7 ways CFOs can strategically plan for growth in unpredictable times
Navigating the uncertain waters of a volatile economy is a daunting task for Chief Financial Officers (CFOs). To ensure their organization's long-term success, CFOs need to effectively implement strategic planning and financial cost control measures to prepare for future growth. This blog post will discuss 7 ways CFOs can strategically plan for growth in unpredictable times. By utilizing these methods, CFOs can aim to ensure their organization's continued financial stability and long-term prosperity.
1) Look at the big picture
Looking at the big picture when planning for future growth is going to be key for CFOs. Technology can play an important role here. By providing financial planning and analysis tools, a CFO can track past performance and make better-informed forecasts for the future. This includes taking into account both the current economic situation and the organization's future performance. With this insight, the CFO can balance preparation for a recession with strategic planning beyond any downturn. According to Raconteur – The Future CFO March 22, 94% of CFOs expect investment in digital technology and assets to increase in the next three years. By making the most of technology and analyzing the organization's past performance, a CFO can plan effectively and strategically to secure growth even in unpredictable times.
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2) Understand your customer
A sharp understanding of your market and customer base is essential to robust financial planning and analysis. Doing so means you can easily identify patterns and synergies to support market segment growth and target customer acquisition opportunities. Take advantage of technology to collect, analyze, and gain insights from customer data. This will help you get a better understanding of customer trends, preferences, and behavior. With that information, you can more effectively allocate resources and budget to the areas with the highest potential for growth.
3) Get comfortable with risk
With an unclear future, there is a need for solid scenario management and contingency planning. Financial planning and analysis (FP&A) is more important now than ever. Organizations need to be on the ball when it comes to the risks of being unprepared for the “known unknowns” that will arise and understand how to prepare for them. By having the right FP&A solution and reviewing plans regularly, companies can become more resilient to inevitable changes. With the right preparation, they will be better equipped to navigate the unpredictable times ahead.
In terms of technology solutions, it is important to choose an FP&A platform that allows for easy changes to the data and multiple scenarios and contingencies. The best solutions support continuous planning, help teams collaborate better, and provide real-time visibility into the financial position of the company. This can help ensure that any potential risks or changes are identified quickly and that the right adjustments are made rapidly and accurately.
4) Prioritize innovation
In the past, CFOs have focused on strategic planning and financial cost control, but now they have to also consider juggling strategic delivery, operational efficiencies, inflation, providing accurate data and information, and driving growth. To do this, CFOs must prioritize innovation and find ways to use financial planning and analysis to identify patterns, analyze performance, and predict future trends. They should focus on data-driven decision-making and come up with financial plans that are agile enough to quickly adjust to changes in the economic environment and shifting customer demands. This will help ensure that the company is prepared to take advantage of any opportunities that may arise.
5) Manage cash flow
Managing cash flow is a critical part of any business's success. To plan strategically for growth, CFOs should focus on improving their cash flow by taking measures to control costs and optimizing, rather than cutting, existing resources. This requires careful financial planning and analysis. For example, spend analysis tools such as Scanmarket can help identify areas where savings can be made without cutting back on important resources. Additionally, modern financial management solutions such as Unit4 FP&A can help automate and streamline the process of tracking cash flow. These tools enable CFOs to gain insights into the financial health of the organization and make adjustments to their plans to respond to changing economic conditions.
6) Invest in your team
A fully integrated FP&A solution is an essential tool to ensure business success, especially when times are unpredictable. Investing in your team and giving them the right financial planning and analysis capabilities can help you anticipate any potential disruptions and manage risks proactively. FP&A will also help you create a long-term plan that takes into account both short-term disruptions and long-term growth strategies. This will ensure that the organization is always prepared to react to changing market conditions while staying on track with overall growth objectives.
An integrated FP&A solution produces relevant inputs and robust analyses, which will help create more reliable scenarios and forecasts. With this knowledge, CFOs and finance teams will be able to identify and access data related to expenses and revenues across the different areas of the business, including supply chain and procurement, services, talent management, marketing, IT, treasury/cost of capital, and more. This will enable the FP&A function to be seen as a credible, collaborative, and communicative source of information.
7) Focus on what you can control
Focus on what, as CFO, you can control. Start by asking questions like “what financial resources are available?” and “what investments need to be made?” Once these questions have been answered, it is important to review your findings and make appropriate adjustments accordingly. FP&A should also be used to develop effective short-term and long-term goals that are realistic yet ambitious, keeping the business’s current financial standing and future objectives in mind. By performing financial analysis regularly, CFOs can identify potential areas of improvement that may not have been initially considered when planning for growth. Additionally, forecasting and data modeling techniques should be utilized to identify and analyze financial trends that will benefit the organization in the future.
How Unit4 can support planning for growth in your organization
Unit4’s People Experience suite is designed for organizations like yours. This comprehensive solution gives you the tools you need to become the strategic CFO of tomorrow, no matter how your role evolves or grows.
Visit our Office of the CFO page for more information.
