The Changing Finance Market Amidst Brexit
by Jon Stringer, Director – Norman Broadbent Interim
Quoted in a recent report from Deloitte which surveyed 122 CFOs, 72% of CFOs expect some negative long-term effects on the business environment as a result of Brexit, up from 60% in the first quarter. The direct result of this is that only 8% of the UK survey CFOs felt the overall environment for business in the long term will be better if the UK leaves the EU.
A greater focus for organisations is now on emerging markets, with concerns over external risks about geopolitics having receded. This has been driven by a review of a slower UK growth as being a major risk and the opportunities internationally offering greater stability.
Over the second quarter, Norman Broadbent Interim encountered high levels of demand from clients looking for experienced finance leadership with good Plc governance exposure, the ability to manage new international portfolios through acquisition is key. The demand for Finance Directors and International CFOs with international operations expertise has been a common theme for both Plc’s as well as many organisations with Private Equity backing. Driven by the current economic uncertainty, CFOs and Financial Directors are finding their careers becoming more internationally focused rather than just London centric.
Whilst many organisations that have a greater focus on the UK market still remain on a defensive footing, prioritising cost control and cash flow is key. In Q2 only 22% of CFOs think now is a good time to take greater risk onto their balance sheets, which is well below the long-term average.
With favourable financial conditions are partially offsetting the effects of the UK domestic uncertainties. CFOs have sharpened their focus on expansionary strategies such as introducing new products and services, as well as expanding by acquisition.
Executive boards have had a key focus on business transformation. This has involved reviewing their operational delivery model, reducing back office functions in favour of creating new shared service centres either based in the North of the United Kingdom or moving support functions internationally. Furthermore, this has been compounded by the outlook for corporate revenue and margin growth deteriorating in the second quarter. Only 28% of CFOs are expecting revenues to increase over the next 12 months, down sharply from the first quarter.
Norman Broadbent Interim have experienced high levels of demand over Q2 for Interim Finance Transformation Professionals and Interim Shared Service Directors with expertise of outsourcing such areas as P2P, OTC and R2R individuals who have experience outsourcing and transitioning back office functions.
A recent survey of finance executives reported that leading edge technology is essential for organisations looking to finance function transformation. This is in line with many CFOs communicating that financial reporting has been hindered due to their technology not being flexible and agile enough to support business-strategy and business-model changes over the next two years.
Norman Broadbent have supported many organisations in Interim Management solutions in areas such as Shared Service Centre Transformations and Project / Programme Management where ERP Implementation expertise on finance systems was imperative. Clients wanted a flexible solution that was fit for purpose, with key deliverables incorporating upskilling the existing workforce and ensuring a seamless transition to business as usual.
If you would like to hear more about how we may be able to help your business, please contact Jonathan Stringer, Director, Norman Broadbent Interim Management, for an initial confidential discussion.
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