The CFO: The Transformation Driver?
Managing Director for the consulting practice in the products industry at Accenture, Paul Prendergast, discusses the challenges businesses are facing due to changing consumer expectations, preferences and behaviours and ways to solve them.
We have seen huge disruption across a range of industries, with no signs of slowing down. For the big consumer brands, the relentless pace of change is creating higher consumer expectations and rapidly levelling competitive playing field on an epic scale.
Consumers are firmly in the driving seat. They’re using digital platforms to buy directly from manufacturers, bypassing traditional retail. Their preference for convenience is making subscription models ever more prevalent. Above all, they expect their consumer goods brands to provide the products, services, and experiences that meet their individual needs at just the right moment.
And the smaller players are giving them exactly what they want but turning "business as usual" on its head and creating new models on agile operating structures that engage in a larger ecosystem and accelerate innovation to satisfy growing consumer demand for low cost, personalised products and services.
The winners will be those who can achieve an incredible amount of organisational agility – something that many just don’t have yet. It also calls for a rethink of the entire value chain, all the way from developing new concepts, through manufacturing, to the store shelf and beyond.
Companies searching for growth must solve these challenges, injecting agility across the business, leveraging a wider ecosystem of partners, and delivering relevance at scale for a marketplace of millions of individuals.
CFOs in the driving seat
Chief Financial Officers are uniquely positioned to help drive this journey forward. They have a crucial role in driving the efficiencies in the core business. They have the necessary insights to build the business case for change, targeting operational improvements and the use of new digital technologies to unlock value and drive more profitable growth.
Accenture’s research shows that CFOs understand the need for speed and agility today, with over half those surveyed (58 percent) saying they’re working towards real-time analysis of business performance. Interestingly, that’s expected to rise to a massive 89 percent in three years’ time.
CFOs also see their role changing. They’re now just as likely to view themselves as “value champions” and “transformation drivers” as their more traditional business functions. For instance, 81 percent of surveyed CFOs say targeting areas of new value across the business is a major focus, while 78 percent say they lead efforts to drive business-wide operational transformations and efficiencies through digital technology.
Facebook’s Project Libra increases faith in digital tokens but won’t threaten Bitcoin, say experts
New roles, new skillsets
Delivering relevance at scale means adapting the consumer goods supply chain for new levels of personalisation and multiple sales channels. Given the challenges of doing this alone, most brands will need to leverage a much wider ecosystem of partners across the value chain. And here CFOs have a vital role to play. They can bring a data-driven approach to selecting partners, while ensuring this complex endeavor remains focused on the value-adding outcomes the business is targeting.
We are seeing more CFOs actively taking a lead on data governance. They understand the value of data and see it as a strategic business asset, with 84 percent of finance departments taking responsibility for their organization’s data governance (higher than in any other industry surveyed). In fact, “inconsistent, inaccurate and inaccessible data” is viewed as the greatest challenge facing today’s consumer goods CFOs according to Accenture Research.
These new requirements are changing the CFO skills profile. CFOs themselves say that anticipating and managing risk, long-term strategic thinking, and insight into new technologies are now their most important capabilities. And they know the broader finance function needs to change too, with the ability to innovate now the most sought-after capability for junior finance staff.
Five actions every CFO should be taking today
So, what are the immediate priorities for consumer goods CFOs as they drive relevance at scale for their brands? There are five actions every CFO should be taking today:
Digitalise finance – then the company. Finance is an ideal testing ground for digital technology, automation, and AI. CFOs should be using their experience and lessons learned to drive a digital transformation across the business.
Harness data for insights. CFOs know the value of data visibility and should champion the use of real-time analytics and insights across the C-suite and beyond.
Develop the future finance workforce. CFOs should be planning holistically for their future talent needs, including promoting the greater use of AI and other innovative digital technologies.
Drive a deep transformation of operations. CFOs should be considering zero-based budgeting as a means of creating spend visibility, driving the efficiencies that can fund a pivot to new growth.
Be the architect of value. CFOs should be influencing decisions about ecosystem partner organisations, ensuring every move is focused on delivering ultimate value for the business.
Above all, CFOs need to put themselves at the center of business decision making as their companies pivot to the operating models that deliver consumer relevance at scale and capture new growth opportunities in a highly complex and uncertain marketplace.
- How does the open banking landscape look going into 2023?Banking
- Executive Q&A: James Crosby, CEO and CTO at FencoreFinancial Services (FinServ)
- Plaid acquires identity verification platform CognitoFinancial Services (FinServ)
- SteelEye: Enabling financial firms to meet regulationsFinancial Services (FinServ)