array of challenges awaits, each demanding careful consideration and strategic foresight. Most are not even new challenges; they are the same ones that have persistently hung around over the last few years – namely economic uncertainty, inflation, cybersecurity, and global talent shortages.
In order to make profitable growth decisions and emerge from the latest downturn in a better and healthier position, forward-looking finance leaders are concentrating on refining their strategies to counter inflation’s impact, discern between the right and wrong costs to cut, and understand what portions of the business would benefit from the efficiencies offered by digitisation.
This blog is written for future-focused finance leaders seeking tech-led solutions to help them leapfrog their toughest challenges in 2024.
Aligning financial strategy with organisational objectives
Before diving into the top challenges of 2024, it’s important to note that no business segment is an island. Making smart, data-driven decisions about a company’s overall leadership, goals, strategy, and technological aspirations requires close collaboration between CFOs and CEOs, COOs, and other C-suite members. By engaging in open dialogue and aligning financial strategies with these objectives, CFOs can ensure that all future financial decisions contribute directly to the organisation’s success.
Agility and efficiency to navigate economic uncertainty
In 2023, many economists predicted an economic recession by year’s end. Now, well past the halfway mark, the economy has shown remarkable resilience. Despite avoiding an official recession, market volatility and economic uncertainty will most likely continue well into 2024.
Planning for supply chain efficiency in a period when profitability is scarce is of critical importance. In collaboration with COOs, CFOs should be taking a fine-toothed comb to their supply chain strategies with the goal of adapting and optimising for changing market conditions. This may involve leveraging tech to better understand and optimise inventory levels and efficiency of deliveries, nurturing stronger relationships with dependable suppliers, and using automation to accurately perform manual supply chain tasks. This combined effort will ensure that operational decisions align with financial realities.
In fact, initiatives to improve efficiency should be at the top of any finance leader’s to-do list. Efficiency is, after all, about doing more without necessarily increasing input costs at the same rate.
Efficiency-driven transformations are deeply intertwined with technology. The integration of modern solutions has the potential to completely overhaul financial management for the better. The right tech can enable CFOs to allocate resources with precision and extract maximum value from each operational aspect. For example, introducing advanced data analytics and artificial intelligence will unearth previously elusive insights, allowing for smarter decision-making and strategic resource allocation.
Modern cloud platforms offer a multitude of other capabilities to streamline budgeting, forecasting, and reporting processes, enhancing accuracy and reducing manual errors. They can also facilitate seamless communication between departments, fostering quicker decision cycles and keeping financial strategies aligned with overarching business objectives.
Establishing sustainable finance practices
Sustainability is not only a social responsibility but also a smart business move – even in more uncertain times. Cloud ERP systems, for example, provide the technological foundation to seamlessly integrate sustainability considerations into financial decision-making processes. Real-time data and insights allow for the identification of sustainable investment opportunities, reduction of operational waste, and optimisation of resource allocation, all of which contribute to enhanced reputation and financial resilience.
Ensuring cybersecurity and data privacy
CTOs, CFOs, and CEOs must show a unified front in the face of escalating cybersecurity threats – up 38% in 2022* – and showing no sign of abating onto 2024. This may mean evaluating and implementing technologies such as AI-driven threat detection, blockchain-based data encryption, or cloud-based solutions to enhance data security, enable secure storage, and access controls. The unified front should also extend to data privacy concerns. Increasingly, data protection regulations – such as GDPR – are making organisations accountable for customer privacy. Given the CFOs role in allocating resources for privacy-enhancing technologies and compliance measures, having a solid understanding of the security landscape and technology’s ability to protect sensitive financial data is a skill all CFOs must possess as we move into 2024.
* Source: Security Magazine
Developing and retaining top talent
In addition to the economic difficulties forecast for 2024, businesses are still facing serious problems when it comes to talent acquisition and employee retention. A recent Gartner survey indicated that CFOs are struggling to find people with the right skills to staff their departments*.
To avoid the cost and losses associated with high turnover, CFOs will need to continue to invest in attractive benefits packages and incentive programs, create pathways for career growth, and foster a culture of innovation. Refining their employee value proposition (EVP) to facilitate a more flexible office will also limit the job-hopping. And finally, investing in modern tech will better meet the needs of younger workers who have grown up with smart, intuitive tech and expect the same at work.
* Source: Gartner
In summary
In 2024, the challenges that CFOs face are emblematic of the broader landscape in which C-suite executives operate. But by fostering collaboration across the C-Suite, CFOs can craft holistic strategies that address financial and technology challenges while propelling the entire organisation forward.
Dive deeper
The strategic digital CFO: Navigating economic uncertainty explores the top trends, challenges, and the role technology will play in fostering innovative cultures, enabling tech-driven finance teams, and facilitating strategic decision-making to successfully navigate 2024.
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