In the dynamic world of business, change is the only constant. Ben Cowan, Partner within the Business Transformation Practice at Eton Bridge Partners, specialising in Interim Management, reflects on the business transformation trends that have dominated the landscape in recent years.
2023 has been an interesting year for the transformation market. With sales volumes and revenues lower, clients have been sitting still when compared to the previous year which saw the “2022 bounce” as businesses recouped losses during a period of unprecedented demand. This year, by contrast, has been inconsistent, characterised by changing briefs and greater scrutiny of business cases and plans, resulting in slower decision making and drawn-out hiring processes.
We entered the year with significant uncertainty and concern over Government policy direction as we grappled with the fall out of the Truss mini-budget; soaring inflation, high and rising interest rates, weak underlying growth, higher debt repayments… Add to this picture, less investment by PE firms, the ongoing Russia/ Ukraine situation, lingering COVID and the cost-of-living soaring. Altogether this created a real lack of medium-term clarity on the direction of the UK economy and, as such, decision makers opted to ‘wait and see’.
Adapting to a ‘foggy landscape’
The beginning of the year felt quiet and there seemed to be a lack of confidence in the direction of markets, revenue forecasts and economic stability, but as we entered Q2, we saw a notable increase in demand and appetite for transformation. It seemed that clients had accepted the ‘foggy’ landscape in which they were operating and began to plan activities accordingly – this was broadly illustrated by narrower ambition of scale and scope of programmes, leading to less ‘Director level’ demand, and a more active ‘Manager level’ market. The summer months saw a typical slow down, and the expected September bounce didn’t happen until mid-October. We are now seeing increasing demand, grander plans and an air of increased confidence heading into 2024.
What’s in store for business transformation programmes in 2024?
As a result of the stymied appetite for investment in transformation throughout the majority of 2023, we expect there will be an uptick in activity in 2024, notably SG&A cost reduction/ efficiency plays: corporate functions’ centralisation, transitions from in-market to SSC/ BPO. Digital transformation – finding efficiency through technology – is another area where we expect to see increased appetite.
We are also hearing lots of noise around the ERP landscape. As another year crept by, systems are closer to being out of support and certain large players are understandably keen to drive their customers onto the latest cloud-based versions. As customers become ever more fickle, seeing your business through the eyes of the customer, and aligning business processes more closely to their journey is another area where we expect to see increased activity. The mining of customer behavioural data can drive better decisions, and with AI now hitting the mainstream, this won’t be just the domain of tech firms or forward-thinking companies.
We expect to see confidence continuing to grow as we move through Q1 and beyond, and we predict this will drive a shift from a client-led market to a candidate-led one. It won’t happen overnight as 2023 saw more interims finishing programmes than starting them, hence there is still an imbalance of supply and demand. However, certain skillsets aligned to the above agendas should be in demand and increasingly scarce as we move through the year. Clients will need to be more decisive to ensure they secure the top talent.
In conclusion, as we look into the transformative landscape for 2024, we seem to be adapting to a foggy phase of uncertainty.
The prospect of an uptick in a range of transformation programmes looks highly likely and the transition from a client-led to a candidate-led market looms on the horizon, necessitating increased decisiveness from clients to secure top talent. However, amidst the optimism, caution prevails, with external factors such as an impending General Election, geopolitical tensions, and sluggish economic growth reminding us that navigating the waves of change requires not just adaptability but a vigilant eye on the persistent headwinds.
Get in touch with Ben to continue the conversation.
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