In 2019, activity slowed in developing and advanced economies, with trade tensions weighing on exports, industrial output, and capital spending. However, despite last year’s slow pace of global economic growth, Q4 2019 was exceptionally busy for our CFO Practice.
Due to UK economic uncertainty, many clients took urgent action – these tended to centre on transformation projects designed to reduce costs and simplify operational processes. For example, we saw an unprecedented number of mandates being signed off for interim CFOs with turnaround expertise. We also saw demand for Interim Business Transformation Directors able to support Leadership Teams in implementing cost reduction programmes whilst simultaneously supporting internal client comms/messaging.
2020: What now?
- Many within the CFO community are putting greater focus on their Supply Chain & Procurement functions. According to Retail Week, 29% of retailers don’t have true visibility of their supply chain. A Norman Broadbent survey in Q4 2019 found that 85% of clients felt a more effective procurement strategy globally was business critical to their survival.
- Technology is a common issue for all CFOs having to operate their businesses on multiple ERP systems globally (often not fit for purpose).
- In our survey we found that 65% of CFOs said even though they had an IT Department, there was no overarching tech strategy to address issues around business intelligence. Similarly we found there was often no defined tech road map to enable more automation and reduce the burden and cost of manual intervention in the production of accounts for many global organisations with multiple sites. Because of this, many CFOs have been considering establishing shared service centres out of city centres to reduce cost of rent and labour.
- Treasury has been a continuous focus for the majority of CFOs. Renegotiating banking covenants and achieving cost savings through consolidation of Banking suppliers has been business critical. Over 42% of CFOs surveyed said their Treasury capability was a) limited to cash management, b) did not have the capability (internally) to implement Treasury Management Systems, and c) could not effectively manage the risk associated with moving to different Banking providers.
- Many clients continue to opt for fixed term contracts as opposed to daily rates due to the IR35 legislation. As the demand for highly skilled interim talent continues to outstrip supply, clients are being more creative and building into salary packages completion bonuses to ensure they retain contractors over the term of engagement and ensure successful outcomes.