Time's up..."Hey Finance team, are our planning tools ready??"
Investors erratic behavior and news headlines last week triggered contingency planning déjà vu from March 2020. The Fed is on the case to tame the markets but economic headwinds can be diverted not destroyed and inflation is driving up material and labor costs faster than even the most agile companies can react. Dusting off the old Cost Takeout playbook of yesteryear will treat symptoms but not provide a sustainable cure which means all eyes are on CFOs to develop a value protection strategy that balances short-term Cost Cutting (some of this) and ongoing Value Optimization (more of this). This is an overwhelming ask for companies with immature Finance functions, let alone PE funds with entire portfolios of companies with this profile. But those leaders with an updated, digitized back office (think procurement tools, cash management governance, and scenario planning analytics) will have visibility into performance drivers necessary to inform fireproof response strategies. It's getting hot in here...
Originally Published 23 May 2022
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