Finance has a new role. It’s no longer about recording and reporting on results—it’s about driving them. Chief financial officers (CFOs) recognize this opportunity to create value for the business. Just over 80% of consumer goods and services (CGS) CFOs focus on identifying and targeting areas of new value across the business.1 Targeting value might include funding new product development, developing new products faster, identifying new channels and routes to market, and optimizing sales.
While playing an active role in making the right investments is important, today’s CFO must also help drive the operational changes needed to unleash optimal ROI for these investments. CFOs are ready to take this seat at the strategy table to influence operations.
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of CFOs believe it is their remit to drive business-wide operational transformation.
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Let’s take a closer look at how CFOs can use technology to build a powerful finance function and claim their seat at the strategy table.
Making data your ally
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Data is the lifeblood of informed decisions, but many CPG CFOs are at a disadvantage in capturing it.
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For instance, the retailers that CPG companies work with have regional country-based models that lead to a lack of process and data consistency. When this is the case, CFOs spend more time on manual reporting than on driving forecasts because data is consolidated and aligned at different levels and not in the proper hierarchy.
We asked CFOs the greatest challenges they expect to face in the next three years regarding enterprise-wide decisions and investments and the top response from CFOs was “inconsistent, inaccurate or inaccessible data” (31%).2 They need the right data governance to be able to consolidate and analyze data.
One of our clients—an international consumer goods company—through acquisitions was struggling with an aging and widely scattered technology landscape supporting different processes and resulting in poor data quality. We helped expedite the company’s journey to become an intelligent enterprise by implementing a flexible intelligent platform to support growth and enhance collaboration across the enterprise.
Scale with platforms
Having platform integration will improve processing, data visibility of stock along the supply chain and more, but there’s an implementation challenge. I understand that it’s not easy. One of my clients has more than 18 ERP systems at each manufacturing location, and they desperately need to consolidate to one.
Clients like this and so many others are wondering which path to take: SAP, Central Finance or make a full transition to S4 HANA. They are uncertain about the options and what criteria they should use to make a decision. Meanwhile, they are spending money on depreciating assets.
We worked with a Fortune 500 industrial manufacturing company on an SAP Central Finance implementation. With Central Finance, the company can now perform many different finance tasks out of a single system, with global visibility to all of their accounts payable, accounts receivable, and other types of financial information.
Right now, other members of the c-suite are doing the steering and developing insights for the business. This steering is best done with the help of data—and finance can play an essential role. Applied intelligence (robotic process automation and analytics) enables seamless end-to-end process execution and provides a basis for better reporting systems, and therefore more people in the finance function can play an active role in driving insights to action.
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of CPG CFOs are exploring how technologies could benefit the entire enterprise.3
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According to our research, 77% of CPG CFOs are exploring how technologies (such as big data, artificial intelligence, blockchain, etc.) could benefit the entire enterprise. But they need to scale these technologies to have maximum impact.
But they need to scale these technologies to have maximum impact.
Platforms, such as Arriba, Salesforce and S4 HANA, automate activities and provide the analytics capabilities that are essential to helping CFOs move their role from report generation to insight to action.
The action plan
CPG CFOs are on a fast track to being important creators of value within the organization. Taking these steps will accelerate the path forward:
- . Important finance tasks such as forecasting will be wrong or slow if data is not controlled and verified correctly. Establishing master data governance will help with fixing data at the source—not just intermediate levels—and it will clearly outline which roles within finance are responsible for updating certain data.
- Rethink the operating model. Establish centers of excellence that can determine what tasks could be moved to an intelligent business services model to free up capacity within finance. For instance, in consumer goods, many activities performed manually at a country level could be done at a business services level, freeing staff to work on high-value activities.
- Build out a platform strategy. There are many tools that can help with process execution. Look at peripheral solutions that can be bolted on to your existing ERP to embed the right controls into processes.
- Reshape the workforce skills. At the moment, most finance functions have too many people focused on transactional verification and consolidation activities and not enough time on analysis, insights and decisions. As we rethink the operating model and build out a platform strategy, new analytical and RPA-related skills will be critical. I will cover this in depth in a future blog.
As many businesses look to harvest value in this new era, the CFO can be a key player—along with the entire finance function. I look forward to hearing your thoughts on the changes you are making within your enterprise.
1. Accenture, “How CPG CFOs create new value: Digital and data,” November 2018, https://www.accenture.com/us-en/insights/consulting/cfo-research-consumer-goods-services