Performance and growth
Driving organizational growth and operational efficiencies
As economies and organizations continue to navigate the effects of the pandemic, it is essential that conversations are taking place to ensure sustainable growth and prosperity for the future.
- How do we grow in a post-pandemic world?
- What does the future of work look like?
- How have customers' demands changed?
- How have different industries been impacted?
- What will they look like 10 years from now?
- How do you continue to deliver sustainable growth?
- And how do you remain ahead of the competition?
Organizations now have the opportunity to capitalize on the learnings and transformative efforts that were forced upon them by the pandemic and turn them into growth strategies founded on the basis of sustainable competitive advantages. This will require firms to focus on organization transformation, innovation, push the boundaries, design work processes with agility, flexibility and efficiency in mind and continue to anticipate and evolve with the changing needs of their customers, employees and shareholders.
Sustained and efficient organizational growth will require:
- Harnessing of robust data and analytics to gather customer and market insights
- Creating resilient supply chain networks built with agility in mind
- Delivering seamless customer and employee experiences through omni-channel operating models
- Connecting your front- (marketing and sales), middle- (operations) and back-office (support) functions to be better equipped to adjust to changing market conditions and unlock value for your stakeholders
- Inspiring the confidence of customers, employees and shareholders through a well-articulated and results-focused environmental, social and governance (ESG) strategy
Insights and resources
Accelerate
The key issues driving the audit committee agenda in 2024
Enabling value creation to sustain future growth
A guide to creating and preserving business value
Preparing for recession, planning for growth
As originally published in Defence Review magazine
The future of your business function
Enabling effective change to drive lasting business value
Industry perspectives
There is no one-size-fits-all approach when it comes to driving business growth and organizational efficiency. Whether your sector is booming or facing challenges, our team of professionals has the experience and deep industry insights to help your firm grow, mature and improve performance.
We work with organizations large and small – from family-run start-ups to multinational corporations and governments of all levels – to help support their operational, growth and efficiency objectives.
Fighting food insecurity
How can drive food security amid rising costs and supply chain disruptions
Transforming the finance function in banking
Building a successful change management program with sustainable, people-focused techniques
Reimagining student experience in higher education
Explore the key drivers to student satisfaction
How we can help
Whether you’re getting your start-up off the ground, looking to improve operational efficiencies for an established business or financing and planning for an expansion into new markets, we have the insights and experience to support your organizational growth and performance objectives. Our teams of professionals can help your organization grow, evolve, improve financial and operational performance and transform for tomorrow.
Accelerate
The key issues driving the audit committee agenda in 2024
Basic principles and bold progress: The evolution of the audit committee in a rapidly changing world
The business environment is changing dramatically – and at rapid speed. As some organizations may struggle to adapt in the near term, the technological, societal and regulatory changes will have far-reaching and lasting effects on financial reporting, business models and organizations’ interactions with society.
This past year, interest rates continued to rise new regulations were introduced environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) issues remained top of mind and we saw excitement and trepidation over the explosive rise of generative AI (GenAI). Audit committees play a vital role in overseeing the impact and risk these changes may bring, but to shepherd their organizations into the future, they must be prepared to evolve.
The traditional roles and skills of the audit committee have never been more crucial, but the context in which they’re used is shifting―in some cases, at breakneck speed.
Audit committees need to think about liquidity
Interest rate is now at levels not seen in 20 years—and businesses are feeling the pinch. Business insolvencies for the year ended August 31, 2023, increased by 36.7% compared with the previous year1 and the major banks are increasing their provisions for credit losses. Cashflow management will remain the litmus test for organizations, meaning audit committees must monitor it closely.
AI might change everything
While many people are excited about the possibilities of AI, audit committees need to think bigger. For example, introducing GenAI to an organization is a complex undertaking that requires the proper infrastructure, policies and procedures and the growing use of AI raises questions about its impact on people and how we view intellectual property.
Audit committees must assess the business case for AI in their organizations, look at data quality, rethink how intellectual property is viewed, understand stakeholder impacts and prepare for upcoming regulations.
Enabling Value Creation To Sustain Future Growth
Organizations that survived the worst of the pandemic are braced for yet more change, with 86% of CEOs believing that a recession will happen over the next 12 months, and 73% saying it will upend anticipated growth over the next three years.
Soaring inflation and interest rates, ongoing supply chain issues, global unrest and a tight labour market are creating a perfect storm of conditions for an economic slowdown. Leaders are under pressure to reduce costs and improve their cash position. But if not done well, this can come at a significant cost to the business.
Hence, it’s essential to define a strategic approach to value creation in order to confidently achieve measurable improvements to your revenue, operating margins, cost structures and working capital positions. Value creation is about uncovering sustainable efficiencies in how you operate and how work gets done to weather external forces beyond your control.
It’s about becoming responsive and agile, with business, technology, finance and operations working together in harmony. Our Seven levers to business value creation guide outlines a number of possible value creation levers and actions and can help your organization start thinking proactively about its approach and build resilience.
We can help organizations with their value creation efforts by:
- Completing a rapid performance review to identify opportunities and build a roadmap
- Analyzing data to build an accurate picture of operational, financial and tax positions, as well as cashflow
- Unlocking value through a range of performance transformation offerings
- Achieving measurable improvements to revenue, operating margins, cost structures and working capital positions
- Reducing complexity to enable faster decision making and improve responsiveness to changing market conditions
- Building capabilities for value creation that help maintain and improve margins, and sustain improvements over time
How we can help our clients
Enabling effective ESG reporting, including single and double materiality assessments, benchmarking, content identification and development, reporting structure and data requirements planning, and compliance reviews.
Aligning with various ESG reporting standards (ISSB, ESRS, SEC) and frameworks (TNFD, GRI, CDP and UN SDGs) including framework selection guidance, gap assessments, and implementation support
Developing an (inaugural) ESG report and/or an integrated report.
Enhancing data quality, including designing appropriate metrics, preparing effective methodology statements, improving the rigor or efficiency of the reporting process and relevant controls.
Assisting with ESG reporting system vendor selection and / or implementation. Desa has strategic alliances with Microsoft, ServiceNow, Salesforce and others to equip your organization with the right technology solutions and platforms to address your ESG reporting needs.
Preparing for third-party assurance over ESG reporting and data As market and stakeholder expectations evolve and reporting requirements become mandatory, the information that businesses report must be robust and independently assured to gain the trust of investors, stakeholders and the wider public.
Preparing For Recession, Planning For Growth
No two recessions are the same. They have many root causes and come in many forms. But there are ways to mitigate the pain and still make the necessary investments to drive longer-term growth and build organizational resiliency.
In the recent Global CEO Outlook survey, 92 percent of CEOs at biggest corporations expect a recession within the year. In separate research, SS surveyed 503 small- and medium-sized businesses (SMB) across USA and found that two thirds also expect a recession. While most, irrespective of company size, believe it will be mild and last three to six months, almost two thirds (63 percent) of large-company CEOs and 52 percent of SMB leaders say that a recession would upend their anticipated three-year growth plans.
As a result, many have taken steps to batten down the hatches. They have raised prices, trimmed costs, implemented hiring freezes or laid off workers, and postponed digital transformation plans. The risk of course is cutting too deeply or tapping the breaks too hard, making it difficult to not only take advantage of opportunities when they arise but ramp up for a recovery.
At worst, it puts them behind the eight-ball compared to more agile competitors and digital leaders. In some instances, business leaders have had little choice but to delay or postpone digital plans after pushing forward too hard during COVID to adjust to a virtual environment.
Nearly 70 percent of CEOs at the helm of large companies (with more than $1 billion in annual gross revenues) say they need to address employee burn out before continuing their digital transformation journey. A similar percentage are pressing pause to manage the associated risk and compliance aspects and six in 10 are doing so because they lack the skilled talent to manage the strategic and operational rollout. SMB leaders acknowledge that if they don’t invest in digital technologies, they run the risk of losing their competitive edge. They attributed their digital journey challenges to multiple factors including cost, not having the proper skillsets, and deciding on the right technology.
There are also workforce challenges. Well over half (57 percent) said they are finding it difficult to recruit engineers, software developers, and data scientists, and 53 percent are considering recruiting from other industries or countries to fill the gap. This is no different in the aerospace and defence industry.
Achieving sustainable efficiencies
Seven in 10 SMB leaders said the main goal of their technology investment is to reduce their operating costs. While operational efficiency should always be top of mind, cost optimization to ensure stability and fund future investments, such as digital transformation and customer experience, is of paramount importance with the likelihood of a recession as well as continued geopolitical uncertainty on the horizon.
The current environment provides an opportunity to evaluate overall efficiency through what is known as a ‘rapid assessment exercise’ that identifies inefficiencies and unnecessary complexity in the organization’s operating model. Through ‘value realization’, companies can uncover sustainable efficiencies in how the business operates and how work gets done. It’s not only about cutting costs solely to increase profit margins.
It’s also about achieving operational excellence by identifying and implementing efficiencies that are sustainable, that is, they last. This is hugely important in a highly competitive industry like aerospace and defence in which winning and fulfilling contracts can hinge on price. And, when companies attain sustainable efficiencies in their operations, the cost savings can be redeployed to support more strategic initiatives.
That means investing in skilled labour and/or the digital tools and technologies that distinguish leaders from the pack. Every dollar in cost savings counts when the economy turns south. And every dollar in cost savings in good times helps build resiliency that much more.
Eight in 10 CEOs at large companies told us they are placing more capital investment in buying new technology, up 12 percentage points from last year. When SMBs were asked what their most-important strategy is to achieve their three-year growth objectives, investing in digital technologies came second only behind organic growth, defined as investments in innovation, research and development, new products, and recruiting talent.
From improving data and analytics capabilities and visibility and traceability in supply chains to investing in additive manufacturing, connected machinery, more automation, or experimenting with augmented reality and the metaverse, the age of digital technology is marching forward at a fast pace. That in and of itself requires a shift in mindset.
Peter Drucker said it best, “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.”
The Future Of Your Business Function
In today’s dynamic and turbulent world, every business function of a modern enterprise is being expected to change the way it operates to drive efficiency while also increasing resiliency. To create lasting business value and effective change, digitally enabled and cloud-based operating models are a must that help ensure your ever-evolving business needs are being recognized and truly supported.
How are your functions performing? How are you reimagining your…
- Front office: Marketing, sales and CRM capabilities to drive a customer obsessed, digital strategy forward?
- Middle office: Operations, supply chain and procurement to drive agility to respond to changing market conditions, and resiliency to ensure continuity in the face of growing uncertainty?
- Back office: HR, finance and IT administrative services to empower your people, provide data-driven insights and move at market speed?
- Core: Cyber and risk to ensure your organization is secure and optimizing compliance and risk management to reap the benefits from innovation, consumer trust and market share? In our Future of function series, leading advisors provide insights to help you reshape your functional teams and the value they add to your organization to better compete in today’s dynamic world. We help you look at business modernization from a fresh vantage point. Explore them below.
Empower your business Accelerate value
While the Future of function insights support you in defining your vision, our teams can help you make it a reality, guided by Powered Enterprise, our proven functional transformation solution. Desa Powered Enterprise combines your chosen cloud-enabled technology platform with leading business practices to supercharge your business functions. This is just one aspect of our Connected. Powered. Trusted. approach to business transformation, which helps achieve enterprise-wide elevated performance to build future-oriented, successful organizations.
Fighting Food Insecurity
Food insecurity is on the rise, thanks in large part to inflation that has resulted in skyrocketing prices at the supermarket. But inflation doesn’t just affect grocery bills. It can be seen throughout the value chain, with rising costs for animal feed, equipment, labour, transportation and packaging. Inflation, along with climate change and animal disease, are just some of several interconnected factors impacting food system.
These factors are contributing to volatility in food prices and availability that affect the supermarket. Food Price Report 2023 predicts an increase in food prices by five to seven per cent in 2023, on top of steep increases throughout 2022.1 The 2022 Hunger Signs report by US found that many consumers are changing their purchasing behaviours to mitigate rising prices, such as buying more of their groceries on sale.
They’re also looking to buy different brands or private-label items to avoid paying higher costs, stocking up on items in case prices continue to rise, as well as buying in bulk or wholesale. Last year, food bank use rose to its highest levels in history, in part due to significant increases in the cost of living that pushed many people—including seniors, single-parent families and low-income wage earners—to the edge.
Diversification of food ecosystem
While the pandemic may have been a black swan event, it wasn’t the cause of food insecurity. Rather, it highlighted structural issues such as labour shortages and a reliance on complex global food chains.4 Areas of improvement to address food insecurity include strengthening domestic capacity, building resilience into supply chains and developing new markets.
But diversification will be key in adapting to more extreme climate events. An increase in domestic production could help to mitigate some supply chain issues and protect the food supply from disruptions related to global conflicts, border issues and trade embargoes.
By supporting infrastructure needed for a domestic market, it’s possible to shorten supply chains and increase resilience within the food system. That could mean looking at regional versus centralized production, and diversifying distribution centres to include smaller ones that service local areas.
Building sustainability into operations to better adapt to climate events could involve new technologies that enhance yields while minimizing inputs transitioning toward more regenerative forms of farming and using renewable energy sources to power farming systems.
Producers continue to look for ways to mitigate price volatility, such as diversifying their own suppliers and seeking sources closer to home. Export diversification, evolving with global market demand and mitigating labour shortages with automation could also help to re-enforce food supply chain.
Boosting food security through innovation
Agricultural innovation can help to lower food production costs through advanced technologies such as artificial intelligence, the Internet of Things (IoT), robotics, autonomous vehicles and blockchain, helping farmers and producers do more with less.
Leveraging technology to produce more food domestically, or using analytic insights from the supply chain to be more proactive than reactive, could help to combat input costs that drive food insecurity. For example, connected sensors and drones could be used to monitor soil moisture levels in fields, which in turn could help to increase yields.
Blockchain could be used to provide real-time visibility into the supply chain, so farmers and producers could adjust production to meet demand. And IoT could help farmers, producers, processors and retailers understand where food spoilage occurs across the supply chain to reduce waste. While an increase in domestic production could help to solve some of these issues, that alone won’t solve the larger issue of inefficiency and waste around just-in-time delivery models. A shift toward circularity in food and crop production systems means food that would otherwise go to waste is instead redirected into products such as animal feed, fertilizer, fabrics and even sources of bioenergy.
That helps to lower the cost of inputs going back into the circle, while reducing waste and regenerating natural systems. The 2019 Food Policy highlights innovation as an important part of its plan going forward, which includes investments to increase the agriculture and food sector’s capacity to produce high-quality food.
While AgTech can help farmers, producers and processors do more with less, investing in new technologies and processes can come with significant upfront costs—and more can be done from a policy and funding standpoint to start building a truly stable, secure food system. A collaborative approach among stakeholders, along with agricultural innovation and adaptive policies, can help prepare for the future of food.
Transforming The Finance Function In Banking
Banks are increasingly prioritizing value creation over value preservation. In the process, they’re embracing cloud ledger technology to standardize ways of working and AI-powered forecasting and data analytics to help the business navigate the future.
Banks that can temper their risk-averse appetites and create capacity to innovate are more likely to achieve true transformation in ways of working. Technology upgrades are an important part of any transformation, but fundamentally, its success is all about human and cultural change. Change management is therefore a critical part of the roadmap to success.
As data integration and technological innovation reduces the need for reconciliations and accounting production activities, finance departments will take on more enterprise process and performance roles. Finance employees need to be prepared for those new roles and ways of working.
A strong change program will not only address technological re-skilling, but also consider employee motivations, expectations and experience to help teams to push through the ambiguous and uncertain process of change. Given these challenges, what can finance leaders do to advocate for change and mobilize their teams through a successful and sustainable transformation?
Emergence of new tech
Until recently, organizations had limited tools available to help manage their sustainability footprint and ESG reporting objectives.
Microsoft’s Cloud for Sustainability is an example of emerging technology designed to address this gap. Using cloud and AI technology can give organizations a way to view sustainability performance across their business. This can help them make more informed decisions on a range of factors, from emissions management to sustainable procurement.
Tracy Lagasse, industry advisor, Financial Services at Microsoft, believes the value of this innovation should not be limited to reporting. She sees other benefits in the ability to harness data to drive actionable insights that improve ESG and overall business performance. “It’s not just about having the data so you can create a report and disclose what you are doing. You’re actually trying to move the needle on your metrics.
It’s about having the data so you can make a genuine impact on your carbon footprint, water consumption or reducing the waste your operations produce,” explains Ms. Lagasse. She says an organization’s ability to embrace innovation and make use of data is critical in meeting its long-term goals.
Microsoft took that approach to address its own ESG objectives. “We spent a lot of time looking at our data systems for tracking our own carbon footprint,” says Ms. Lagasse. She notes ways to reduce greenhouse gas emissions.
“These are things we can do with circular economics applied to cloud computing, so recycling our gear, or using telemetry with our devices to create products with better energy usage .”
Adopt winning tactics and techniques
Organizational change management has come a long way in the 25 years since John Kotter’s Leading Change, a foundational work on the topic. Change management is recognized as a must-have capability in all organizations, because of the speed and scale of change in today’s markets. And the principles of change management have shown to be valid across multiple functions and industries.
How should those principles apply in the context of banking and finance? In such context, organizations value reliability, predictability and control. Accountants, controllers, financial analysts and financial managers are professionals whose roles demand technical depth, business insight and operational excellence.
In banking, they deal with highly matrixed reporting structures and a web of regulatory requirements. Taken together, these factors create a working environment that is not change-friendly. Consequently, a leader can have a significant impact on the likelihood of success by choosing appropriate change management strategies. The following are identified from our experience in banking.
Tangible metrics to measure purpose
Even with a powerful CFO, transformations are difficult for banks to navigate. Multiple stakeholders and teams invested with substantial power may have different views about what’s best for the finance function. Some stakeholders, for instance, may be pursuing conflicting agendas or competing for access to shared resources, which can stall or complicate progress.
A clear, well-presented, and well-defined purpose for change is essential to gaining alignment. In finance functions, improvement goals are often expressed in terms of service quality, control and efficiency. However, while everyone can agree to vague statements such as “Let’s be better, faster and less costly,” real alignment of purpose comes from defined statements.
“Let’s get to a 3-day close from 6.” “Let’s reduce controls by 25% with no increase in error rates.” “Let’s reduce cost of financial reporting production by 20% and reinvest the savings in financial analysis and enable our people.”
Consulting on such statements can help to align stakeholders. More often than not, consultations help uncover competing priorities and concerns about feasibility. There is value in these conversations, not only for organizational learning, but in giving stakeholders the opportunity to express their views. They may not agree fully with the goal and urgency of the change, but are more likely to execute on future decisions after their perspectives have been heard.
Prioritize employee engagement
Organizations need to develop strategies that motivate people to learn the new ways of working, to adopt change and advocate for that change with their peers.
Professionals can be persuaded to commit to transformation if they find personal motivation in it.
The best scenario is when enterprise-change goals align with personal or career objectives. Depending on the maturity of the organization and where individuals are in their career lifecycles, personal goals and incentives to support change will vary.
In banking finance functions, we see differences between middle and upper management on the one hand, and a new stock of professionals on the other. Leaders should ask themselves: is the tenured workforce receptive to the needs and requirements of the emerging workforce? As context, people occupying senior roles often entered the profession without expecting any major upheavals, and tend to approach change with caution.
These professionals carry valuable knowledge about, and an established interest in, how things are currently done. In project-speak, these are the subject matter experts (SMEs) – their value to the organization, and often professional pride, comes from familiarity with the complexities in finance processes and data, and why those complexities exist. In contrast, workers earlier in their careers tend to have an enthusiastic outlook about how finance is changing.
These employees have different expectations around the nature of their roles, work-life balance, personal growth, and rewards and recognition. For these workers, professional development is often the most important incentive. Involving them in a change project, either dedicated or part-time, can be highly motivating if the role provides on-the-job learning, and even opportunities for formal training and certification in new professional standards and technologies.
And the experience of project work is often essential to preparing for future roles in middle and senior management. For workers more advanced in their careers, different incentives may be more meaningful. Often, tenured workers perceive a transition from a stable Business as Usual (BAU) role to a dedicated project role as a transfer to an uncertain future. They will want the security of knowing what BAU role they will return to upon project completion. They may also value financial incentives or promotion opportunities which reward them for their project contributions.
Reimagining student experience in higher education
The “Age of the Customer” is upon us and the implications for higher education cannot be ignored. Students are increasingly recognizing the power of their choices in their education, and higher education institutions must be prepared to expand beyond traditional learning environments to keep up with the growing demand for high-quality educational outcomes, personalized and engaging student experiences, and technology-based practices.
Desa undertook a national poll of students on their expectations for education in a post-pandemic world and learned that there is a prevalent belief that educational institutions of the future will bear little resemblance to those of today. Shifting priorities amongst students mean that institutions will need to adapt in order to compete in the future landscape.
Across student experience, four key drivers emerged as most influential to student satisfaction:
- Environment that is conducive to learning
- Seamless digital access to information
- Personalized learning experience
- Engagement along the student journey
The higher education landscape continues to evolve at an unprecedented speed in response to the changes brought on by the pandemic. Institutions that can deliver high-quality educational outcomes with excellent student experiences and qualifications, that are well recognized by employers at a competitive cost, will gain significant competitive advantage. Leveraging technology will increase accessibility and efficiency, lower costs and provide competitive services moving into the future landscape.
