Weathering economic downturn in 2023 using digital transformation

Priorities for CFOs in 2023: Using technology to overcome turbulent economic conditions

February 3, 2023

With persistent inflation, looming recession, supply chain issues, geopolitical unrest and a tight labour market on the horizon, companies are looking more and more towards CFOs to help weather the economic downturn.  

A number of studies are suggesting in the coming 12 months, CFOs should prioritise the focus on technology to overcome the economic turbulence.

Here are a few key areas that could lead the way: 

Navigate economic uncertainty  

The turbulent economic times require businesses to not only keep their eye on the happenings of today but also solve the problems of tomorrow. It reinforces the need for effective and accurate forecasting.

Almost half the executives from Fortune 1000 companies prioritise the use of predictive models and strengthening of scenarios analysis capabilities to prepare their finances for the future, as per a PwC study.  

Predictive models take diverse datasets and employ machine learning to foresee future outcomes. With such insights, firms can take quick, informed decisions to proactively tackle changing economic situations and reduce unexpected shocks.

Looking ahead, modern CFOs should lean more towards more agile, data-driven scenario planning to map out looming market risks. 

However, to predict reliably, you require reliable data and relevant models. For executives testing the waters for the first time, pre-configured models in business tools such as Microsoft’s Dynamics 365 Finance can help finance teams test the performance of each model before putting it to work.

Maintaining agility of your firm can thus bolster its resilience for long-term growth and success.  

Lead through data  

The global volume of data is growing at a startling pace every year. Worldwide data is expected to reach 175 billion terabytes by 2025 with roughly 66% annual growth from the 2018 rate. With the amount of data available, its complexity and importance has also grown.  

In the future of finance, CFOs need to have access to the data across the entire business to make informed decisions. Finance departments, too, will be tasked with collecting and processing increasingly complex datasets while maintaining a singular source of truth to provide actionable insights for the entire organisation.

Making use of accurate and timely reporting, a common data layer can be implemented across the firm that is consistent yet flexible enough to account for changing needs.  

With the use of technology, CFOs should be able to visualise the reporting data to make better sense of the information and tell a compelling story based on it to communicate goals and drive business strategies.  

Derive business value from tech investment 

Leaner times signal less margin for error and call for reduced spending. However, selective investment in technologies can increase efficiency and provide reliable returns that can set firms up for sustained future success. Even during the pandemic, companies that invested in technology are seeing five-times faster growth, according to Accenture.  

Today, it is imperative for firms to go digital. Most are struggling to chart an effective course amid all the rapid digital transformation around them—an average company uses 976 applications for its operations.

Digitisation, standardisation and automation has become crucial to streamline operations and ensure lasting success. A shift in data driven financial planning and analysis (FP&A) assisted by the right tools with an intuitive platform sets in motion the true transformation of a business. CFOs can lead the way.  

A successful tech investment must build a sustainable, scalable pipeline and improve deal closings. Integrated software solutions facilitate centralised data and cross-collaboration to improve efficiency and also provide a more customer-focused 360-degree view.

The right technology for your business can help you cut costs, improve efficiency and add value while building resilience in these tumultuous times.  

Prioritising talent recruitment and retention  

The pandemic has passed but its impacts can still be felt in the labour market. Hiring and retaining staff is still a difficult task for most businesses, especially in the case of employees with a diverse skill set.

When Gartner recently polled 234 CFOs, more than half stated the issue as their major concern for 2023. As more firms further rely on forecasting, the crunch is even greater for finance talent adept in data analysis, predictive modelling and its related technologies.  

The finance function is evolving with the times and with it the required skills of its workforce.  

Finance leaders can take this situation as an opportunity to selectively hire employees with skills needed for the future as well as build on the skills of their existing staff. By focusing on analytical skills of the workforce and powering them through the use of technology, companies can remain agile and proactive.   

Upskilling your staff not only builds on the capabilities of your existing workforce, it also helps retain stable teams that can collaborate across the organisation.

Automation technologies and chat tools can free up the time of your staff and enable them to focus on higher-value work while improving communication and reducing silos across the organisation.

Tools such as Dynamic 365 Business Central and Dynamics 365 Finance allow departments to collaborate seamlessly with Teams integration and automate tasks with machine learning.  

According to a 2021 PwC study, firms see 27% less turnover when they invest heavily in upskilling. Focusing on your staff can then mean an investment that fosters loyalty in this changing economic landscape.