Expect the unexpected. Be prepared for change. Know that the only thing that can truly be predicted is unpredictability itself.
Vena has always been an advocate of these principles. But with a particularly unpredictable year coming to a close—one marked by a global pandemic, rises in unemployment and precarious market conditions—they’re more pivotal than ever for finance and operations teams. And they’re principles we think organizations everywhere will be keeping front and center as we put 2020 behind us.
“The truth is, we don’t know what 2021 has in store, or what new curveball may come our way,” Vena CFO Darrell Cox points out. “What we do know is that the only thing you can truly plan for is that your plan will be wrong at some point. And that means remaining ready for anything, constantly staying ahead of change and putting the processes, people and tools in place that let you stay proactive when the unexpected arrives.”
If there’s one thing we do know for sure, it’s that past data can help inform future insights. So how exactly will the uncertainties of 2020 fuel the decisions of 2021? Here are five predictions for the year ahead.
Five Predictions For 2021 and How To Come Out Ahead of Change:
1. In a New Type of Workplace, Innovation Will Prosper
When we released the Vena Q2-2020 Industry Benchmark Report in July, 92.5% of respondents predicted that the virtual workplace was here to stay. And going into 2021 it looks like that is likely to hold up—but that the workplace will also continue to evolve. Forrester predicts that more companies will embrace a hybrid “anywhere-plus-office” model, with 300% the number of employees expected to work remotely compared to prior to the pandemic.
Our CEO, Hunter Madeley, sees the normalization of remote work as a good thing for organizations everywhere. “Individuals, teams and entire organizations will find themselves needing to solve problems, elevate creativity and innovation and feed the need for social connection in fundamentally distributed environments,” he says. “As they settle into this new way of working, productivity, culture and innovation will thrive.”
As a short-term need becomes a long-term change, our prediction is that 2021 will see finance teams empowering their people in whatever way they can—and embracing innovations and changes that let them thrive in this new environment. That means finding ways to facilitate better digital collaboration both across the finance team and departments organization-wide. It may also mean implementing new technologies and processes or teaching your team fresh skills. Whatever it takes to meet those new workplace needs head on—and come out the better for it.
2. Automation Will Thrive, Empowering Finance To Be More Strategic
“FP&A and accounting teams will continue to lean into automation—be it robotic process automation or corporate performance management,” says Dahlia Sheldon, Solutions Consultant at Vena. While automation has increasingly become a part of the finance function, she predicts that the trend will only escalate in 2021—a direct result of the disruption to traditional business processes and cadences in 2020.
That doesn’t just mean more teams using automation tools, though, and adding efficiencies as a result—it will also show up in how solutions such as robotic process automation (RPA) and corporate performance management (CPM) are used, as they’re implemented in more collaborative and richer ways than traditional use cases have called for.
And by leaning further into automation—and taking the more repetitive, high-volume tasks off your plate—we foresee finance teams will have more bandwidth left to embrace a more strategic business role. Your finance team will be able to concentrate more on providing meaningful insights that don’t just benefit the bottom line. They’ll also help build future goals and guide your business towards them—even in the face of change.
3. More Organizations Will Ask “What If?”
While we may be going into 2021 with reason to be optimistic, the future—including the lasting effects the pandemic will have—is still up in the air. So it makes sense that finance teams will want to ensure they’re ready for anything.
That means asking “what if?” and modeling future scenarios will become more important. “There will be a bigger push for what-if analysis due to the pandemic,” Vena’s Chief Solutions Architect Rishi Grover predicts. “Companies will want to rely on the ability to generate multiple scenarios and adjust assumptions in a nimble or agile way so that they are prepared for uncertain events, internal or external.”
While only 60% of organizations were using scenario modeling when we released our Vena Q2-2020 Industry Benchmark Report—leaving 40% that weren’t—we predict more finance professionals will embrace it in 2021, to look ahead and test assumptions on what’s in store. After all, by staying in tune with possible future scenarios, you put yourself in a better position to recognize when you need to pivot—so that you don’t feel like you’re ever getting too far off course.
4. Finance Will Embrace Predictive Analytics and AI
“Anticipation will rule the day in 2021,” Hunter predicts, and that doesn’t stop with scenario modeling. “The individuals and organizations with the highest capacity to assess and predict the ever-more rapidly evolving needs of the people and markets they serve will create the most value.”
Which is why emerging technologies, such as predictive analytics, artificial intelligence and machine learning, will become more important for finance in 2021, as teams try to anticipate what the future has in store. “Artificial intelligence and machine learning will make further headway into the office of finance and FP&A, which has lagged other functions such as sales and marketing, HR and operations in terms of its adoption,” adds Mark Erdmann, Vena’s Senior Director of Professional Services.
By helping finance teams identify data anomalies, correlations and trends—and forecast potential risks and future outcomes—predictive analytics, alongside AI and machine learning, will give your finance team another leg up and better prepare you for what’s next. They’ll make it easier to predict future revenue, anticipate potential sources of future loss and identify areas where new efficiencies can be added—insights that will help you better determine how to allocate resources and plan for future needs.
5. Improved Access To Data Will Lead To Better Insights
Data remains at the core of the finance function. You can’t look very far ahead without data on what’s already come before. Which is why improved access to data is critical to moving organizations forward and keeping them prepared for change—and we predict that’s exactly what’s going to happen in the year ahead.
In 2021, more teams will put in the work to join their financial and operational data so that they can access more meaningful insights from it. They’ll connect disparate data sources (the number one data challenge of organizations today, according to Vena benchmark data) and build high-level dashboards that allow them to drill down into more and more detail. In doing so, they’ll be more prepared to face whatever’s around the corner.
We’ll also start to see an ultra-intuitive end user experience when it comes to gathering budget input data, with minimal to no training required for data input and reporting. “More companies are gathering budget inputs downstream, from a more diverse non-financial audience,” Rishi says.
Coming Out Ahead of Change
While we may have our predictions for 2021, we also have a caveat. Everything could change. Some of it probably will. Again, the only thing we can truly predict is unpredictability itself.
And finance and operations teams aren’t just leaving 2020 behind understanding the truth of that better than ever—they’re also looking for ways to prepare for it. It’s why our team’s predictions all focus around a pair of common themes. They all speak in some way to the agility and resilience finance professionals are embracing as they help move their organizations forward. It’s that agility and resilience that will ensure you’re prepared for whatever’s ahead.
“Agility and resilience will dominate the conversations of the day,” Hunter says. “Coming off such prolonged and intense exposure to uncertainty in all aspects of our lives, we'll all be looking for methodologies and technologies that help embed agility and resilience into the ways we work, live and contribute.”
If one good thing emerges from 2020, then, it’s sure to be that. Because agility and resilience are key to staying ready for the future—wherever that future might take you.