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In the wake of COVID-19, finance organizations across all industries have been working to move from crisis management mode into building resiliency for the future. Mat McBride, finance leader for Microsoft’s Cloud and Gross Margin, recently sat down with us for a virtual conversation. We asked him about the challenges currently faced by CFOs, CPOs, and other financial decision makers, the concerns of customers and investors, and building resiliency.

Q: Nothing has highlighted the need to build resiliency more in recent years than the COVID pandemic. What does ‘building resiliency’ mean in a time like this?

A: The key thing for finance teams right now is cloud preparedness. Folks that are more modern and have already planned for resiliency are sleeping better at night than those who aren’t. They know they have a cost stream that’s going to match what demand is doing, and they have the ability to elastically expand. They know they don’t have to have a crazy capital crunch to meet that demand and that change in the market, as compared to, say, an organization who’s still on-premise or otherwise using their own servers and not the cloud.

If you’re already in the cloud, you can spend your time making decisions about what you want to do with your business. It’s already much less of a capitalization decision—especially when supply chains are disrupted. You don’t have to worry about your own supply chain to get capital deployed for your computing and storage needs. You can let somebody else worry about that—your cloud provider.

Q: What are some of the current challenges facing CFOs and finance organizations when it comes to building resiliency right now?

A: The number one thing is alignment between CFOs and CIOs. CIOs are pushing for uptime—they want to make sure they have stability in their organizations as more services are going online and with more employees trying to be productive from different places. Those CIOs care about security, scalability, and employee productivity against a very challenging backdrop.

The CFO needs to deeply partner with the CIO to figure out how they enable security, scalability, and productivity in the most financially viable way. Companies need to be able to say to shareholders or investors that investing in the cloud is a good thing and will drive up productivity in the long run, from an employee standpoint as well as from a capital standpoint. They’ll have less working capital tied up in fixed assets and more of it going directly to things that are actually making the company produce more outputs.

Q: How does operational resilience relate to financial resilience?

A: As a finance leader, there are very real consequences when you haven’t thought through scalability and resilience in your infrastructure.

For example, let’s say you’re an online retailer. You have a big spike in demand because suddenly many more purchases are happening online. Downtime on sales due to your website crashing or losing data in your backend system because it’s not up to scalability needs—that’s lost revenue and lost productivity. You need your business operations to continue running smoothly and seamlessly at a time when the business landscape and societal landscape has shifted under your feet. Compliance is another big consideration. You want to make sure you’re doing all those transactions in a compliant, recordable manner. It’s important to be able to track and report your performance accurately. So many companies are using the cloud to track performance, not only in financial metrics but in non-financial aspects as well, as a way to give investors a sense of how their business is doing. You have to have high confidence in that data—that it’s being collected appropriately and managed appropriately. Data confidence certainly helps a CFO sleep at night, but it’s also great for investors because the transparency and the surety is there when you have systems operating in harmony with good transparency and good controls.

Q: What can you share about how Microsoft has handled current times?

A: At Microsoft, we’ve been able to master performance data using the cloud in a way that helps us make decisions quicker when the backdrop of the world is changing. For example, like with many of our customers, our Microsoft Teams usage spiked dramatically as folks started working from home. Because we have cloud-based data connected with our financial data, we were able to make really agile decisions about how we were going to deal with that spike. We could see the picture in real time, with transparency and clarity. We didn’t have the month or two-month lag into what was really happening, That time delay when you’re not sure what your telemetry is telling you can actually cost a company millions of dollars as you try to sort through and sift through information.

As a finance person, I feel a lot better about the capital I deploy to go generate profit because I have a lot tighter connection to it through the data. Having that ability to re-deploy, target, and focus your capital really helps you generate a better return for customers or investors.

Join this exclusive, digital gathering with Microsoft Finance leaders to discuss how Microsoft Finance has embraced digital transformation: https://www.microsoft.com/en-us/artofpossible