3 Key Pillars for Retail Finance Leaders’ 2022 Planning
The pandemic rewrote the playbook for many retailers. However, much of what businesses have faced over the last several months — and will continue to face in 2022 — is the product of years-in-the-making trends, all of which were accelerated by COVID-19.
Here are three such trends that will have a major impact on retail operations in 2022, and must play an essential part in any retail finance office’s planning for the new year:
1. Reorienting Around a Permanent, Post-COVID Supply Chain
The pandemic continues to crunch global supply chains, impacting everything from product availability to price inflation. While the worst of these effects are expected to subside in 2022, the manner in which supply chains are adapting to shifts in labor and inventory are here to stay. Retail finance executives will have to roll out new strategies to maintain supply levels amid labor shortages and consistently meet customer demand.
These strategies will be highly dependent on collecting and analyzing new levels of consumer data and balancing the logistics of meeting demand with the volume of both workers and products available. Additionally, finance leaders will need to re-evaluate how to shore up their workforces so there are enough people to staff their stores and distribution centers as consumer demand for products spikes.
2. Making Automation a Mainstay for Finance Tasks
Historically, the finance function has expressed concern about what automation could mean for their jobs. If critical finance responsibilities like monthly reporting, budgeting and revenue forecasting can be automated, then doesn’t that risk phasing out the job of the finance leader altogether? But as we’ve seen in other industries, this fearmongering has been overhyped. In fact, the opposite has occurred: Automation enhances people’s jobs by eliminating tedious, repetitive tasks that eat up time, giving finance leaders the freedom to focus on more interesting, innovative, value-driving work that requires a human touch.
Rather than shying away from automation, retail finance leaders need to tackle it head on in 2022, automating the projects and processes that don’t require their input so they can instead put their energies toward the tasks that need their insights and analysis. Going forward, the success of your finance function will mean striking a balance between automated work and enabling real-time decision making.
3. Pairing Digital Transformation With Simultaneous Tool and Process Integrations
Years of digital transformation initiatives have led to technology stacks packed with disparate and often redundant tools that are accruing more technical debt than delivering value. This trend was exacerbated by a surge of mergers, acquisitions and divestments during the pandemic, forcing enterprises to suddenly incorporate even more tools into their tech stacks.
Retail finance offices can get ahead of this problem by mapping out strategies to integrate new tools, processes and configurations into tech stacks in tandem with digital transformation initiatives. Acquiring new tools and figuring out later how they fit into the big picture isn’t working. The office of finance has a unique role within retail organizations to balance both needs simultaneously, allocating time and resources to employee training and workflows. This ensures these tools are delivering more valuable user experiences for workers and customers alike.
The last two years have brought anything but steady, reliable ground for retailers. Although 2022 may offer a “rising tide lifts all boats” reprieve for the retail sector, the best way for retail finance leaders to position their organizations for a successful rebound is implementing initiatives that take into account the reorientation of the supply chain, the need for automation in the finance office, and a more balanced approach toward the adoption of digital solutions.
Karlo Bustos is vice president of professional services at Board International, a leading software provider in the fields of planning, predictive analytics, and business intelligence.
Karlo Bustos is an experienced leader driving transformational change and assisting companies with their EPM process and technology needs. He has diverse industry knowledge within Finance and Accounting, Procurement and Operations, FP&A, Talent Management, Strategic Planning and Execution, M&A Integrations, Large-scale Program/Project Management, and Market/Competitive Analysis skills delivering the right result for organizations. Karlo is a respected and trusted advisor to executive management globally.
Karlo's financial analysis and global commentary around cash flow, finance, and macro business trends have been published in CFO Magazine, CFO Europe, CFO Asia, Wall Street Journal, Financial week, Business week, AP, Reuters, and Dow Jones.