While Circa 2020 marked an era of dramatic change, second wave in 2021 had a catastrophic effect on our economy. All hopes on the recovery were pinned on India’s successful vaccine rollout.
In the beginning of 2022, Omicron led to the fresh dent in economic activities. However, according to a report by Acuite Ratings and Research, the magnitude of the adverse impact was much lower as compared to the previous pandemic waves given less severity of infections amidst robust vaccination coverage, prevailing level of seroprevalence, improvement in medical and healthcare facilities and better management of supply chain logistics, all this was reflective in the all-time high GST collections in FY 2021-22
The motto of organisations (in 2020 and 2021) across the globe was to survive the pandemic and revive their businesses. But, as we step in the new financial year (2022 and onwards), the economic goal will be to eventually thrive. It is now time for businesses to further scale up capabilities to stay relevant in a post-pandemic global system. However, In order to thrive, we need to ensure that we work towards building a robust public health infrastructure that will further boost the economy in the years to come. Domestically, there have been several positives on the Covid-19 front, in terms of reduced infection and faster vaccinations. In fact, according to RBI, The Indian economy is on the path of a recovery on the back of conducive monetary and credit conditions, however the current global headwinds in terms of geopolitical environment and its inflationary impact needs to be continuously monitored.
As finance remains at the cusp of holding the fort for organisations, it’s crucial for CFOs to have a prudent and resilient approach for their business to thrive. According to the latest McKinsey Global Survey on the role of the CFO, it’s time for finance leaders to lean into the evolution of their roles and reassert themselves as strategic partners and digital enablers to the business. They have to be deeply involved in determining how businesses adapt to these trends—particularly in those places where digital and finance intersect.
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Present-day finance leaders are more focused on crisis management and have been away from longer-term duties such as strategic leadership, organizational change, and finance capabilities. However, there are noteworthy trends that will remain relevant for finance functions in the new fiscal year.
A lot of organisations are now understanding the importance of Environmental, Social, and Governance (ESG) to be integrated with their finance functions. They are realising the need to have (ESG) under consideration while making any important investment-related decisions for the organisation. Understanding the financial risks that are associated with catastrophes and climate change, concerned authorities are also stressing more about climate risk management. This will become even more functional now as the pandemic has made the environment more susceptible.
Continued Focus on Digital Transformation
The future of finance and the majority of other functions will certainly involve less human intervention and more automation. The CFOs of tomorrow will enthusiastically leverage technologies such as machine learning (ML), artificial intelligence (AI), Data Analytics, Robotic Process Automation (RPA), and various other cutting-edge tools to make finance functions faster and immaculate in every aspect ensuring they spend more time with the business and guide it towards it strategic objectives.
Cybersecurity remains the Nerve Centre
As organisations embrace technology, they are now at greater risk of cybercrime than ever. Organisations that also work with outside vendors and clients need to be extremely assured that their data is secured from any unanticipated and unpleasant breach that may happen. There are various innovations taking place wherein organisations are adapting cybersecurity technology which enables them to detect and fix any potential threats before critical data gets compromised. CFOs will adapt more of such technologies that will have advanced threat intelligence to protect the organisations’ critical assets and hence avert any regrettable situation.
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Upskilling the finance within
As organisations get readied for innovations across, they also need heavy upskilling within. In the last few years, strong economic transformations have encouraged organisations to recruit finance professionals that are not only doing pure technical jobs but are also strategizing and working closely with the CEOs. No wonder, today’s CFO’s are being called the new-age CEOs who are expected to work closely with each other to run the organisations. Future CFOs will be expected to work as unified partners in the business, sharing extensive inputs to ensure complete financial stability, driving strategic objectives and are more forward looking for the business.
In a nutshell, It is crucial for finance functions to be ever-evolving in nature and adapt to these changes while and keep their core values aligned with technological advances.
“Thriving. That’s fighting… Surviving is barely getting by.” ― Jillian Michaels
Views expressed in this article are the personal opinion of Shray Mehandiratta, Finance Director, IPM India Wholesale Trading Private Limted.
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