A growing trend for Interim in an industry evolving faster than ever
The Retail Industry is going through an intense period of Change and Transformation, as it moves away from a physical model to a more e-commerce model. As a survey recently showed, by 2040, it is thought 95% of purchases will be facilitated by e-commerce. The larger high street firms can no longer ignore the rise of Digital Transformation, and many now stand at the precept of “Change or Be Doomed.”
What we are bearing witness to in this tumultuous time for Retail, is the slow death of the old best practices: tried and true measures that have guided the industry since its inception, now, quite quickly and brutally, being replaced by a less grounded, more digital and consumer-facing model.
With such an intense period of change, the need for a strong and transformational-focused CFO is key: one who can aid in the restructuring of TOM and the improvement in supply chain operating efficiencies and management of cash flow, in a period of Brexit turndown.
A common theme from Retail clients over the first half of this year has been the requirement for upgrades in both back office technology, to achieve cost savings, and reduction in labour arbitrage, primarily to enable the business to be more agile in real time with the changing demands of the business.
Each retail channel yields data that makes it easier to track customer behaviour, and marketers are using emerging sales attribution models to better allocate marketing spend. The broad buying behaviours of consumers, consisting of single-channel, last-click, multi-touch and multi-channel for the more technology informed, are enabling CFOs to redefine their capital decisions.
Many CEOs are commenting that their finance leadership teams are not equipped in finance change and transformation and are too traditional and cautious in nature. Many of the interim assignments over the first 6 months of this year have been supporting CEOs requiring highly skilled Interim individuals, who can look objectively at their business with no emotional connection to the people and processes and outline a change programme. This often reflects a reduction in headcount and challenging the target operating model to ensure the business can remain competitive and survive.
Demand has also been driven by the changing behaviours of consumer shopping through various channels, often using six or more touch points before making a purchase. Indeed, Google found that ‘85% of customers start a purchase on one device and finish it on another’. The term “Omni Channel” often sparks lively debate, but many CEOs have commented that their organisations must deliver a consistent experience across each touch point to remain competitive in today’s market place.
An EY survey of 769 finance leaders across the Americas, Europe, the Middle East and Asia for The DNA of the CFO study, showed that 58% said they need to better understand digital, smart technologies and sophisticated data analytics. For CEOs finding the right CFO, who possesses not only the experience in managing Change & Transformation Projects, but also the forward-thinking mindset, are thus key.
All of these factors have led CEOs to turn towards Interim Chief Finance Officers and Finance Directors across the Retail Sector to lead and guide their transformational programmes. This has been borne primarily from the realisations of CEOs that their finance leadership teams are just not equipped in finance change and transformation and are far too traditional and cautious in nature.
An Interim CFO, introduced very quickly and possessing prior experience in Change & Transformation, possess the high impact mind-set necessary to quickly implement or objectively review the transformational programme. These factors have led Norman Broadbent Interim Management to witness over the first half of this year a 70% increase in demand for Interim Finance Directors and CFOs to deliver operational change into Retail businesses.
The view historically taken, that technology was primarily used to support a business initiative and viewed as an indirect cost, has been transformed for many Boards to a strategic business initiative and viewed as a channel for revenue.
CFOs, however, are still determining how to best define these investments’ impact on sales by channel, which then makes measuring return on capital that much harder to calculate, especially at the channel level. There is a growing lack of clarity around performance and management accountability. Digital Transformation Projects have become the new norm in the marketplace, as clients see the long-term advantages, as well as remaining competitive with their digitally savvy rivals.
For many clients, third-party consultancies play a part in shaping the strategic solution, but they also require Interim Finance Consultants to drive and deliver the programme of change typically, over a 12 – 18 month period. The ability to have a flexible resource with the capability of both driving change and upskilling their current workforce, has never been so business critical.
With the storm of Change & Transformation upon us, CEOs, now more than ever, require digitally focused, innovative yet cost-effective Interim CFOs to ensure their firm’s survival and rebirth into its digital sphere.