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Finance automation and retail businesses


Our recent post on finance automation in the consumer products sector made the telling point that consumer-facing businesses tend to be well advanced in the implementation of technologies that enhance customer experience and achieve cost efficiencies.

Retail is no different. Here, too, we have a market where volumes can be high, where margins can be tight, and where customers expect great service at great prices – immediately, and across multiple channels.

The finance function has a major role to play in retail’s ability to deliver against these expectations, which is why automation of its processes has been growing in importance. It enables members of retail finance teams first, to drive efficiency and quality in their own function, freeing up staff from manual tasks for activities that will add greater value; and second, to enable finance to take its place at the center of the data-driven organization.

Our recent industry report, “Reimagining finance for the digital age – Retail sector,” gauged the views of retail’s senior finance leaders. It found they strongly believed – to a greater extent than executives in any other sector – that they must now play a more strategic role within their business, and that they saw automation as a way to do exactly that.

More than two-thirds of the retailers (69%) said they now have an overall vision of how they want to transform automation in the finance function, which put them well ahead of any other sector surveyed. In addition, more than a third of executives in the sector (38%) said their organization has now agreed a strategy for delivering this automation; only consumer products businesses have moved more quickly. What’s more, companies from the retail sector accounted for 19% of the automation “Masters” identified in our research – a small group of finance teams in the wider survey that were outpacing the rest in finance automation.

Retailers reported good levels of automation implementation across a broad range of tasks performed by the finance function. In several instances – notably financial planning and dispute handling – retailers were ahead of other sectors in fully or partially automating the processes. In some areas, however, they were doing less well: for example, only 42% of retailers had fully or partially automated invoice processing. This was among the lowest proportions identified in our sector reports.

Accelerating the pace

Increasing the pace of implementation will depend on several factors. One of them is leadership. While 49% of retailers said their organizations’ senior leaders had a good awareness of automation technologies, which placed them ahead of every other sector in the research, only 36% had a dedicated team in place to manage automation across the enterprise.

Another factor is the ability to build a successful business case. In addition to productivity gains, the key benefits retailers expected from automation included better and more informed decision-making (cited by 61% of retail respondents) and increased sales (57%).

Sadly, in some instances reality was found to fall significantly short of these expectations. Only 16% of retailers said they had fully realized the benefits of freeing up resources for higher-value activities. This was the lowest of all the sectors by some margin. Similarly, just 18% of retailers had captured the full benefits that automation can bring to forecasting accuracy; again, this was well behind the other sectors.

These are areas retailers will need to address. The good news is that respondents to the survey recognized this: more than half (57%) of those businesses that had not yet captured the full benefits of automation for unlocking better business insight expected to do so within the next three years. And on risk management, financial planning, regulatory and legal compliance, and continuous monitoring and analysis, retailers expected to make more progress toward the full benefits of automation than any other sector. What’s more, 61% of them believed that if it used effectively, automation could transform the finance function from scorekeeper to strategic business partner. This figure was almost twice as many as in other sectors.

Retailer concerns

Significant numbers of retailers were worried about skills shortages. Almost a quarter (23%) said they lacked relevant skills internally, which was more than the other sectors in the research, while 15% worried about their ability to recruit the right people to fix that shortage. And a significant minority of retailers (19%) weren’t sure they understood what skills they might need.

As automation increases, up to 81% of retail respondents expressed concern about the potential for fraud. Three-quarters of them (75%) worried about the possibility of operational disruption and delays as they implement new automation tools.

Finally, and significantly, 72% of retailers were concerned about proving the returns on investment in automation – more than in any other sector.

Taking stock

Our report provides a sensible summary of the next steps retailers need to take on the path to finance automation:

  • They must set a roadmap for moving from a vision for finance automation to its implementation.
  • Moving beyond the operational benefits of automation to longer-term, strategic gains is a critical next step.
  • They need to prioritize resolving skills shortages.
  • They must confront their well-founded fears about security.

Retailers have a better idea than businesses in many other sectors of the need to meet customer expectations swiftly, comprehensively and flexibly – and that’s why it’s highly likely they are already addressing the items on this short but practical list.

Read the Reimagining finance for the digital age – Retail sector” report.

Read the full Reimagining finance for the digital age” report.

To learn more about how Capgemini’s Finance Powered by Intelligent Automation solution can deliver enhanced value to your finance function, contact:

Aaron Hart is responsible for delivery operations, client satisfaction, and growth in the CPG, Retail and Distribution industries for Capgemini’s Business Services. With over 18 years of experience helping customers achieve their goals through global outsourcing solutions and partnerships, Aaron constructs technology embedded business process solutions to deliver the desired business outcomes for clients.

[1] The survey of 500 senior finance executives, conducted in January and February 2018 by Capgemini and Longitude, included 100 executives working in the retail sector (33 in Europe and 67 in North America). The conclusions from that wider research are presented in Reimagining finance for the digital age: