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For years, finance leaders have been seeking ways to leverage technology to make their organisations future-ready. The current pandemic exposed the shortcomings of outdated platforms and accelerated the pace of innovation, even as some organisations battle for their very lives.

The bold moves are drawn from research conducted by McKinsey & Co. on the financial performance of 1,500 companies following the global financial crisis of 2007-2009 to understand how the top 25 per cent in terms of total returns to shareholders were able to outperform their competitors after the downturn. These “resilients”, the research found, shared key characteristics, including an aggressive approach to reallocating resources and investing in productivity initiatives within the organisation.

Bold move #1

Adopt a transformation mindset when reallocating resources

The upside to any economic crisis is that it presents a logical and necessary opportunity to rethink every aspect of the business. Contrary to what one might think, now is not the time to invest resources in small, incremental adjustments; rather, it’s the time to focus on bold, transformational moves that can deliver outsize productivity gains and returns on investment.

Bold moves during a crisis also require powerful tools, yet many companies found themselves ill-equipped to maintain the business, let alone accelerate innovation. Many Oracle customers were running on-premises systems from the early 2000s, which lack crucial capabilities that are integrated into Oracle’s current Cloud ERP. The current generation of Cloud ERP software is giving companies outsize productivity gains now — when they are desperately needed — as well as the flexibility to adopt new business models that support subscription-based revenue streams or digital sales channels. Getting on the cloud today also provides access to continuous innovations being architected now into the software’s road map, from digital assistants and chatbots to AI-driven predictive and prescriptive analytics.

Bold move #2

Pursue pragmatic M&A and divestitures to improve the company’s portfolio

Based on McKinsey’s research of the past and assessment of current conditions, the economic downturn is an ideal opportunity to embark on a programmatic approach to mergers, acquisitions and divestitures that can increase your business’ competitive advantage. Organisations using outdated technologies will be challenged to gain visibility into the profitability of their current business models, assess the potential of new M&A activities or spin-offs, and operationally support the choices they make.

Oracle uses its own Cloud ERP to support its M&A strategy and realise expected synergies. Oracle is very acquisitive, and we have been buying a number of companies over the years, over 100-plus in the past 20 years — many of them large-sized organisations. More than 25 of those acquisitions were completed during the great recession of 2007-2009, to support Oracle’s pivot into enterprise applications and hardware. The true cloud financial management systems are continuously updated with the latest capabilities to provide scalability and flexibility, rapidly integrate new entities, and provide the ability to model the impact of individual acquisitions or divestitures on both the bottom and top lines.

Bold move #3

Boost productivity through digitisation

Innovation in finance has been a priority for years but has now become urgent as a result of the pandemic. More digitisation and automation of finance processes have long been on the to-do list of finance leaders.

According to the McKinsey report Get in front of digital finance, more than 75 per cent of tasks can be automated in areas such as cash disbursement, revenue management, and general accounting operations. As organisations move towards digitisation and high levels of automation, the importance of advanced data and analytics to drive visibility and collaboration across an organisation has never been higher.

At Oracle, our strategy has always been to provide a single integrated service: connected enterprise, connected data, connected view of the business processes to help you actually drive these big transformations. The view from the front office to the back office is critical, not just to operationalise all these new business models, but to also help manage ongoing changes.

Through a single unified platform that facilitates more automation and better collaboration, CFOs and finance teams can more easily adopt modern practices such as continuous forecasting and planning, and predictive capabilities to better respond to the next crisis. Plus, they gain the ability to execute more work remotely — such as the critical task of closing the books.

Oracle was able to increase productivity during the pandemic, shortening the monthly close by an additional 20 per cent while working from home. In fact, Oracle is reaping the benefits of its own cloud solutions across hundreds of processes, every day.

Next steps for reimagining finance

Finance teams in every organisation must move towards resiliency and finance reimagination at their own pace. There is no cookie-cutter approach. Covid-19 won’t be the last of the disruptions businesses must contend with. It’s important for them to re-evaluate and rebuild their business models to be more resilient. Yet resilience is no longer about having the cash reserves and resources to weather disruption right now – it’s about building an infrastructure that is flexible, cloud-based and automated to deal with constant, unrelenting change.

Here’s how you can start building business resilience with Oracle Cloud Applications

The writer is Executive Director, ERP and EPM Product Marketing at Oracle