How the finance function is changing in the new normal

The new normal has been one of the central talking points in the past two years.

Despite the many discussions it has played a leading role in, however, little is known of what the new normal really entails.

This puts companies and individuals alike in a position where they are making the rules up as they go along. There are no set behaviours or best practices for the landscape created by the global health crisis.

Despite the uncertainty that is the dominant feeling during this time, however, one thing that has emerged as an uncontested truth is the fact that business operations must evolve. Not just evolve in the way that all processes must at some point in their lifespan, but at a much more accelerated pace.

This is especially true for the crucial, core functions upon which the success of a business hinges on.

Finance is undoubtedly a value-driving force in any company. It follows then that this function will need to undergo a significant amount of fundamental change.

We may know this, but how can companies act on this information?

Finance transformation: A necessity

Despite the clarity with which we grasp the fact that operations must change to rise to the challenges that are bound to occur in the future, there can be no hesitation on the part of companies when taking on this responsibility.

The fact is that while many things have changed rapidly in the past twelve months in the business landscape, not everything has changed.

Most critically, the level of cutthroat competition in the global market has not ebbed.

This means that keeping up with transformative steps is not just a value-added step that helps you maintain your competitive edge, but a matter of survival, especially for contemporary businesses.

Companies need to revisit their strategies and be flexible and attentive to the changes that are, and may, occur in the future.

For finance transformation, this looks like digital transformation that aligns with specific financial goals your company sets itself. This transformation does not end with the technology you introduce to your processes.

Sustainable digitalisation has the potential to drive the overall transformation of your finance function. But in order to achieve this, your transformation must begin from the essential strategy that underlies your every business move.

In the new normal, especially, there is not much room for a company to make mistakes or an unwise investment. While missteps are inevitable, taking the time to assess the expectations you can understandably set for your transformation will help you make the right decisions, and make the most of your investment.

Discovering the power of outsourcing

Outsourcing is gaining popularity as a method through which a company can retain higher value addition internally while ensuring that more processes are completed by specialised external teams.

This move to outsource lower value-added, repetitive tasks has an immediate positive effect on your ability to innovate, create higher value addition, build internal specialisation, reduce wastage, and also leads to the more efficient allocation of resources.

These last two points concerning resource allocation is perhaps one of the more formidable challenges facing contemporary businesses. Resource scarcity and vulnerabilities in supply chains have sparked the need to make more sustainable and environmentally friendly decisions.

Outsourcing provides a route for companies to optimise the use of their limited resources, without needing to enhance their budgets or compromise on quality. This will be a strength that will see a sharp increase in demand in the new normal.

Centralising the human aspect of business operations

The new normal reminded us of the value of digitalisation, at a time when distance from each other was necessary.

In a somewhat contradictory development, however, it has also served to remind us of the irreplaceably human aspect of doing business.

In the future of finance, Finance 4.0 will inevitably strengthen its hold over global operations, but emotional intelligence and human relationships will see a similar rise in popularity and value.

Digitalisation is set to alleviate the burden and error-heavy process of manual operations and time-intensive tasks, freeing up the time of finance teams for higher value-added, innovative processes that offer opportunities for finance professionals to leverage and sharpen their skills.

Change is inevitable

Regardless of the finance transformation that has kicked into high gear in the new normal, and how quickly your company responds, the market will continue to change.

The business landscape is still reacting to the chain of events that first started in 2020. Even today, we see varying trends across countries coming to terms with the new normal, from the uptake of FinTech to more consciously ethical and sustainable business processes.

At this point, uncertainty is ruling the global landscape. This means that whatever steps companies take at this time must be backed by a robust crisis management and recovery strategy.

Having the support of a resilient framework and crisis management plan will inform the steps a company takes in finance transformation. This will help lead companies forward into a more stable future, despite the uncertainty of the new normal.