5 Ways CFOs Can Drive Consumer Relevance at Scale
As “relevance” increasingly becomes the core competitive battleground for consumer brands, companies are being challenged to create products, services and experiences that meet customers’ individual needs at just the right moment. That’s changing the rules of the game, and overturning decades of conventional industry wisdom.
The key change? The balance of power between brands and their customers is shifting — and the needle has moved significantly towards the consumer. A leveling competitive and financial playing field has brought numerous innovative digital-first brands into the market.
And with so many more purchasing options just a click away, consumers are increasingly picky about the brands they they buy from, favoring those that match their own values and meet their needs for immediate convenience.
For the big incumbent consumer brands, that’s creating a really significant challenge. Their traditional operating models simply weren’t designed for a consumer landscape this complex. To acquire the level of agility and responsiveness now called for, they face rethinking their entire value chains, all the way from ideation through manufacturing and retail to ongoing “service-oriented” subscription-based products.
New Roles for Today's CFOs
Chief financial officers have a crucial part to play in driving change forward. In fact, Accenture’s latest research reveals how much the role of the CFO is evolving across all industries. With access to deep financial and business insights, CFOs are ideally placed to build the case for change. They can also target operational improvements and the use of new digital technologies to drive efficiencies in the core business that will fund a pivot to more profitable growth.
Here are five ways CFOs can ensure individual consumer relevance on a global scale:
- Digitize finance … then the company. Using finance as a testing ground to explore new digital technology and the greater use of automation and artificial intelligence, CFOs can leverage the lessons learned to drive broader organizational change. Indeed, the research shows CFOs increasingly see themselves as “value champions” and “transformation drivers.” Four in five of those Accenture surveyed said targeting areas of new value across the business is a major focus. Furthermore, nearly the same proportion said they lead efforts to use digital technology to drive enterprisewide transformations.
- Harness data for insights. CFOs understand the value of speed and agility to a business, as well as how real-time data visibility supports it. Over half of those surveyed said they’re currently working towards real-time analysis of business performance (and 89 percent expect to say the same in three years’ time). They also say that inconsistent, inaccurate and inaccessible data is the greatest challenge they face in their day-to-day work. Today’s CFOs are taking a lead on data governance. Understanding the value of data as a strategic business asset, a large proportion of surveyed CFOs (84 percent) say they’re taking responsibility for their organization’s data governance. That’s more than in any other industry surveyed.
- Develop the future finance workforce. CFOs are taking a more holistic approach to planning their future talent needs (including blending human and machine intelligence and innovative digital technologies). They see how their own role profile is changing, with anticipating and managing risk, long-term strategic thinking, and insight into new technologies fast becoming vital CFO capabilities. And they see that change reflected in the wider finance organization too. Innovation talent is now the most highly desired skill set for junior finance staff.
- Drive a deep transformation of operations. Operational efficiency is central to driving broader change because it’s the most effective and sustainable way of freeing up capital to invest in a pivot to the new. CFOs are increasingly looking beyond SG&A expenses and using methodologies like zero-based budgeting (ZBB) to target efficiencies in the cost of goods sold (COGS). Accenture’s research has shown that ZBB can lead to rapid COGS savings of up to 10 percent.
- Be the architect of value. To realize the goal of achieving consumer immediacy and relevance on a big scale, companies need to adapt their supply chains to support customer personalization across a wide array of channels. That’s a complex endeavor — and very difficult for an individual company to do alone. Therefore, most will need to leverage a much wider ecosystem of partners across the value chain. This is another area where CFOs can support change, by bringing a data-driven approach to selecting new partners for the business, ensuring the process remains focused on outcomes that add value.
Ultimately, this evolving role for CFOs is about expanding influence across the business. CFOs are now strategy players who are expected to use their knowledge of data, analytics and finance to forge new cross-organization strategies while influencing and guiding business units. As the marketplace continues to change so quickly and so profoundly, talented CFOs will be increasingly vital in delivering consumer relevance and capturing new growth.
Paul Prendergast is the lead for Accenture's Management Consulting Practice for the products industry.
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