A new report by Workday, an enterprise finance and human capital software, has found that the finance function will dramatically change in the “next normal”.
Exactly one year on from when Singapore first imposed its circuit breaker measures in response to the COVID-19 pandemic, the report, Finance Disrupted: Navigating the Next Normal, finds most significantly that over four in five (83%) Singaporean finance professionals needed to do financial planning and budgeting at least two or more times in the year, to ensure their organisations remained agile and are able to adapt to the fast-changing business environment. This is compared to over half (54%) who did financial planning and budgeting only on an annual basis before the COVID-19 pandemic, where budgets are traditionally set out at the start of the year and adhered to throughout the twelve-month period.
The report also finds that at the height of the COVID-19 pandemic, the top concerns for Singaporean finance professionals were cost containment (78%), supplier risk management (61%) and revenue projection (56%). With so much emphasis placed on continuity planning for many organisations during the pandemic, it is unsurprising that there is an urgent need to contain costs and ensure that business revenue is not disrupted through supply chain issues.
For life after COVID-19, Singaporean finance professionals are shifting their priorities to address a technology acceleration gap. Finance digital transformation (71%), new driver-based models for scenario planning (65%) and cash and liquidity management (62%) are now the top priorities for many organizations.
Lee Thong Tan, CFO Practice Lead for Asia at Workday, said: “One year on from the height of the COVID-19 pandemic in Singapore, many organisations are looking towards the future and preparing for recovery. However there are still risks ahead for finance leaders who want to drive growth in a new world, but may still hold on to an old-world mentality towards financial management for their business.”
Tools and Technology
Singaporean finance leaders recognise the importance of their role in driving transformation. When asked what is most important for them to achieve in the next three years, the most common response was to lead organisation-wide digital transformation initiatives (38%).
Respondents also understood the positive impact of technology on their organisation. Over four in five cited artificial intelligence/machine learning (81%) as being most impactful in their industry for the future, closely followed by centralising IT support/software integration (80%) and mobile platform capabilities (75%). This is in line with Singapore’s transformation initiatives outlined in its recent 2021 budget, which saw S$24 billion allocated over the next three years to help businesses innovate and build capabilities in 5G, artificial intelligence and cybersecurity.
In general, organisations have effectively leveraged technology to support their finance function throughout the COVID-19 pandemic. Key areas include enabling frictionless finance (65%) through e-Commerce, internet banking and digital payments, and allowing organisations to retain the complete picture by improving connectivity (62%) in remote working, business development and internal communications. It has also provided an infrastructural backbone (45%) for many organisations such as through centralised cloud storage.
Data in a Changing World
Further, previously accepted conventions for compliance and data management have been made obsolete with the COVID-19 pandemic. The advent of remote working and new channels of communication have also posed new governance risks for many organisations.
A third (33%) of Singaporean finance professionals said that it was difficult for their technology systems to change in accordance to new industry regulations and demands. A similar number (32%) also find it challenging to change their organisation’s data protection policies.
Close to half (47%) of the respondents said they do not have the right talent or resources to ensure their data systems are compliant and up-to-date.
Lee Thong Tan, CFO Practice Lead for Asia at Workday, said: “Managing data has long been a complex issue, and this has been exacerbated further by the hyper-agile state of play in the next normal. As organisations recalibrate priorities in a fast-evolving world, investing in the right talent and tools, and having in place a robust digital-first culture will be crucial to build resilience and stay agile in the face of future crises.