Simplification of tools and processes for working from home is the most important lesson learned from the pandemic crisis by CFOs in the Czech Republic. 73% of respondents plan it as a long-term course of action for their companies after the crisis. The next items in terms of importance are a focus on automation with 47% and strengthening of cash flow management competences with 42%. These are the results of the Deloitte CFO Survey 2020. The eleventh annual edition of the survey took place in two waves – before the emergency situation and after the introduction of the government measures.
“Before the crisis, agile planning or forecasting were not the most important topic for CFOs. However, the current pressing need to make decisions on a daily basis requires fast assessment of various scenarios and changing variables in financial models. It is clear that this situation requires more robust technological solutions. Traditional planning tools are therefore often not enough,” says Ladislav Šauer, Partner at Audit, Deloitte.
“Automation of financial processes was a hot topic even before the crisis, especially because of the lack of qualified workforce. Now the necessity is even more pressing, since there is an increasing need to cut costs and use expensive resources efficiently. Another important aspect is decreasing the operating risk related to the unavailability of employees at the worksite,” adds Jan Voříšek, Director at Tax, Deloitte.
Companies have introduced many extraordinary measures as a result of the state of emergency. Based on Deloitte’s survey, they include primarily working from home (home office) for all employees (81%), cancellation or postponement of planned investments (57%) and preparation of short-term financial plans based on various scenarios (56%).
Preparing for a difficult time
The survey has shown to what extent CFOs’ opinions of their companies’ outlook have changed during the pandemic. Before the crisis, 29% saw them as rather or significantly less optimistic, now the number is 73%. Their level of external economic uncertainty rose by 31 percentage points in the past months to 62%. A larger amount of respondents expect a decrease in revenues (54%) and in the number of employees (48%) in the next twelve months.
The anticipated slowing down of the economy has forced the responding CFOs to reassess their strategic priorities. For 43% of them, the top priority is reducing costs, representing an 8 percentage point increase than before the crisis and as much as 28 percentage points compared to 2019. Talent development became one of the least important priorities.
“In these times of crisis, CFOs are particularly aware of how important it is to work on the company’s financial resilience in the long term. Resilience during crisis means the ability to make the right decisions quickly, among other things. In reaction to the current situation, many respondents are considering steps to strengthen competences and tools supporting quick management decision making. They include namely agile planning and forecasting, better management reporting, cash flow management and the related unavoidable digital transformation in finance,” adds Marek Kouřil, director in Deloitte’s Consulting function.
The changes in the responding CFOs’ opinions on risk factors in the next 12 months therefore come as no surprise. The leading factor is now the decrease in domestic (57%) and cross-border (51%) demand, exchange rate risk (43%) and economic outlook (31%). Last year’s major risk factor, lack of qualified workforce, is now considered significant by only 13% of respondents.