CFO Priorities: A Commercial & Contracting ‘Call To Action’
As business starts its long road to recovery, Commercial and Contracts teams should expect a busy time. CFOs have a list of post-COVID priorities[1] which will place heavy demands on those teams – and it is no wonder we are already seeing examples of new hiring for talented commercial and contracts practitioners.
Revenue is the focus
Re-building revenue streams tops the list of CFO priorities. This is not surprising, since more than 80% expect severe degradation of revenue and profits this year. Far from being a cost-cutting agenda, the list represents a focus on customers and growth. Hence the greatest pressure is likely to fall on those in sales contracting and commercial roles, although focus on resilience and efficiency in supplier relationships and supplier-led innovation will certainly feature.
The PwC Post-COVID-19 Pulse Survey report indicates varying priorities across industries: “Technology, media and telecommunications CFOs (75%) are more likely than average to favour changes in products and services. Changes in pricing strategies are more likely to be cited by CFOs in energy, utilities and resources, who are also more likely to consider changes in geographic markets (37%). Health industry CFOs are more likely than average to consider changes to customer segments (48%)”.
Armed with this list, every commercial leader should engage with their CFO to discuss priorities and develop an action and resourcing plan in support of the growth and recovery agenda. Success matters not only to individual businesses, but to the world at large.
The CFO priorities for recovery
- Products or services (e.g., offer new, enhanced, repurposed or pared-down solutions) – 63%
- Pricing strategies (e.g., increase/decrease price, offer different payment terms) – 48%
- Distribution channels (e.g., change from in-person to virtual sales or delivery) – 36%
- Segments (e.g., sell direct-to-consumer, target new industries, move from B2C to B2B) – 34%
- Supply chain strategies (e.g., alternate sourcing options, change contract terms) – 30%
- Geographic markets (e.g., enter new markets, leave current markets) – 27%
- Talent (e.g., acquiring new talent, upskilling) – 27%
- Mergers, acquisitions, joint ventures or alliances – 25%
How IACCM is helping
The most obvious source of support from IACCM is in training and equipping commercial teams to respond rapidly and effectively. Already, more than 3,000 people have enrolled in the ‘Managing Contracts Virtually’ program that was released in May. Since March, more than 10,000 have joined our series of webinars dealing with high-focus issues such as renegotiation, collaboration and the shift in how risks are now allocated and managed. The IACCM Facilitated Certification programs in both Contract & Commercial Management and Supplier Relationship Management have allowed participants to engage with instructors and their fellow professionals in better understanding the impact and consequences of COVID-19 on their jobs and business contribution. Just this month, the launch of TASK (Tools, Analytics, Skills and Knowledge) provides an intensive upskilling agenda for both individuals and organizations and the podcasts in the Optimism Café series are inspiring with their stories of success.
Executive virtual roundtables bring together commercial leaders from within specific industries to share problems and ideas. IACCM facilitates discussion and leads resulting initiatives, such as developing new commercial models and terms and conditions. The IACCM Research Agenda continues to explore important topics such as achieving supply chain transparency, managing uncertainty through improved post-award management, evaluating post-COVID changes in negotiated terms, virtual negotiations and shifts in sourcing strategy. This is in addition to custom research for specific member companies and also contract design and simplification projects, to streamline contracting processes and increase user satisfaction.
The IACCM Skills Analysis & Benchmarking tool is in heavy demand as individuals and organizations seek rapid insight to the priorities for upskilling and the Capability Maturity Assessment is similarly providing corporate members with the insights needed to support rapid and targeted process improvement.
There is also an upsurge in requests for advice and in levels of use of the IACCM Software Selection Tool as organizations accelerate their plans to supplement or implement contract management technology.
And finally, bringing everything together, we will have the exciting IACCM VIBE Summit which for the first time unites the global Contract and Commercial community into a single event, delivered on a sophisticated, interactive platform that truly represents the diversity and inclusiveness of our times – and of the IACCM ethos.
It is a busy and demanding time for us all – but so rewarding to know that the work of the Contract and Commercial Management community is at the forefront in enabling business recovery.
[1] Source: PwC, COVID-19 CFO Pulse, 1-11 June 2020
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