These market conditions fall into three main areas: Money, Energy and Supply. The cost of capital, energy cost volatility, regulation, and geopolitical disruption have all impacted on business and will continue to change the cost base of a business on short notice. Modern, high performing finance functions recognise that the speed of change has radically increased requiring much higher precision and speed in forecasting and decision-making, to ensure that relying on yesterday’s information won’t sink today’s business.

Finance must be in the driving seat for designing new organisations which can cope with these changes, because no one else has a complete view across the landscape and making decisions in isolation leads to local failure. Only finance has visibility covering everything from input and overhead costs, to consumer preference, to the impact on margin.

We see this review reflected in the priorities of FTSE 40 controllers, who highlight the need for:

• (Affordable) Beneficial technology, getting the most return on investment
• Value from their data assets, to respond to shocks quickly
• Staying ahead of new controls regulations and requirements
• Responding to changes in ESG reporting and compliance

Getting these decisions right will give the business confidence to continue investing in growth platforms like new sales channels, new business models, store modernisation, marketing and developing their people, providing the right platform for the future.

Technology to beat the business trap – What are the ‘pivot’ options?

Businesses are faced right now with either pushing up their prices and hurting customers or cutting their margins and swallowing supplier price increases, neither of which is palatable; technology can offer a third option; using the capabilities we will describe in this article, the CFO can direct resources to help sustainably grow the revenues, margin, and remain competitive. How does this modern technological alchemy work?

The CFO supports the top line and bottom line of the enterprise, traditionally in a relatively passive manner delivering visibility and controls over profitability, liquidity, auditability, and compliance. Technology is giving the CFO the opportunity to become active in the health and growth of their businesses. To make the CFO a ‘star’ contributor to the business, at a time of severe challenge, we would encourage exploring the innovative finance capabilities described in this article.

Reimagine Finance Operations

The CFO has the opportunity to leverage technology, data and insights to model future business options indeed, to critically analyse prior decisions, what worked well and what didn’t. According to Gartner, decisions governing everyday operations often lack financial rigor, which can result in a loss of 3% or more of profits for organisations. This is primarily due to fragmented systems with siloed operations and an inability to access financial information in real time to make proactive decisions. As a result, CFOs recognise the need to modernise finance operations to reduce manual effort and enable their employees to focus on more value-added activities. A case in point is , which faced rapid growth after COVID-19, resulting in high volumes of data and an accelerated need for the company’s digital transformation. The e-commerce and fintech leader in Latin America achieved an 85% automation rate in treasury and cash management by streamlining their finance operations on a unified platform.

Delivering Assurance

It is expected that over the next 6 months the UK will be transferring from the Financial Reporting Council (FRC) to the Audit Reporting and Governance Authority (ARGA). Although recently the government have stepped back from their plans to introduce UK Corporate Governance Code led improvements around Financial Controls and CFO attestation statement on Fraud, the change in regulator is expected to deliver sharper teeth and greater pressure on external auditors to report more accurately. The upcoming changes to the Economic Crime and Transparency Bill, relating to Fraud, will include a new ‘failure to prevent’ offence and is currently moving through parliament, due in the firstquarter of 2024. A recent University of Portsmouth report outlined that Fraud may have cost the UK private sector in the region of £158Billion in 2022. Fraud still represents a 5% revenue loss for many organisations, money which if protected could be reinvested to promote growth. Business resilience is a key area where an integrated controls, risks management and machine learning/AI technologies have proven to deliver significant loss avoidance whilst also enabling businesses to remain on the correct side of regulatory requirements.

Optimise Cash Management

The CFO and the finance team need to have great visibility, effective control and collaborative execution for that finite, and most valuable business resource, cash! The poor understanding of cash flow is the key reason why many businesses fail. Businesses need integrated, intuitive tools that give them instant insights on the complete value chain, including receivables, payables, and associated supply chains. They need actionable information about cash, liquidity, and working capital, and their treasury platform should allow them to predict liquidity, make proactive decisions and mitigate financial risk. Zalando achieved 100% visibility into cash and accounts through redesigning their treasury and risk management and Zalando Payment system built their unique computing and monitoring model to provide deep insights into its factoring related cash flow movements and became compliant for regulatory requirements as a multinational .

Manage Profitability

Finance teams need to be active participants in managing profitability for the business, they may not be responsible solely, but they can best support the business by providing finance data and models in a timely, reliable and enabling fashion. The typical challenges that prevent retailers from proactive steering is the poor visibility to the real economic costs of products, customers and channels. According to Ventana Research, the most commonly mentioned challenge for companies in managing customer profitability is analytics. Using the right technology retailers can understand the real cost dimensions of their business and better control the margin challenges. Brakes – leading food service supplier in UK – achieved 2% improvement in margins through remodelling and digitizing their pricing and .

The CFO and his team have the opportunity to play an even bigger part in the future success of their business. Not only are the Finance team the keepers for financial data, they have the opportunity to proactively consult with the business teams; partnering in agile decision-making, providing business insights, actively supporting investment choices, helping identify success or failure in a rapid manner. Transforming the finance function provides the opportunity for businesses to escape the business trap of higher prices or lower margins, it can help you to pivot to increased competitiveness, revenue growth and success with customers, these are definitely the numbers worth pursuing.

If your organisation would like to know more about how these solutions can support your success, then please contact the authors:

• Shaid Latif, Industry Advisor Expert – Retail & Life Sciences at SAP
• Elif Kuralay, Industry Advisor at SAP
• Blair Robinson, Partner, Business Consulting at EY
• Matt Smith, Alliances Director at EY

The post Using Finance To Manage The Bottom Line And Pivot To Growthâ€� appeared first on 51·çÁ÷UK News Center.

This is the first peak season where all of these macro-economic factors have culminated at once, making it unpredictable, to say the least. Not only is this peak going to be a test of retailer’s internal systems, supply chains, sales forecasts and overall resilience, it will be an acid test for consumer confidence, which could potentially provide some signalling of what the economic outlook for the next year may look like.

So how can retailers work smartly to make a successful Golden Quarter? Having a strong brand and product proposition is always key, supported by attracting customers through effective marketing strategies, all underpinned by secure multi-channel trading systems.

We know your plans for a prosperous peak are well underway and while there’s no silver bullet to ensure success, we share a few last-minute tips to help retailers tackle the Golden Quarter as efficiently as possible:

1-ÌýAttract Customers Through a Bit of Christmas Cheer 

Still reeling from the impact of a global pandemic and lockdown life, combined with multiple wars disrupting supply chains, a climate crisis, high inflation and cost-of-living concerns, and it’s fair to say the world looks a little gloomy right now. But Christmas is a time where consumers want to get lost in the magic of the season, so this year provide escapism to solidify brand loyalty.

The importance of the physical store remains a critical part of every retailers delivery strategy. Absorb the Christmas atmosphere, embed it into your physical and virtual presence, making sure every customer visit is a happy & memorable experience. You just need to look to the master’s of the art like Harrod’s, Selfridges and Fortnum & Mason’s festive displays, to see how Christmas cheer and branding make a tangible difference to mood, footfall and crucially trading performance. Online, offer that memorable experience by using personalisation technology to better understand individual customers, and serve them accordingly. For loyal shoppers, offer little acts of kindness such as free delivery or a surprise gift, to reward them for spending their hard-earned money with you, it doesn’t go un-noticed and loyalty is worth the effort.

2- Revenue Diversification

Over the last year, more and more retailers have been developing own-brand products to reinvent their assortment and value proposition to improve margin. Now is the time to really let those products shine and encourage customers to try out something a bit different, in the hope that they keep buying that own-brand label throughout 2024 and beyond.
Equally, in a worrying time for the balance sheet, subscription services are making a comeback. Just take a look at Pets At Home which is combining product and services as part of its medium-term strategic vision announced in its record financial results earlier this year. Using its app, shoppers can book veterinary appointments, order repeat prescription deliveries and manage nutrition subscriptions, all in one convenient place.

The retailer understands the importance of having that consistent and repeated cash hitting the P&L, while customers can plan their finances more efficiently. Just make sure it’s what shoppers truly need, so it’s not the first direct debit to get cancelled when wallets tighten. So when that customer comes in to look for a stocking filler for Mr Meowington, just make sure that you share that a discounted subscription is also offered for the day-to-day essentials at the same time.

3-ÌýImprove Cost-efficiency 

The main way to improve cost efficiency and protect profitability is to reduce business costs to cope with external pressures. You can start with streamlining processes with the use of process insight tools like , then use ‘process automation’ where the Signavio report shows you how you can improve your business and where you can benefit the most. Also consider a technology platform to boost innovation and democratise coding as well as getting the business departments involved in supporting your competitiveness. It’s not just the IT department that can develop apps to boost your differentiation, or turbo boost important processes you identify.  Low code/no code solutions such as which allows retailers to be agile and accelerate innovation, even if the big technology transformation project is still underway – integrate existing applications, dabble in AI, and create useful apps, automate processes and design business sites with drag-and-drop simplicity.

Take the great British retail Icon Harrods. The 174-year old department store was looking to and is using on 51·çÁ÷Business Technology Platform, to connect both cloud and on-premise technologies, whilst simplifying it’s technical landscape, to ease communications and transactions with technology partners. By connecting several systems and vendors across myriad technologies, this helps Harrods address integration challenges and become more flexible to meet the fast-changing business needs – especially during peak season.

And talking of external pressures, when it comes to Black Friday, keeping an eye on competitors will be essential. But having intelligent software will allow retailers to implement smart pricing and promotions, to get the business through the period selling successfully whilst maintaining as much margin as possible.

4-ÌýLook After Your Workforce 

Tis the season for the ‘Christmas temp’ and last November there were nearly 28,000 jobs available across the UK, . That’s a lot of additional people to keep contented, meaning HR systems are critical to manage the extended team. Use AI like to sift through CVs or find the right internal talent, whilst making sure to take the time to ensure contracts are up to scratch, training is simple and effective, and complex shift patterns are easy to navigate. Why are you doing this, because at the end of the day, a happy workforce will drive better customer experience, and be more successful at selling during the busiest time of year.

5- Make Sure your ESG Strategy is Up to Scratch

This year, customers will be scrutinising prices and value for money like never before meaning they will spend more time assessing brands to make informed decisions rather than last minute panic buys that no one actually needs. The more time spent with a brand the more opportunities there are to surface ESG endeavours – tell the story of a fair supply chain or the net zero and green endeavours the business is making to future proof the planet – this is the time of year all eyes will be on retail, so make it count.

The post Retail’s 2023 Golden Quarter – The Critical Christmas Countdown appeared first on 51·çÁ÷UK News Center.