Unexpected change can be a learning experience--in good ways and bad.
And while every year comes with some kind of change, 2020 was an anomaly in the amount of change it brought, proving that point more than ever. From rapid market shifts to increases in unemployment and remote work, it forced businesses to react--and many of them stepped up, transforming rapidly. The rate of digital transformation accelerated in many industries, virtual working environments were embraced and many organisations looked at their people, processes and technology with a new eye, searching for even more ways to introduce the type of agility that would prepare them for any more change ahead.
That was the new norm, then, within which we welcomed 2021. But what has happened in the year since? And how did finance and operations teams keep up--staying ready for whatever comes next?
We explored the answers in Vena's 2021 Industry Benchmark Report. Based on a survey of 175 business leaders and finance and operations professionals across 41 different industries, the new report looks at the past, present and future to see what finance and operations teams took away from 2020, what they've done in the year since and what's impeding or supporting their success going into 2022.
The State of Strategic Finance: Vena Industry Benchmark Report 2021 is now available for download. Keep reading to explore insights from the survey data:
In 2020, when we released our 2020 Vena Industry Benchmark Report, the pandemic was still comparatively new, remote work something organisations were only just getting used to and uncertain market conditions an unpleasant reality without an end in sight. Organisations, as a result, were scrambling to keep up with all of the changes underway--most, we found out, without an early warning system in place to help them or the agile processes that would allow them to navigate that change confidently and with ease.
The good news, our most recent survey revealed, was that organisations seemed to be doing better in 2021 than they were then. In fact, more than half of respondents in our 2021 survey said their companies were in better financial health than they'd been in 2020. That's a plus no matter how you look at it.
Unfortunately, the story gets a little more complicated.
Because the biggest driver of that improved financial health--at least for 48% of respondents--wasn't anything businesses did themselves. Rather, it was propelled by market growth as conditions stabilized after an uncertain 2020. In fact, only a slightly higher percentage of organisations had agile planning processes in place compared to 2020. Just 7.5% were introducing an early warning system and significantly fewer organisations were using scenario modelling.
The report revealed that only 40% of organisations were employing scenario modelling before making forecasting adjustments. "This may be due to their better financial health and a perceived increase in stability in 2021 compared to 2020--yet simply riding the wave of the market without a look ahead puts organisations at risk," the report reads.
The State of Strategic Finance also explores:
The biggest takeaways of 2020
The biggest changes made to people, processes and technology
But the past is just a jumping-off point. To dig deeper, we wanted to see how 2020 informed the priorities for organisations in 2021--and what challenges still remained. For that, we looked at present processes and how organisations were faring.
Even with the learning experience that was 2020 behind them, finance and operations teams still weren't doing all they could to stay agile for future change in 2021. But a number of them did seem to be focused on the right priorities--it's just that familiar challenges were getting in the way.
In fact, 97% of the finance teams surveyed said they were adding value as a strategic partner to their business. In other words, they were going beyond the traditional transactional or back-office roles and being embraced as a trusted advisor to their business, providing key strategic analysis to help drive the business forward. And they were focused on developing many of the skills they needed to do so. Almost 60% were investing in reporting skills, 54% in business analysis skills and 51.5% in leadership skills--skills that added to their agility as organisations.
Unfortunately, companies were still falling behind on agile processes such as scenario modelling. Not only that, but data was still proving to be a challenge. "Multiple disparate and disconnected data sources" was the biggest data challenge in 2021--just as it was in 2020.
The report revealed that a majority of organisations were still missing a unified strategy on how they create, maintain, control and use data--making unlocking deeper insights impossible. "This will likely continue to be a hot topic over the next five to 10 years, as businesses move toward more unified data management," the report suggests.
The State of Strategic Finance also looks at:
The biggest drivers of revenue growth in 2021
The greatest challenges to current business planning processes
Without the right processes to stay agile--and accessible, easy-to-use data to back that up--organisations can put themselves at a disadvantage when it comes to meeting future goals. So finally, we looked ahead to see what organisations were doing to make their future vision a reality.
With all of that in mind, how ready are organisations for whatever the future has to hold? And what are they doing to stay ready? Not as much as they'd like to be, our benchmark survey found.
Today's finance and operations teams were falling behind on both forecasting and long-range planning. Organisations weren't forecasting as often as they would have liked and weren't giving their long-range plans the attention they needed for the best results.
According to the report, a lack of time was getting in the way, but it wasn't the only factor that was making more frequent, continuous forecasting a problem. "Disconnected data (33%) and insufficient technology (25.5%) were also issues. Clearly, the challenges organisations face in their people, processes and technology today affect how they approach tomorrow too," the report reads.
To complete our view ahead, the report also looks at:
How often organisations are forecasting and updating their long-range plans
How organisations are using future-facing technology such as artificial intelligence (AI)
Read the entire report and find out what next steps you can take to future-proof your organisation.
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