How do CFOs reshape today to reinvent their tomorrow?

Covid-19 has led to many dramatic situations across industries, and this has forced many CFOs to ditch tried-and-tested recovery plans and reinvent the rules to reshape their business in accordance with present uncertainties. Now is the time to Respond, Recover, and Thrive!

Proficient CFOs should be able to show true leadership and come up with a solid action plan that can take the company forward in the right direction. Through this article, we give you an idea about how different CFOs can resolve the fundamental challenges in these unexpected times.

What are the actions that CFOs need to adapt to new operations and building resilience?

Inform strategy by building a cash flow plan

A CFO must be able to come up with a plan in accordance with the pandemic. You should be able to assess the impact it has had on the economy and molding a working scenario specific to your industry. There should be integrated financial scenarios that are aided by forecasts of cost and revenue.

In a nutshell, you must include potential scenarios of the future in every step taken, from building a cash flow plan to giving recommendations to the board of directors. Even though it might look like a rigorous exercise, it is necessary to create a flexible cash flow plan that can adapt to the changing conditions in the business environment.

Manage today’s reality by making a new plan

With the unexpected turn of events affecting the revenue flow of most companies, it would be hard to recover from such a stage. As a result, the cash reserves could see a dent, which means many companies may face a steep shortage of liquidity and operating capital. CFOs must understand that the old techniques may not last here and will have to come up with new operational ideas.

To start with, you should ensure liquidity by adopting an action-oriented plan to bring in cash, reduce the costs, and build a new cash-flow plan. You must then be capable enough to manage all the shareholders, creditors, suppliers, and regulators.

Furthermore, due to the volatile and complex nature of the accounting and taxing issues that you may face in such times, you should be able to stay compliant with such changes. Finally, you must always be on the lookout for new avenues to draw more revenue for the company.

Align your plans with government recovery programs

Due to the unprecedented effect that the pandemic has had, governments across the world have come up with plans to offer massive support through various recovery programs with respect to relaxation in taxes, providing services at subsidized rates, offering loans, or giving grants. You can use robust tax policy trackers to get notified of the new policies and use them in accordance with what you feel can work as a lifeline for your company. You can even build a new team whose main focus should be to get maximum funds and support from the government.

Be ready for the return and rise of the workforce

With most people working from home in the current situation, the recovery phase will see a physical return of the workforce in the company. As the CFO, you must find a way to support them with safety and care, without compromising on productivity. You should also look for a new working model for employees in accordance with the changing times by allowing a part of the workforce to work remotely as well.

Furthermore, you can invest in automated disbursement systems like the ones provided by ClearCycle to maintain an automated ledger of accounts, finance, payments, and taxes in a secure manner. With everything done electronically, there is no scope of unwanted physical contact between employees. With such digitization, you also need to improve the cyber-security of your business setup.

Incorporate resilience into the enterprise

This pandemic has made many companies realize the number of loopholes they have in their business. Many companies have failed to cope with the sudden financial crisis mainly because of their brittle nature in the business models and supply chains. Since most of these companies had a work plan that focussed on squeezing out just the incurred costs, this inflexibility led to a liquidity crisis. Furthermore, this has also caused line stoppages and component shortages, which has made it difficult for many companies to survive

This is exactly where a CFO should come in and save the day. You should join hands with the COO and formulate a plan to do an in-depth risk analysis of the financial and operating processes. Lean inventories, low cash reserves, distressed suppliers, and shippers are some of the potential breakage points, which should be managed in a way that makes them more resilient to such unexpected circumstances.

Look for new Mergers and Acquisitions

Well, it may come as a surprise but such times of disruptions can turn out to be great opportunities for new mergers and acquisitions as well. The CFO should come forward with a strategic and aggressive plan to help make a speedier recovery. You should be able to come up with a recovery plan with upside in your mind.

An efficient CFO should be able to find opportunities that will account for a fast and stable recovery for the company. By balancing multiple challenges, you should be able to manage liquidity crises, decrease the volatility of the company, and planning to come up with a plan that derives new growth.

For this, you can seek help from automated disbursement solutions offered by ClearCycle. Head to our website to know more!

Even though the initial phase of development has been fairly slow, the second phase of adoption has seen considerable growth and that too in a short span of time. It is because of the emergence of a number of risk carriers who are ready to change the various aspects of the underlying insurance product and opt for digital tech to automate the value chain. As a result, it has seen a serious influx in the way the data is processed and sourced.

What is the biggest threat to traditional insurers?

The clear danger at present to traditional insurers is the carriers who are ready to take risks by bringing in various innovations in the industry to make customer-centric products. Since these insurance giants have the technology and resources to make use of the digital options to their advantage, they have a head-start over the incumbent insurers who are yet to take this step. They might not have had a huge advantage as of now but staying oblivious to the evident changes in the insurance environment can cost the traditional insurers a lot.

One of the key things to remember is that the adoption of digital techniques in the insurance industry is not just about making a few changes that will help you get the best solutions but it is also about revamping the whole system in most cases. You will have to grab the opportunity to get ahead of the competitors by investing in good digital platforms and software to get the ideal results.

However, the way you make the transition into the new phase is very important in terms of determining whether your adoption will reap the expected benefits or not. With more and more insurers taking this path, the scope of the whole industry going digital is quite high and it can very well happen within a decade.

Partnership is the key in the future

While many traditional insurers believe in developing their own tech in accordance with their existing system, some have already understood the fact that it is better to partner with insurtech companies and avail services in the form of their tools instead. In fact, many insurers have already started investing in such technologies and are seeing positive results, slowly but surely.

With the upcoming technological developments expected to be around the value chain system, one can expect to build ecosystems that can accommodate future technologies with ease. Hence, one can expect to build a robust and efficient system, and that too in a cost-effective manner. The biggest shift in such an approach is the fact that the focus will be on the customer this time rather than the technical aspects of the system. This will help you build a customer-centric insurance product, which is always the right option to pursue in the long run.

By partnering with such companies, you can launch new products, make customers happy, use existing data points and improve the practical experience, and built an efficient system that caters to everyone’s needs. This will also help you deliver high-speed customer service through relevant products.

Where should you start?

The major trends these days indicate that there will be many APIs and microservices architecture that can be used to mold the changes around the existing transactional legacy system. This is especially true for insurers who do not have the budget to make a complete overhaul of the system.

However, you need to keep certain things in mind while starting such a venture. You should find software that gives you interconnectivity options, enabling you to connect to other systems as well.

Furthermore, you need to create a system where customer interests are kept at the forefront and then use RPA (Robotic Process Automation) techniques to get the best results. This can help you achieve better interactions with the customer and harvest data in a more efficient way.

If you are looking for fast and reliable results, then you will have to rely on automated and digital systems. They will help you streamline the process in a better way and develop smart claims contract as well.

How can you start?

To start with, you need to have a clear picture of all the problems in your existing system and decide the available opportunities out there. It is important to ensure that you know the areas that can be automated and the ones that need manual attention. This demarcation can help you choose the best possible insurtech for your company.

You also need to decide what jobs can be outsourced and what needs to be settled internally. Since there are so many decisions to be taken, it is important that all the decisions are made from the board level and down, so that you get the best possible return of investments, with respect to the software you invest in.

Top platforms that you can take advantage of

• Atidot – It is a platform that does predictive analysis with the help of AI, ML, and big data and then provides deeper insights into the data in the system.
• eBaoTech – It works with multiple carriers, agents, and ecosystem players to develop connected insurance models across 30 different countries.
• Flamingo – This is a simple software that uses AI to improve the customer experience and thus increase the efficiency and drive growth.
• ClearCycle – It has a number of efficient disbursement systems that let you make the claim settlements and payments with ease in a completely automated way, thus making your insurance system faster and more reliable.

With every other industry going digital, it is time for traditional insurers as well to make the move in this direction. Integrating automated software in your insurance system can not only improve customer service but also improve the efficiency of your company’s workflow. To know more about such services, get in touch with ClearCycle that has been in the industry for over three decades.