Blog > DATA STRATEGY IN THE CPG SECTOR: HOW THE CFO CAN DRIVE GROWTH
DATA STRATEGY IN THE CPG SECTOR: HOW THE CFO CAN DRIVE GROWTH
Wednesday February 16, 2022
The farsightedness of the individual entrepreneur is no longer enough today: companies need an information structure capable of making people understand how the market is evolving.
The Data Strategy in the Consumer Packaged Goods (CPG) sector is therefore a necessity that concerns companies of all sizes and should be understood as a tool that, properly placed in the hands of CFOs, can accelerate growth and make it constant and solid.
07 Apr, 2021
The farsightedness of the individual entrepreneur is no longer enough today: companies need an information structure capable of making people understand how the market is evolving .
The Data Strategy in the Consumer Packaged Goods (CPG) sector is therefore a necessity that concerns companies of all sizes and should be understood as a tool that, properly placed in the hands of CFOs, can accelerate growth and make it constant and solid .
E-commerce and disintermediation: a data strategy is needed in the CPG sector
A company aware of the importance of data develops data driven solutions that are channeled into a data strategy, whose presence is therefore an obligatory step. In the CPG sector it has become so especially since there is a rather significant transformation of distribution models and sales channels .
With the growth of e-commerce and the potential (and often already real) shortening of the distribution chain, communication is increasingly direct and multi-channel . The manufacturer is no longer solely linked to the GDO customer, but moves towards other channels and targets; its marketing actions have a more direct impact and on different types of interlocutors, whose reactions must be monitored and analyzed.
A data strategy in the CPG sector today allows to have that continuous information flow which, in the hands of the CFO, constitutes an essential and concrete tool on which to base one's strategic decisions .
Operational and strategic advantages of a data driven approach
When a data strategy is introduced in the CPG sector, the impact from an operational point of view is considerable because one works more concretely towards objectives, approaching challenges in a more pragmatic way. However, it is from a strategic point of view that a real paradigm shift takes place with the leading CFO .
From a "watertight" situation in which each salesperson manages his own distribution and sales channel by defining targets, turnover and margins, and each account follows its customers under the fleeting coordination of the marketing director, we move to an organizational structure in which the CFO has, in addition to the long-term vision , all the analytical tools to make decisions quickly and bring them into reality just as quickly, defining a set of strategic indicators to measure daily performance.
Such a present and proactive CFO allows you to harmonize sales management with that of marketing, production or research and development and to minimize the time that passes between the definition and application of a strategy, avoiding the creation of a series of documents with different results and objectives: from the 5-year business plan to the 3-month forecast, passing through the three-year and annual budget.
The ideal Data Strategy for CPG companies
In order not to have any performance constraints, to be scalable and to be able to collect unstructured data from social networks or other external sources such as customers and suppliers at any time, the ideal data strategy in the CPG sector must be in the Cloud .
Thanks to the “room for maneuver” thus gained, an intelligent , flexible and, above all, far-sighted data strategy can be implemented . In fact, it is necessary not to limit oneself to thinking about current needs, but to organize oneself in order to be able to respond to those that will emerge at a later time. Flexibility is also essential for a company that does not want to limit its growth by seizing every opportunity , even unforeseen, that the market can offer.
Data driven CFO at the helm of the company
Any C-level that can count on a good data strategy acquires power, but only in the hands of the CFO does it become an immediate lever for growth because only the CFO, in addition to the transversal vision on all processes, also has the strategic one . By connecting cross-departmental information, horizontally, but also those within the corporate pyramid, vertically, only he benefits from a 360-degree view of the various components of the company.
We can thus imagine the CFO every morning holding a sort of “joystick” and with it maneuvering the strategic levers to create every type of simulation and model possible, giving as input target, budget, growth rate or margin.
The challenge is to provide him with an environment that is articulated from the point of view of information , but proposed with the synthesis that C-levels need, and a data driven financial planning tool to simulate and evaluate every possible scenario through the main drivers to better manage. liquidity and seize new growth opportunities.
Collaboration and determination for a winning data strategy
A CFO with a data strategy but isolated within a company that is slow to embrace a data driven approach loses effectiveness. In fact, the adoption of distributed and governmental models and the start of a decisive and definitive digitization are fundamental . Only through the collaboration between operational and tactical plans, a growth strategy bears fruit.
It is equally important that the CFO himself demonstrates determination in pursuing long-term objectives by keeping the process of optimizing and increasing the database and data strategy active in order to consolidate growth and guarantee continuous improvements.