CFO

7 Actions Businesses Need to Take in 2021

By Brainyard Editorial Staff
December 17, 2020
Business 2021

In short:

  • Brainyard asked each of our seven subject-matter experts to name the one action they recommend companies take in 2021.
  • Their answers stress the need to fortify new ways of doing business that many companies pioneered in 2020.
  • Top takeaways: Continue piloting brand-new modes of communication with everyone from employees to suppliers. And, automate any function you can.

The past year challenged “business as usual” and demanded leaders take a fresh look at operations. Uncertainty became the buzzword, and planning its antidote. We talked about how to build resilience, how to predict and analyze future scenarios and how to cut — and spend — wisely.

As a new calendar year approaches, we shake off what was and look forward. Brainyard asked each of our seven subject-matter experts to name the one action they recommend companies take in the coming year. Their answers are a call to take any hastily-built systems from 2020 and fortify them, making them sustainable for the long haul. They prioritize communication — in modes you might not have imagined yet — and automating any function you can in an effort to free up time for strategy, which is arguably at its most critical.

Their recommendations by focus area:

Planning and Budgeting

Create a repeatable planning process.

In 2019 and for years before, finance teams had the benefit of the longest economic expansion in U.S. history to guide planning and budgeting. This year, with its historic quarterly GDP fluctuations — first down, then back up — that history wasn’t much help. Those fluctuations and the continued economic effects of COVID-19 have stressed finance teams’ reforecasting abilities, with some providing updates as often as twice a month or more. CFOs, controllers and FP&A teams have wished they had a crystal ball since March 2020, but hard work and long hours have had to suffice.

In 2021, the first step toward improving forecasting speed while getting a piece of your life back is adopting finance automation tools and moving toward the much-discussed continuous close. Automation has been on the to-do list for many finance teams, and this is the time to make it happen. Smart finance teams will continue to hone their forecasting skills as businesses continue to evolve.

For fast-growing firms, particularly those that need to show results and projections to investors ranging from venture capitalists to private equity investors to bankers, it’s a good idea to consider planning and budgeting tools. These tools should be integral to your finance automation efforts so that your time goes into developing the needed projections and not into extracting and formatting the data required for each new forecast.

Since historical trends aren’t all that helpful, scenario modeling is a better way to go. Understanding how to navigate best-case and worst-case scenarios and a few paths in between will help guide you through any condition that emerges.

playing chess

Scenario Planning: Strategy, Steps and Practical Examples: Learn to identify ranges of potential outcomes and impacts — and manage for both positive and negative possibilities.

Commerce

Use data to personalize.

2020 found many companies standing up ecommerce sites as an answer to challenges with face-to-face sales. Now, merchants should focus on providing more relevant and engaging brand experiences on those sites. Instead of providing the same shopping experience to all customers, leverage your data to power personalization wherever possible.

One of the most effective ecommerce personalization strategies is to provide unique product inventory and pricing to specific shoppers. Companies often do this for various types of individual consumers. But business accounts aren’t typically all the same, either. Sales teams usually manage these differences by giving custom quotes over the phone or email. Meanwhile, they segment direct consumers by their purchase history or loyalty program status.

In the coming year, try providing exclusive web-store catalogs to various customer segments both in B2C and in B2B, where doing so is particularly useful since customers tend to re-buy similar items. You might personalize based on factors like geographic region, previous transaction history or account type and status. This method allows users to maintain functional control over their inventory however they see fit. It can also reduce potential order processing issues while improving conversion rates and overall satisfaction.

For wholesalers and distributors, which often have radically different types of buyers, personalized product catalogs help segment first-time buyers, repeat buyers and bulk buyers. By grouping each of these segments, merchants can provide discount pricing and incentives based on volume purchases or payment terms. First-time buyers, for example, might be limited to lower available quantities until they successfully pay for their initial purchase and graduate to the repeat buyer segment.

Retailers with VIP programs should use personalized product catalogs to showcase unique merchandise only available to VIP customers. Instead of cutting into profit margins with excessive discounts, use these catalogs to incentivize shoppers to join your VIP program. This is especially effective for fashion and health and beauty merchants that continually add new products and promote limited-run collections.

International businesses can use personalized product catalogs to promote items available in specific regions. Merchants can even get granular within their own country by applying pricing and availability rules to specific regional customer segments.

HR

Set goals for employees, and check in frequently.

Prior to the pandemic, about 4% of the workforce (not including the self-employed) worked remotely at least half-time, and only about 7% of the total workforce had the option to work from home at all. Now, nearly 60% is working from home at least some of the time. This trend is expected to continue well into 2021, and in some industries, it will be permanent.

In 2021, focus on keeping your workforce engaged and productive. Sure, this aim is nothing new — but for many, achieving it completely remotely is. Plus, its importance has never been greater.

Formal goals are especially motivating when working remotely. So give each person on your team three to five formal goals, complete with milestones and deadlines, per quarter. Solidify these goals during a one-on-one meeting: Your employee should come with their expected goals, and you’ll come with your own thoughts. The two of you will work together to decide upon those formal goals. Ensure they’re measurable: Salespeople, of course, must hit their number. Project managers: How many projects will you deliver on-time and on-budget this quarter? If these goals change throughout the quarter, meet with your team member again.

Meet at the end of the quarter to assess performance. As teams continue to work from home, managers will increasingly gauge performance against those formal, measurable goals — not by glancing over to see if folks are sitting at their desks. Thus, performance reviews will need to happen more often — we recommend quarterly, at a minimum — and they’ll be more effective.

These goals and assessments will leave leaders with a rich set of performance-related data about the whole company. For example, team members who hit all of their quarterly goals are your “star players,” and others are either at risk of leaving or perhaps should be considered for dismissal. If you have an HCM system, use it to help you analyze this data.

By the way, if your team has returned to the workplace, these tactics are still incredibly helpful. Most of us don’t have formal goals and don’t know how we’ll be evaluated in a performance review. Yet we crave goals; they motivate us to give our best work. We also crave feedback: Am I doing a good job? Do you recognize my work?

To that end, make it a point to praise your team’s work in 2021. It’s so easy to recognize wins in the physical office: You might plan a happy hour to celebrate a big deal or bring treats to the office after a project wraps. In the video-call world, a simple shout-out during a team meeting or a congratulatory note will keep folks engaged.

wfh perks for holidays

Gift Guide for Your Remote Employees: If you’re more of a “show, don’t tell” type of manager, perhaps a small gift is your method of showing appreciation to employees. Check these out!

Customer Support and Education

Double down on customer success offerings.

In 2021, software and other businesses with products that require lots of customer communication or training should refine the virtual ways of doing business that they pioneered in 2020. This especially applies to running or launching customer success programs, which include teams of consultants who proactively help your customers fully use and get the most out of your product.

This past year, many firms had to make critical parts of the service delivery process “go virtual” with little notice, whether it was the initial discovery review or regular progress check-ins. Continue perfecting those processes in the coming year.

And don’t hesitate to check in with your customers. While talking with customers who participate in customer success programs, we’ve found that the happiest ones are those who’ve kept in constant communication with their customer success representatives during the pandemic. Their reps have been just as available as always — but on the phone vs. in-person, of course. That constant communication goes a long way.

If you do have a customer success program: Continue to track customer support cases, even in this virtual world. Take notes in regular customer check-ins, and ensure everybody on the customer success team is on the same page about the customer: Which issues did they encounter last month? Are they satisfied with the product? Customer records are the easiest way to log this information and share it amongst the team.

Also consider packaging incentives, so you can sell your customer success product to larger companies. While it’s important to sell these services individually to smaller firms, a lot of larger organizations will need support for their entire workforce in the coming year, as teams continue to work from home — and inevitably face software snafus while they do.

You may already have a tiered service model: Perhaps your “basic” customer success offering includes, for example, initial troubleshooting of the system and advice on maneuvering the basics, while the “premium” level involves triage of an ecommerce storefront if it glitches during the holidays. Continue building out these tiers in 2021, ensuring each offers unique incentives instead of simply “more” or “less” service for a correspondingly different price. Consider adding industry-specific packages within each tier, too.

If you don’t have a customer success program: This is a great time to launch one. With some states introducing closures again, many of your customers will likely make additional tweaks to their business models. And they’ll look to customize their software modules to align with those changes in strategy. They might, for example, need to furlough workers and thus quickly implement a payroll tool while dropping another module. Working with a customer success team is the way to do that quickly. Customer success programs also save the customer time in training employees to use the software, and they help teams fix issues on their own vs. needing to dial an expert.

If you’re getting lots of inquiries from customers about specific problems they’re having with your product, that’s an indication it’s an especially good time to launch a customer success program. And if you aren’t, you can glean information from sales teams’ feedback or customer satisfaction surveys to help you get started.

All in all, more support for your customers means a higher level of satisfaction with your product. It provides reassurance in customers’ return on investment as they continue to grow and change with your product, software or otherwise. In 2021, that reassurance will be of massive value.

Financials

Use intelligent automation in your accounting department.

COVID-19 has pushed the need for electronic transactions and automated management of those transactions from the “nice-to-have” column into “must-have.” With the current focus on FP&A and continued work-from-home policies, it’s just too easy to miss an electric bill or be late on paying a paper invoice.

Further, finding ways to increase efficiency is always important in the accounting profession, where manual processes are at odds with the need for accuracy. Manual data entry has always been a common source of errors. Spreadsheets, while incredibly useful, are another pain point — an unnoticed change to a single formula can wreak havoc.

Robotic process automation (RPA) not only eliminates error-prone manual processes but also improves efficiency in other ways. For instance, combining RPA with learning algorithms allows an accounting system to recognize and post recurring transactions automatically, which can save a lot of time. Automatically matching customer payments to open invoices is another example of smart automation. And by the way, it's not just finance: Processes in almost all functional areas can benefit from automation. For product companies, automating inventory processes saves time and ensures enough product is available to fulfill customer orders.

In this realm of automation, even something as simple as filling an order can kick off an automated process to notify customers of the shipment. Add some intelligence, and restocking orders can be automatic, and bills can be paid automatically if they’re within specified norms.

We recommend taking a crawl, walk, run approach to automation with implied intelligence. First, get your transactions to come in electronically. Paper needs to be eliminated. Keep human approvals part of the process until you’re convinced you’ve got the right rules in place — then you can move to a notification of automated actions.

autotease

18 Ways to Automate Your Business for Growth: Find ways to transfer busywork to machines and empower staff to flex their creativity and problem-solving skills.

Supply Chain, Warehouse, Inventory and Order Management

Get full inventory insights.

2020 was plagued with backorders, stockouts and delayed shipments. It was a wakeup call for many manufacturers, retailers and distributors as it exposed just how fragile the global supply chain is — and how little they knew about what was going on in their supply chain operations.

As we begin the new year, manufacturers, retailers and distributors will be focused on improving visibility into their supply chains. Running a global supply chain is complex — businesses struggle with how to deploy inventory in the right quantity, location and time, how to react to unplanned events, uncertainty around demand (which can create excess inventory), speculative ordering and more.

The common thread between all of these challenges is the lack of a clear understanding of inventory. Without knowing inventory levels in detail, none of the other parts of the supply chain can operate at their fullest potential. It is central to the success of the entire supply chain, from demand planning to customer service, and everything in between.

Businesses looking to strengthen their supply chains should focus on addressing weaknesses in their inventory tracking and ensure they have near real-time visibility of items across all locations and selling channels. An inventory system that is integrated across the organization and with other applications not only optimizes inventory to ensure product availability, it enables the entire supply chain to run efficiently and effectively.

As many manufacturers realized the hard way this year, relying on a single supplier for any item, component or raw material can have devastating results if it is suddenly not able to deliver. In 2021, businesses should review their supplier profile and ensure they have multiple suppliers for each item. It’s also a good time to build a toolset that can manage multiple sources for products and materials so that you can quickly adjust to changing availability, eliminating a disruption in production and, ultimately, product availability.

Project Management

Boost efforts in collaboration.

Professional service organizations, along with those in many other sectors, will need to improve their collaboration efforts in 2021 as teams continue to deliver projects anytime and anywhere.

In the coming year, we may see a new, more collaborative breed of resource management — one that’s a mix between traditional resource management and “crowdsourcing.” There’s a projection that firms will increasingly allow employees to pick and choose which projects they work on, rather than managers assigning teams. We’ll also continue to see more short-term projects vs. multi-year, spread out, longer ones. In the past year, professional service firms have been hyperfocused on project completion amid a remote, uncertain environment — and customers have too.

Depending on the sort of service being rendered, we’re also seeing a trend of companies keeping the services they have, but not starting new projects/engagement unless they specifically must happen due to changing business conditions. As 2021 dawns, find the areas in which your clients need help now. If you’re an MSP, that might be ecommerce and collaboration tools. For marketing consultants, it could be improving digital marketing. And supply chain gurus will likely want to help clients diversify and strengthen their supplier sourcing. In all of this, keep time to value short, and come with examples of how your proposed technique is paying off for others.

Mark Bianco

For more helpful information from the Brainyard and our friends at Grow Wire and the NetSuite Blog, visit the Business Now Resource Guide.

  

Sales Chat

How is your business adapting to change?

Start chat