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May 4, 2020
As corporate offices begin developing robust reopening plans after being closed due to the coronavirus pandemic, CFOs are working on myriad projections for the future. One area that many haven’t addressed, however, is what will happen if a second wave of coronavirus hits.
That’s the word from Gartner’s latest survey of 99 finance leaders, which the firm conducted during the week of April 14. Of particular note was the data showing that 42 percent of CFOs polled said they aren’t currently including a second wave of COVID-19 outbreaks in their 2020 financial scenarios.
In fact, the survey results noted, just eight percent of CFOs have factored a second wave into all of their projections, while 22 percent factored a second wave into their “most likely” scenarios.
“As CFOs are attempting to project revenue and profits for 2020, it’s surprising that 42 percent are not baking a second wave of COVID-19 into any of their scenarios” said Alexander Bant, practice vice president, research, for the Gartner Finance practice. “Our latest CFO data also reveals that most executive teams are still trying to decide what factors they should use to determine how and when to reopen their offices and facilities.”
The issue on the minds of many is when operations will be restarted for their companies, and Gartner tackled that topic as well. Whereas the majority (81 percent) of CFOs say they’ll be using guidelines from state and local authorities when deciding when to ramp operations back up, they appear to have different views on how employees will be brought back into the fold.
Gartner found the following data about how employees will be brought back to work once their workplaces are reopened:
These results seem to suggest that CFOs are aware that if they move too quickly to bring everyone back, they could face risks. The measured approach appears to be quite popular, showing that companies are working to mitigate the risks as best they can. Although it’s very important to take guidance from local and state authorities, it’s also wise to take your own business’ special requirements into account when creating a return-to-work plan.
Gartner asked CFOs their top business concerns related to COVID-19, and found that during the week of April 15, the biggest concern was cash, with 28 percent of those polled citing it. This included the cash conversion cycle, accounts receivable/accounts payable, cash flow and liquidity.
Macro-pandemic concerns were also cited by 28 percent of CFOs, which included the duration or severity of the pandemic, overall economic health and macroeconomic uncertainties. The fact that cash flow and macro concerns top the list is no surprise to CFOs who are navigating this ever-changing landscape, since these are topics that could make or break a business.
Rounding out the list were revenue losses and reductions in customer demand, which concerned 16 percent of CFOs; employee issues such as morale and safety, cited by 13 percent of CFOs; and other issues like supply chain and logistics, which 15 percent of CFOs noted as a concern.
Although CFOs have their eyes firmly on such issues as cash flow and costs, they are also seeing some possible opportunities show up amid the coronavirus pandemic. Many of them are using the lockdown as a chance to rethink their processes and pinpoint new revenue streams, while others are shifting from in-field sales to e-commerce models, buying back debt at low interest rates and bringing on new talent.
The coronavirus pandemic has forced businesses to uniquely meet customer needs, forcing them to find new ways of doing things, 28 percent of CFOs said. Another 19 percent said they are becoming more agile and digitizing faster, while nearly 20 percent said they are permanently lowering or restructuring costs.
Resource: To read the Gartner survey, visit the firm’s website.
Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!
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