What are the top 3 challenges facing CFOs as we move into 2023? Gartner's research points to these three big ones:
This is based on Gartner's July 2022 poll , which asked 234 CFOs to share their anticipated top three most difficult tasks over the next 12 months. In this blog, I will examine each of these challenges and suggest the cloud ERP capabilities/and or features that can help overcome these challenges.
The battle for talent
This isn't news to anyone. Competition for talent is fierce. Hiring and retaining staff is tough. Raising compensation for top performers is inevitable, but higher compensation isn't the only solution.
But how can a business system like NetSuite help?
Millennials make up 35% of the Australian workforce. By 2030, they will account for 70% of the workforce, and Gen Z is right behind them. This cohort's upbringing was infused with technology - they are truly tech-dependent. Having competent technology to support their role isn't just nice to have; they expect it. So, it follows that the right technology attracts staff and helps improve retention.
For finance, technology provides a significant advantage because many functions of finance lend themselves to automation. This means you can replace tedious, repetitive tasks like generating reports or cash disbursement with higher-value functions like business development and strategic planning. If you can demonstrate a collective innovative mindset, flexibility for hybrid work, and advanced tech – these are all highly appealing propositions for job seekers.
Accurate forecasting
Now to the second biggest challenge – accurate forecasting. Finance teams that get forecasting right in good times share in the company's success. But their ability to carefully plan and weather incredibly challenging periods is particularly impressive. While it's impossible to predict the future, hedging against worst-case scenarios gives your business a fighting chance to adapt. And the best way to do this is with accurate forecasting.
So, how can you follow your data and uncover trends and insights that support a company strategising through more challenging times?
If you're still using multiple, disconnected systems and databases, accurate forecasting will be another tough one. Only by unifying legacy systems can you gain that all-important single source of data. I’m not just referring to financial data either. I'm talking about the data created and used for operations, customer service, and marketing. When this type of data is translated into consumable information you get historical and future intelligence that you can act on to improve the business.
NetSuite allows you to bring all this data together. Rather than using multiple systems, you have native modules that bolt into the ERP platform to centralise your detailed sales data, fixed assets, inventory management, advanced revenue recognition, tax modules, etc. This interconnectivity means your systems are brought together, and your data is too.
This gives the advantage of speed to access and consume the data. You don't need to wait until the end of the month processes, and there's no need for consolidation to understand and start using the data. You get an instant view of your current financial position, and you can drill into the data and see what's happening at any given time. You can spot problems, talk about them with confidence and collaborate to make changes fast.
Cutting the right costs
A well-known Harvard Business Review study called Roaring Out of Recession examined company survival during the recessions of 1980, 1990, and 2000. Of the 4,700 public companies studied, 17% fared very poorly: They went bankrupt, went private, or were acquired. On the other end of the scale, 9% of the companies flourished, outperforming competitors by at least 10% in sales and profit growth.
How did they do it?
It’s tempting to think of a recession as a time to slash costs and play it safe. But the small minority of firms that flourished did things differently. They walked the delicate balance between cutting costs to survive today and investing to grow tomorrow. They reduced costs selectively by focusing on operational efficiency and invested in the future by spending on IT, marketing, R&D, and new assets.
They prioritised digital transformation because technology would make their business more transparent, flexible, and efficient. They automated tasks, adopted data-driven decision-making and became more agile and were, therefore, better able to handle uncertainty and rapid change.
So, the good news is if you’ve already invested in cloud ERP, you will be better able to understand and quickly respond to threats. If you haven’t yet, and you want to be faster and leaner. If you want to make more processes paperless and optimise them to maximum effect. Then it might be time to consider NetSuite.
Let’s take a look at some of the cost-cutting efficiencies you would gain:
Agility and flexibility
If you want to add new warehousing facilities, enter new markets or assimilate a recent acquisition, NetSuite allows you to quickly add new functions and features via modules.
Customisation
NetSuite’s extensibility allows you to build extensions, connect with apps or develop entire custom applications to suit your processes. You don’t have to bend to the software, the software works around your requirements.
Scalability
The rapid elasticity of NetSuite allows you to instantly scale to meet increases in transaction volume, storage requirements or network bandwidth - enabling you to jump on new business opportunities as soon as they arise.
Lowered maintenance costs
If you are using on-premises solutions, a considerable percentage of your IT budget is invested in maintaining software and related hardware, servers and other necessary facilities. NetSuite doesn’t attract these costs; the vendor is responsible for applying patches and fixes to the software, potentially lowering your TCO.
Better control over inventory
Poor inventory planning leads to an over or undersupply of stock. NetSuite offers a broad array of capabilities to optimise the availability and levels of inventory with real-time visibility over procurement, production, and distribution. This allows you to know where wastage or inefficiencies lie and make appropriate changes.
Supply chain efficiency
With better control over inventory and orders, retailers gain efficiencies in the movement of inventory and orders. For example, deliveries can be scheduled using the best routes for speed and efficiency to minimise inefficient logistics activities.
Paper usage reduction
NetSuite helps to substantially reduce the use of paper. With all your critical information housed inside the ERP, everything can be digitally stored and transmitted, creating a more reliable audit trail and easier, faster access for users.
Automation
I’ve saved one of the best for last because this one is really big for the finance function. Using NetSuite, finance leaders can capitalise on the opportunities offered by AI and automation. For example, you can automate your payroll, invoice management, purchase order management, expense management, supplier payments, payroll accounts receivable, and data analysis. And turn your focus to aligning and driving financial strategy with business strategy.
New AP automation
NetSuite’s automation capabilities for finance keep growing too. Recently, NetSuite announced AP automation, an AI-powered solution that makes it easier and faster to process bills and pay vendors from within NetSuite.
This is by no means an exhaustive list. I’ve just touched the surface of the substantial cost savings and process efficiencies you can introduce with the NetSuite platform.
The customer perspective
So, I've discussed the top three challenges and discussed how NetSuite can support the CFO role. But what does this realistically look like through the eyes of our customers?
In this video you will hear from Lachlan Cornwell, Chief financial and operations officer at True Protein, and how they navigated their business through the last few years supported by NetSuite.
Contact us today to speak to an expert to learn whether we are the right NetSuite implementation partner for you.
Annexa is a leading NetSuite partner with extensive experience designing and implementing comprehensive and customised business systems, including payroll solutions, financial management, warehouse management and ecommerce solutions.