CFO Challenges

In the current business environment that demands doing more with less, financial executives are especially challenged from two directions:
Streamlining their own organizations; making them more efficient, and often more strategic, without sacrificing the critical business functions required of them.

Assessing the efforts of other areas of the organization (operations, sales, marketing, engineering, information technology, …) to ensure that capital and operating expenses are yielding the intended results.

Healthy businesses continually test their effectiveness, even in good economic climates. They continually try to re-invent the ways they conduct business internally and how they relate to their clients. Some companies are more proactive than others. That is, they don’t wait for a crisis to envelop them before they re-assess their business structures. They embrace change, not only as a means of survival, but as a critical aspect of prospering.

This article represents the first in a series of six articles that deal with various examples of ways many companies (large and small) are dealing with improving their performance characteristics by "thinking out of the box".

Business Process Outsourcing – Telecommunications Bill Management
The next article in this series will focus on one such opportunity that directly affects a company’s financial performance and the effectiveness of the CFO’s organization. This article will discuss a business process outsourcing approach to controlling telecommunications expense, and with the potential added benefit of reducing headcount. The approach discussed is one that has the potential to reduce telecommunications expense. Few companies handle their own payroll. The state by state laws and tax codes make this function so complex that companies like ADP and Paychex have established huge enterprises to perform these functions for even the largest corporations. Similarly, telecommunications billing management has become increasingly complex due to deregulation, the proliferation of carriers and services, constantly changing service plans, difficulty in controlling the order functions and complexity of billing techniques.

Business Process Re-Engineering – Fixed vs Variable Cost
The second article in this series will address the challenges facing many companies with restructuring those aspects of their business that have developed heavy fixed cost bases. During the ‘90s many of these companies experienced tremendous growth. They were frequently challenged by how quickly they could react to new market opportunities rather than the cost effectiveness of the operating environments. This resulted in the deployment of large-scale infrastructures and staff growth to support the expected growth curve. We all know that this approach has changed dramatically, but the technologies and processes deployed during good times aren’t easily dismantled without more cost and risk. In today’s economic environment most companies are trying to trade fixed expense bases for variable expense bases in such a way as to maintain both scalability in the event of an economic comeback and rapid (almost automatic) expense reduction in the event of further economic weakness.

Alliances With Technology Vendors – New Ways of Doing Business
The third article will discuss the technology trends that are creating opportunities for businesses to re-invent themselves to achieve fundamental changes in how they pay for technology services and how they deliver business value to their customers. The article discusses how traditional telecommunications and technology companies are developing new ways for enterprises to better manage their internal business functions or reach their client base more effectively, more nimbly and with less initial investment than has ever before been possible.

Program Management – Executing Good Ideas
This will be followed by an article that discusses how many companies fail to achieve the ROI objectives associated with ambitious business transformation deployments due to poor execution. It’s not enough to have good ideas that have the potential to change how the company does business. If those ideas and plans aren’t delivered on time, on budget and don’t meet the key business objectives envisioned, then the investment can be largely wasted; or a critical market window can be missed. Sadly, most business transformation programs fail in some way due to lack of investment in basic program management expertise; the same skills that most senior executives possess, but don’t have the time to invest in their critical initiatives.

Technology Alchemy – Assessing IT Requests for More
The last article in the series will discuss how senior financial executives can better assess the need for technology investments to address system performance problems. Most technology departments are led by strong technology managers, but many of them lack the business skills to separate technical elegance from business need. The article will help identify standard profiles for technology ROI analyses. It will help the financial executive challenge the technology department to support requests for more … more hardware, more software, more bandwidth.






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