Fifty-four percent of CFOs are concerned about their organization's viability through the economic downturn, and 51% are concerned about increasing risk exposure resulting from new modes of working, Everest Group and WNS Global Services' Global CFO Survey 2020, released Thursday, found.
"Only about 21% of respondents said they have a large appetite for making investments," Krishnan Raghunathan, head of the finance & accounting practice at WNS, said. "The remaining 79% said they're being very cautious with investments at this time; both groups can make their organizations future-ready; the [ability] to invest at this time should not be stopping you."
Sixty-two percent of CFOs said implementing a work-from-home model for the foreseeable future is a significant priority, and nearly half are focused on liquidity. Overall, four in five organizations reported material business disruptions, and more than 55% of CFOs said their company's 2020 revenues would be at least 3% lower than in 2019.
The survey aims to understand the pandemic's impact on the business environment, how CFOs are perceiving their role in a post-COVID-19 world, and what the building blocks are for a future-ready organization. Responses were from more than 300 CFOs across the globe in more than 20 industries.
Global organizations faced higher disruptions than did regional ones; at an industry level, travel and logistics experienced the most disruptions while healthcare and life sciences had the least, with financial services following close behind.
CFOs' short-term and long-term concerns differ across industries. Company viability through the economic downturn (including customer credit worthiness) is the primary long-term concern, followed closely by increased liability and risk due to new modes of working and relevancy of the existing business model in a post-pandemic world.
When it comes to ensuring a company is ready for 2021, there are only so many areas in which CFOs can take the lead, given their already outsized responsibilities across the organization. As such, they are prioritizing rethinking business strategies, identifying cash flow improvement opportunities, reviewing compliance and risk mitigation controls, and reducing operational costs.
The adverse effects of the pandemic have varied based on company size and industry, with travel and leisure industries lagging behind banking and finance on the road to recovery, the survey shows. Regardless of industry, and regardless of how 2020 panned out for his or her company, all CFOs agreed future-proofing is essential. External factors, such as permanent changes in regulations and compliance, are seen as the strongest bearer in the new normal business environment.
To deal with long-term concerns, more than 50% of CFOs see speed, agility, and digital enablement as key characteristics of future-ready organizations. CFOs with negative revenue impact are focusing more on improving cash flow compared.
Becoming a future-ready organization doesn't require heavy investments; that's a myth, Raghunathan said.
"The CFO's role has always been as a strategic partner to the business, and now, it's becoming even more strategic, in terms of how they're enabling the enterprise to operate as one office," Raghunathan said. "And essentially, that means looking at more integration of end to end functions across the organization, which is becoming more pivotal."