Strategy and Innovation

Developing a framework to turn insights into action

In this point of view, we’ll look at how the right strategic framework can achieve value for finance. This includes improving employee satisfaction and safety and providing stakeholders with clear goals that translate into individual benefits. A framework can help encourage support for company strategies through regular and effective communication. The right framework can also help identify several areas to prioritize human and financial capital, execute and optimize initiatives, and validate success through enterprise performance management (EPM).

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ANCHOR TITLE FACTS

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Survey highlights

62% cite unforeseen geopolitical risks as a top organizational challenge in MANAGING impacts of inflation
82% expect to raise prices by the rate of inflation (52%) or more (30%)
72% envision passing on price increases in three to six months
74% are looking at right-sizing staff as a means of offsetting the impact of inflation
Nearly 40% plan to allow all employees to work remotely to reduce real estate and related spending
65% anticipate increasing their technology spend by 5% to 20% to mitigate inflationary impacts

Accelerating top-line growth
Despite falling consumer sentiment, 82% of companies expect to raise prices by at least the rate of inflation. At the same time, nearly 60% may look to develop new products at lower price points in an effort to maintain or increase customer wallet share.

Protecting the bottom line
In the face of wage inflation, companies are re-evaluating the right size, structure and location of their workforce. They are considering workforce reductions (48%), cuts in non-salary compensation (47%) and relocating staff to lower-cost regions (53%), while also exploring refinancing (54%).

Planning for exogenous factors
With unforeseen geopolitical risks leading the list of organizational challenges, companies are realizing that “dark swans” are lurking everywhere. They are factoring geopolitics into their risk planning, on-shoring or near-shoring more functions, and building resilience into their supply chain and foreign exchange processes.

Responding with technology
With headcount reductions and right-sizing programs looming, companies expect to counter the potential hit to productivity with technology. Among respondents, 65% expect to increase tech spending by 5% to 20%, with AI, machine learning, blockchain and cloud computing increasingly seen as inflation-fighting investments.

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Key survey findings

Responding with technology

Overcoming challenges in managing inflation

Geopolitical uncertainty (63 percent), Rising costs of raw materials is 60 percent, and supply chain bottlenecks (55 percent) continue to present big challenges for consumer and retail companies in their efforts to manage inflation.

Maintaining profitability in an inflationary environment

In managing the inflation-driven increase in the cost of goods, nearly half of the C&R finance executives surveyed (47 percent) believe their companies will not be able to maintain the same level of overall profitability.

Staying true to technology investment

Traditionally, economic downturns trigger companies to cancel projects, or put them on hold, sometimes indefinitely. However, there doesn’t seem to be a halt in technology and digital transformation for C&R companies as 38 percent of respondents plan to increase their technology spend by 10-15 percent.

Investing in top line growth

Despite slowing economic growth, C&R companies are looking to remain competitive and opportunistic. This is evident by the fact that 90 percent of C&R respondents expect to increase capital expenditures between 5 to 20 percent during the next 6 to 12 months.

Read the white paper, CFO Agenda for Elevating Finance

This paper looks at five distinct but connected pillars to elevate finance and turn disruption into opportunity. Our insights here are based on KPMG proprietary data, industry-sponsored focus groups, field research and insights gained directly from numerous KPMG transformation engagements across multiple industries.

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