When it comes to funding, digital businesses companies all over the world are still struggling to get familiar with the concept. However, CFOs worldwide are constantly striving to make meaningful investments to enhance their company’s abilities amidst a challenging time. With an economic slowdown, accommodating new investments in digital capacities need a distinct approach to cost optimisation.
Since technology has moved beyond just an operating support system to enablers of efficiency and growth, companies will need to have concrete planning and cost optimisation strategies to conform to the increasing demand for digital and information technologies.
Will Only Cost-Cutting Suffice?
Reports suggest that cost optimisation is instead a familiar concept for finance leaders, wherein the new dimensions that it takes in the digitalised world might be something new. A report by Gartner tells that companies need to look past IT and core business costs in order to put in place newer investments. A method of simply cutting down the IT budget and expecting the economic environment to be on your side to make digital investments can be a flawed approach to prevail.
Given the turbulent times post the pandemic, some companies have received significant dents in their revenue growth and also had to lay off employees. Considering the monetary pressure, such companies will need to think beyond cutting costs as a growth strategy. CFOs in such scenarios can adopt IT and business cost optimisation models to get more productive performances in the future.
Data Relevancy And Improved Analytics
CFOs may additionally plan to incorporate different cost optimisation strategies outside IT, such as customer self-service, developing business efficiency via analytics, automation, better data management, etc. Therefore, besides IT, consolidating the right data and analytics tools and statistical interpretation can help CFOs secure better capital allocation and decision-making. Because businesses having solid capital allocation frameworks have successfully fetched effective decision-making structures with their tools in place, and KPIs centred around the correct data. With an effective accounts payable management system, CFOs can manage the payments of their businesses substantially. In such cases, Capvel’s ability to integrate with the company’s existing ERP to digitise business and streamline the supply chain can be an asset for the CFOs. It can not only provide control and visibility but also help streamline their costs and investments hassle-freely.
Is Collaborating With Senior Leaders A Good Idea?
CFOs should essentially engage with different senior leaders of the company to redo the competency standards that are mainly attached to finance roles and incentive schemes. It will undoubtedly help them battle with any push backs that come along while the company is set to adopt new digital functions. Nevertheless, collaborating with other market leaders can ensure that the efforts of CFOs to accommodate digitisation adhere to the cybersecurity standards of the company.
The roles of CFOs are crucial when it comes to judicious management of resources. With increasing risks and a volatile market, being risk-averse is never the right solution. Instead, prudent and smart financial decisions are the best way out. In the post-covid world, where investments would not be so free-flowing, relying on CFOs may be the perfect solution for a healthy portfolio.