Australian construction companies that will thrive during the recent consolidation will blend corporate strategy and digital analytic strategy. CFOs will move away from traditional models to adopt digital strategic planning models that rely on data insights while making decisions.
Aspen Medical CFO, Moazam Shah, noted some of the key competencies for finance professionals to thrive in a digital world, including knowledge of digital technologies, ability to articulate their use to a wider audience in the business, an ability to learn and adapt to changes in technologies, and to a motivation to embrace new ways of working.[1]
“My role has not just been about ramping up our global finance workforce to support COVID projects and facilitate fast-moving projects. Above all, my key goal has been to drive digital transformation. Thank goodness we have the technology, which has supported us in everything we do”[2]
said Aspen, CFO Moazam Shah.
A Brainyard survey of leaders across 21 industries showed that most CFOs are responsible for functions outside of finance. Whether by focusing on strategic partnerships, evaluating technology, or working to meet revenue and earnings goals, CFOs are expected to be strategic catalysts of company growth — not just the head of the financial organization.[3]
Construction companies need to be ready to ramp up their digital initiatives to capture and make sense of the data, both financial and non-financial, that they will collect from varied sources. CFOs can play a vital role in establishing a proper data pipeline for collecting, storing, and analysing data.
Accenture has found that 76% of CFOs believe unifying disparate data is vital to achieving business objectives.[4] So, CFOs of construction companies will find themselves responsible for removing financial data disparity in the organization to establish the single truth throughout the organisation.
CFOs will also have to be able to introduce agility in their financial planning using tools that will allow them to adapt to the market by creating models which predict the real-time changes in the market. The construction companies can’t become agile by planning 12 months in advance. That means the whole industry will have to start moving away from fixed-price contracts.
They have decided they need smarter, quicker, decision-makers if they are going to snatch the right deals. That means the data needs to be current and accurate. Unifying data for analysis eliminates the need to pull it in from disconnected databases and spreadsheets. At the same time, a single source of data also increases the speed of reporting and reduces the inefficiency and errors inherent in manual processes.
“It took so long to build the forecast in Excel that the opportunity has been and gone.”
“If we knew that 30 days ago, we could have done something about it.”
A separate study by DataRails found that 70% of CFOs rely on Excel for financial budgeting and forecasting.[5]
What you need is a platform that is able to absorb internal and external data, and the forecasts made by your frontline people. It will need to bring this together into neat and tidy reports your executives can read to make decisions at speed.
In other words, this group is solving the data disparity within their organization by reaching for a single platform to become the source of truth.
According to NetSuite Brainyard’s white paper, “State of the CFO Role,” 186 CFOs respondents said they spend an average of 2 hours in spreadsheets every day. That’s more time in spreadsheets than any other software in their toolkit.[6]
The primary goal for CFOs in the construction industry is to find a solution that can remove data disparity, that can be rapidly deployed in a lean form and that can be scaled to benefit from the investment in such a solution. Amendra says:
“The roles of CFOs are changing from being the numbers people to being more and more of a trusted advisor of which direction a company is going to go in terms of financial transformation. Their advisory needs to be based on data and reality instead of a gut feeling.”
Driver-based forecasting uses the key levers or drivers in your business to help you evaluate the impact of internal or external changes. Forecasting P+L and balance sheets based on actuals and historical data is proving less reliable. In the Australian construction industry alone, market conditions have moved so quickly in the last 24 months, that history can no longer be trusted to tell the future.