It is abundantly clear that the COVID-19 pandemic has hugely disrupted economies across the globe and has had a major impact on businesses in all sectors. Middle Eastern countries are no exception. The closure of international borders, partial movement bans, full lockdowns, and curfews have all had major repercussions for businesses across the MENA region.
Managing reduced operating and opening hours, reduced customer footfall, lower staff capacity, and remote working, as well as supply chain issues, has forced businesses into an ongoing period of innovation and adaptation in order to survive.
Post COVID-19 research reveals the importance of technology
To aid CFOs during this difficult period, the Kuwait Foundation for the Advancement of Sciences (KFAS) has produced a major research document that presents practical strategies on how CFOs can navigate both the shorter and longer-term implications of COVID-19. KFAS is a leading center for business research and development.
Their findings, published in “COVID-19 Impact and Implications for CFOs,” can be applied to businesses not only in Kuwait but also across the MENA region, or indeed the globe. The insights were gathered from comprehensive interviews with Kuwaiti CFOs and financial leaders from over 330 leading companies. The lessons that can be learned from their experiences are summarized in the document.
Technology is at the heart of the findings of the report. It is abundantly clear that businesses must use technology to navigate the immediate future. Therefore, CFOs must make it central to finance operations as well as support its integration into other business functions.
What follows is an outline of the report’s key findings and recommendations to CFOs with regards to technology.
The pivotal role of CFOs
CFOs should be taking critical action in four key areas, firstly to strengthen the business to ride out the short term. Secondly, taking immediate action in these areas will help mitigate against further unforeseen events that emerge as the pandemic continues to unfold.
The four key areas are:
- Strategic Planning
- Financial Management
- The business’s operating model
- Technology and Innovation
This article largely covers strategies in technology. However, it is vital to understand that this is not the only area that requires critical attention and that steps taken in technology and innovation must be accompanied by strategies in the other three areas.
Short term priorities for financing business technology
If, as a CFO, you have not taken the following steps, tackling these areas should take precedence.
Tighten cybersecurity measures
The move to remote working for many employees has vastly increased the number of external access points. This, unfortunately, results in much greater risks to cybersecurity. The consequences of a data breach or cyber attack can be catastrophic. Therefore, it is vital to provide funding for the necessary resources and personnel to tighten security.
Provide critical support for digital capabilities
Immediate investment is required in digital capabilities that allow the continuation of work through online platforms and remote working. Personnel must receive the necessary IT support to continue to work effectively wherever they are. This may mean migrating to cloud-based platforms that can be accessed from a range of devices.
Other necessary changes, including moving to e-commerce where possible and branching into deliverable goods and services, are appropriate.
Alongside these changes, it is imperative to digitize finance operations to ensure smooth transactions by taking advantage of new technologies.
Safeguarding cybersecurity, supporting the move to online operations and remote working are the initial steps that must be taken by CFOs. At this point in the pandemic, it is likely that all or most of these steps will have been completed. Once this critical work is completed, then CFOs can begin to look at medium- and longer-term priorities.
Longer-term business technology strategies for recovery and growth
In the Middle East, it is likely that businesses will now be looking for medium- and long-term strategies that help them recover from the pandemic, regrow their business, and adapt to the new, post-COVID-19 world that is beginning to emerge.
This is how they must do this.
Build a fully cyber proof organization
CFOs must work with and support ICT personnel to fully audit all the business’s cybersecurity infrastructures. A full assessment of risks must be made. This must be followed by fully aligning cybersecurity strategies and strengthening policies across the business. Potential flaws, gaps and holes must be recognized and addressed.
Accelerate digitization of the business model
It is collectively acknowledged by the CFOs surveyed that businesses must move quickly towards a much more digitally oriented business model. Most businesses already have a degree of digital capability and will likely have intentions to become more digitized. However, plans for digital transformation must be accelerated for greater flexibility, whatever the future holds.
The superpower behind a digitized business is its ability to access advanced data and analytics. This maximizes flexibility and agility because the data needed to make the best decisions is always easily and quickly accessible.
The insights available are likely to be invaluable in dealing with further unexpected situations, should they arise. Data modeling and forecasting of future scenarios can help businesses face their future with more certainty.
Build a digital finance function of the future
It is important to digitize all sections of the value chain as far as possible. This includes optimizing finance functions. There are many digital finance tools available to help, including cloud-based systems that lower costs by erasing the need for vast offline digital storage capacity. Many manual tasks can be automated, thus streamlining the business.
Researchers found clear results from their survey that digitization was a key step towards recovery. Those companies making the most headway had CFOs that were committed to the following:
- Allocating IT resources appropriately
- Funding further automation and virtualization of day-to-day operations
- Aiding the increased use of data analytics.
Taking decisive action at this time is necessary. Operations will return to pre-pandemic levels, but it is not yet clear what permanent changes will have been done to industries. Investing in digitization, and particularly in data analytics capabilities, will result in a flexible business model that is able to thrive.