The role of manufacturing CFO 4.0 is indispensable as industry accelerates digital transformation efforts.
By: Tricia Ang, Digital CFO Asia | 13 January 2021
On 25th November 2020, SYSPRO unveiled findings from its recent research study. The study reveals that the role of CFO 4.0 within the manufacturing sector will be crucial as the industry shifts towards digital transformation as the ‘new normal’. The study, led by SYSPRO and conducted in October 2020, assessed this thought amongst senior-level Chief Financial Officers (CFOs) within manufacturing sectors across the US, Canada, Africa, and APAC.
Key findings outlined in the SYSPRO 2020 Manufacturing CFO 4.0 Survey Report include the return of business confidence, the rise of a more robust role for the CFO within an increasingly digitized manufacturing sector, and the acceleration of Industry 4.0 as a means to overcome future disruptions.
The Imminent Return of Business Confidence
47% of businesses indicated that their enterprise had fared well when inquired how well their business did during the pandemic. The ability for businesses to tide over the COVID-19 pandemic was particularly prevalent amongst manufacturers involved in the production and distribution of essential goods such as Food & Beverage (25%) during lockdowns as well as those who had the ability to continue their activities digitally and those that adapted quickly to eCommerce models.
Taking a closer look at the data, the size of an organization also played an important role in determining its likelihood to survive the pandemic. Companies with more than 51 employees were reported as having business fared as well as, or better than expected during the pandemic.
The research findings suggest that CFOs – who are increasingly responsible for risk management in their organizations – now see COVID-19 as a manageable situation to overcome, rather than terminal.
The SYSPRO study also indicated an overall return of business confidence, where almost 50% of businesses have already recovered or expect to do so by the end of 2020. An additional 30% expect to return to pre-pandemic trading conditions by the end of the second quarter of 2021.
CFOs in Manufacturing to Play a Vital Role in Recuperation
The research study uncovered the importance of CFOs in pulling off a comeback. Almost 83% of businesses identified cost-cutting including curbing unnecessary expenditure and reducing overheads as a key strategy, when asked how they plan to boost tbusiness in the upcoming months. Over 70% of businesses also indicated that they would be exploring new revenue models, aiming for more customer engagement through digital channels.
As for the most urgent priorities for 2021, 70% indicated that they would prioritize the maintenance of margins and 67 percent identified the need to manage cashflow – both of which are traditional CFO functions.
However, the study also surprisingly revealed that in addition to playing a traditional function, CFOs will also be expected to make informed technology investment decisions to ensure all aspects of the business are connected, as well as leveraging Business Intelligence to acquire and assess data that can then be used as the basis for strategic decisions.
The Acceleration of Industry 4.0
While Industry 4.0 has been around for quite some time, the expanding scope of the CFO role contributes to the acceleration of the digital transformation. When asked about areas of technological investment, only 19.3% of respondents confirmed that they would replace ageing machinery in 2021. Rather, the emphasis is on investing in technology to make manufacturing smarter and less vulnerable to future disruptions.
In fact, over 52% of businesses identified investment in enterprise technology such as ERP, BI, and CRM as a key strategic focus area. The goal going forward for businesses is better clarity and transparency of information across the business to enable enhanced decision-making in real-time.
“Enterprise Resource Planning and Business Intelligence were identified as vital, thanks to their information-gathering, processing and analysis capabilities. In uncertain trading conditions, better, more accurate, and more timeous data allows for smarter decision making, as well as supporting strategic decisions through trend identification and assessment.
The challenge for the CFO 4.0 will be to continue to deliver financial leadership whilst also focusing on more strategic and operational aspects. In preparing for the role of CFO 4.0, businesses need to embrace technology, empower people through upskilling initiatives and have a clear business case for Industry 4.0,” concludes Sanjay.”
Sanjay Galal, CFO, SYSPRO APAC
The study also reveals that 44% of respondents singled out the warehouse and advanced manufacturing process automation to be key focus areas. This suggests a longer-term outlook in which many current human roles will be replaced in the name of both efficiency and safety.
This press release is by SysPro. You can read the original here.