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
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.