We all are living in the most difficult times in living memory, after the severe Influenza Pandemic in 1918, wherein 500 million people were infected and 50 million died worldwide.
During and post current Covid -19 pandemic, we are witnessing several changes. Especially the work from home (WFH) culture is in vogue out of necessity. Automation and digital transformation is happening at a faster pace in all walks of life – from home to offices to Governments. The volume of digital transactions in 2020-21 alone was Rs 5,554 crores in India. The lockdowns have certainly affected the volume of transactions; however we can expect the pace of digital transactions will only go up. As an example I pay my gate side vegetable vendor and milkman only by Google Pay these days adhering to contactless transactions as part of covid protocol! Business travel has drastically come down and meetings taking place on digital platforms are the new norm and this will continue to be in the near future too.
With this background let’s examine what changes that can be expected across businesses and how will it percolate down to the Finance and Accounting function and the personnel.
I remember in one of my employments during the 2010 recession, the review of our Cash flow forecast meetings changed from monthly to weekly due to the fluctuations in finance due to the recession. It may now be daily. That is the difference.
According to a KPMG Report, finance was already experiencing significant shifts towards digital transformation. But now there is no choice but to adapt the change and accelerate the pace.
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Digital transformation will result in the following:
- At least 45 percent cut in transactional costs.
- 15 percent improvement in working capital.
- 50 percent decrease in manual reconciliations and repetitive tasks, which is phenomenal.
Companies that want to digitally transform their finance function will use cloud based ERP systems thereby improving the state of finances and cutting down on costs significantly.
Organizations are also conscious of the fact that they need to be data driven in order to remain competitive or perish. Data – driven means strategically utilizing data to identify business opportunities, increase sales, make the operations efficient and take an integrated approach of all functions.
Now data analytics is gaining much currency that allows companies to make decisions based on actual real time data, which will help companies to achieve business plans and goals effectively. Finance function will therefore be expected to provide real time accurate information for faster decision making. Focus of finance will shift from compliance / control centric to a hub of analytical information and interpretation of data in order to remain relevant, The Finance function must therefore have teams with right knowledge and appropriate skills.
The other changes that will happen is the current remote work will come down and still about 30 to 50% of such work will still continue to be remote, depending on the type of industry and processes. Rapid automation, use of block chain technology and AI will also take place.
Therefore at least 20 to 30% of the workforce will have to reskill, upskill and some will have to even make a career change altogether. I know an Instrumentation engineer with several years of experience in the oilfield is making a career shift to Data Science due to paucity of jobs now in his field of expertise. This is a widespread happening in all fields. Such is the impact of the pandemic. And this will be the new normal.
The result is there is going to be a huge talent shortage. With the courses in colleges and universities being conducted online, it will only worsen the situation as we know the Lab activity, projects are almost nil or minimal affecting the student’s learning. The cascading effect is, it would impact the skills and competence of the students, severely impacting the chances of employability of a person. This will only increase the unemployment and under employment rate.
It is now crucial that students, candidates applying for jobs, employees at entry level and middle management level must do a self analysis of their skills vis a vis the changes in the jobs scenario and expectations of the prospective employers . We can no longer expect a status quo. Allocating a budget for learning new skills, adding new qualifications and putting emphasis on long term competence is a necessity.
Those in entry level and middle management level must enroll for courses like CPA, CMA, and CIA, which will only increase the chances of employability and make a shift in the career either horizontally or vertically and give a fair chance of some stability in their career. These professional courses help in the plan to upskill and reskill themselves. Also learning short term courses in Advanced Excel, Power BI and Financial Modeling will be a huge skill addition. For those interested, Delphi is a one stop education Institute that offers all these major courses.
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What are you waiting for? Please enroll now in the links given above and upgrade your skills.