Monday, 30 November 2020 00:00

COVID-19 as Catalyst


At the start of 2020, few health care organizations imagined that within months, most of their nonclinical (and in some cases, clinical) workforce would be working from home. COVID-19 has accelerated and catalyzed several aspects of the future of work and the future of health that might otherwise have taken years.

The end state is neither clear nor predictable, but health care organizations understand that few people will return to the workplace they knew a few months ago and are exploring strategies and solutions to transform the way we work. Our research shows the challenges are many—with concerns about the loss of organizational culture topping the list.

According to the Bureau of Labor Statistics,1 in the fall of 2019:

•    85% of employees never worked from home

•    8% occasionally did (i.e., once a month or less)

•    Less than 3% worked from home one to two days a week



The trade-off between cost reduction and increased effectiveness of the finance function is a false choice. Leading finance departments are guardians of enterprise value creation, demonstrating stewardship of their own spend by lowering absolute costs and shifting work towards more value-added activities.

We have analyzed the finance functions of hundreds of companies to understand how cost and effectiveness have evolved over the past ten years. After controlling for differences in sector, scale, and geographic footprint, several findings emerged:

  • Finance organizations have, on average, decreased their cost by 29 percent.
  • The most efficient cohort of finance departments (“finance leaders”) achieved similar cost improvement to the level shown by average performers—an impressive feat given that the finance leaders started from a lower cost base.
  • Finance leaders spent 19 percent more time on value-added (versus transaction-processing) activities than a typical finance department did.

What can companies do differently to join the finance leaders? The research points toward four imperatives. The first is to cast a wider net for new efficiency opportunities, reaching beyond the transactional activities that have long been the primary focus of attention. Second, boost finance’s role in managing data, whether consolidating, simplifying, or controlling the flood of information flowing across the organization. Third, strengthen decision-making through widespread adoption of data-visualization, advanced-analytics, and debiasing techniques. Finally, reimagine the finance operating model so that it fosters new skills and capabilities.

These steps are already enabling companies to join the finance-function elite—while cutting audit costs by double-digit percentages, improving data quality (and reducing wasteful data-cleaning efforts), upskilling finance teams, and enabling the function to guide better decisions throughout the enterprise.