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COVID-19 Impact Survey results: Is finance emerging stronger from the pandemic?

As 2020 drew to a close, we spoke to our global finance consulting leaders and clients to get a sense of how CFOs and finance functions have been impacted by COVID-19. The findings provided some clear messages, consistent across industry sectors and geographies, as well as a number of areas of focus for 2021.

First, the good news. With the vast majority of those surveyed operating either fully or partly remotely, more than 80% reported that their finance technology performed better than expected. Most systems and control environments have proved robust in the face of 2020’s extraordinary challenges. Core finance systems have held up well and the greater use of collaborative technologies such as video conferencing and cloud-based software tools have enabled finance teams to respond quickly to increased demands for analytic support around scenario planning, cash flow forecasting and supply chain management.

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Focus for 2021 - Continue to drive the use of collaboration tools across the organisation to allow people to work effectively in a hybrid remote environment. Improving quality and access to data will support the generation of business insights.

It’s also clear that many organisations don’t expect to go back to their former ways of working. Future finance functions will be leaner and much less dependent on physical location and proximity to the business than those of the past. The majority of people we spoke to said they were looking to drive greater efficiency and cost savings across their finance teams. More than 50% were looking to reduce headcount through continued automation and more effective ways of working. More than 40% are reappraising their property portfolios. A similar number are redesigning finance roles and restructuring to prepare for an operating model which includes long-term virtual working post pandemic.

Despite remote operations proving resilient, new ways of working are needed if organisations are going to thrive. Anecdotally, it seems that many finance functions have achieved success through the extraordinary efforts of dynamic individuals during the course of 2020. This is not sustainable in the long run and places too high a burden on individuals who should be nurtured by the organisation. Understanding who has made a difference and rewarding them accordingly, while managing up the productivity of the rest, will be key to long-term success. Identifying new operational measures, learning new ways of managing performance and developing new ways of working to drive productivity from the available collaboration tools will all play a part in delivering the full potential of finance if we are to draw any positives from these challenging times.

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Focus for 2021 - New ways of working need to be developed to drive efficiency and effectiveness. Productivity isn’t just about measurement and data though, CFOs need to focus on raising the performance of their teams as a whole. Emphasis needs to be placed on wellbeing and the longer-term career development of individuals whose roles are changing in the new finance operating model. CFOs need to identify the emerging skills and changes in behaviour required for success. 

It’s tempting to conclude that the need to face the challenges of 2020 has been a blessing in disguise for finance. It does seem that the response to the pandemic has accelerated changes which were already underway before the crisis. However, our survey responses indicate that there are significant challenges to be addressed before finance functions can achieve a sustainable high level of performance within a new, more remote model. Difficulty in predicting the path of the pandemic has resulted in tactical responses from many organisations, with one respondent commenting that there has been “little consideration for the future and potentially new opportunities to work differently”. On the flip side the pace of change has been rapid and one respondent commented “we have achieved in three weeks what people had previously said would take three years”.

Finance leaders may have stepped up in a time of need but now their teams are asking them to show clear direction for the future. 60% of our sample reported that they felt the culture of the finance function has suffered. Many commented that the relatively new focus on productivity during the pandemic was here to stay and twice as many reported that productivity had dropped compared to those who felt it had improved. This is as much a leadership and people issue as a process or technology challenge.

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Focus for 2021 - Leading organisations are already taking decisive action around their future operating model. Next year will give people time to experiment and innovate with different ways of working and new technology. Transformation is back on the agenda after having paused in the immediate response to the pandemic and CFOs need to take some bold steps to ensure their functions are fit to support the business in the future.

As the business environment rapidly changes, finance teams need to help lead the response. We are planning a larger study in March when organisations will have had more time to refine their understanding of this new environment to see how finance teams are adapting.

Contact us

Brian J Furness

Brian J Furness

Global Consulting Finance Leader, Partner, PwC United Kingdom

Tel: +44 (0)20 7212 3917

Gavin Hildreth

Gavin Hildreth

Finance Benchmarking Lead, PwC United Kingdom

Tel: +44 (0)7595 609676

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