COVID-19 has fast-forwarded the online digital transformation of your business. The government mandated social isolation orders to combat this pandemic has driven you, the CFO, to make unprecedented purchases of cloud-based software, security and video conferencing services to allow your employees to continue to work from home.
While this sudden shift has been difficult for all employees your office has the added burden of budgeting, managing and reporting on the material impact of this as a risk and an expense. And if your business is fortunate enough to have been able to weather this initial market shock, your next challenge may be to model the long-term demand side impacts to the economy that could materially impact your revenue.
Needless to say, there is more work ahead than ever for CFOs, both to maintain the day-to-day operations remotely, and perform complex forecasting and analysis. And with no way to predict the future and potential staff cuts coming in all facets of your business, agility is going to be key to responding to this continuing change.
Even before the advent of COVID-19, CFOs have been under constant pressure to reduce their office costs, of which 60%, on average, are labour costs (Source: CFO.com). There is also a significant performance gap in CFO operating ratios, with top performing CFOs offices costing 0.6% of revenue while bottom quartile performers costing 2.0% of revenue. With revenue uncertainty being the theme of the Q1 2019 earnings calls, performance against revenue in the office of finance is going to continue to be a growing concern.
The technologies and best practices to help close this performance gap are starting to mature. Cloud-based corporate performance management (CPM) software, artificial intelligence and blockchain are all understood as the next steps on the route to closing these performance gaps and to reducing CFO costs. Klaus Schwab, the executive chairman of the World Economic Forum underlined this fact in his 2017 book The Fourth Industrial Revolution, including predictions that by 2025 tax will be collected for the first time via blockchain and that 30% of corporate audits will be performed by artificial intelligence. The technology that will change the way we operate is available in the market, however that change is difficult for many CFOs to support.
CFOs have been candid in identifying the key barriers to embracing the tools of the Forth Industrial Revolution. These included addressing the underlying digital transformation required to leverage the tools, employee skill training and the appropriate allocation of time.
While we know that COVID-19 has already triggered an unprecedented acceleration in the online digital transformation of your business, it has to be also understood this is a shift that is unlikely to be stopped or reversed anytime soon. An interesting observation is that this shift to the home environment has made your employees no different from an outsourced employee. Look no further than the changes made by HR professionals who have had to hire employees without ever having to meet them in person. COVID-19 has led you to effectively outsource your employees!
Employee skill training is a huge part of any technology change. For example, getting your staff to understand artificial intelligence in the context of your available financial data, and how it can apply to either automate mundane financial analysis and reporting, or be implemented to detect financial errors, omissions or fraud is a challenging task. Doubly so if you have to do it remotely in the work at home environment. Estimates on the training and the change management required to change corporate policies and accounting methodology are easily 12-18 months from product launch to full-time usage; and that’s if it is successful in taking root with your current employee base.
Lastly, time is a significant issue in all finance offices, where 9 out of 10 CFOs struggle to stay on top of their current workload (Deloitte 2020). While most CFOs want to be spending time dealing with strategic direction and driving change, when polled it is clear they are spending most of their time reporting on their financial position and managing operations. It will be only with the introduction of the next generation of tools that CFOs will be able to free up the time they need to perform the work that is most important to them.
Helping CFOs overcome these barriers is the vision behind our company, Vigilant AI.
Our goal in starting Vigilant AI is to provide the services to allow you, the CFO, to immediately take advantage of the economics of hiring outsourced CPAs and financial experts who are pre-trained in the financial management and analytical tools of the Forth Industrial Revolution to immediately boost your organization’s financial performance.
Our understanding of financial data extraction, data security and the development of contextually relevant reports leveraging the latest analytic, machine learning and AI tools will allow you to cost effectively build the key insights into your business.
Most finance officers will pause all innovation during a crisis, returning to their tried and true financial accounting and reporting methods. This is precisely why contracting Vigilant AI resources, already trained on the technologies targeted to make an impact makes sense now. By bypassing the training cycle, you will be able to get meaningful financial insights in a timely fashion, freeing up your time to concentrate on more strategic priorities.
Vigilant AI resources can be contracted for one-time financial analyses or can be contracted to manage the data extraction and calculation of recurring analytics and dashboards for continuing use within your business. We will help your office answer your most pressing financial issue using the latest technology.
To arrange an online meeting, visit our Contact Us page.