Critical takeaways from CFO Rising 2009
At the recent CFO Rising 2009 conference, we had the opportunity to speak with many senior finance executives about some of the most significant issues they face in the current economic environment and we put together the following summary of our findings. We hope this valuable information will help you and your business succeed in today's economy and beyond.
Senior finance executives are stressed and stretched to new levels.
Today's CFOs continue to wear multiple hats and expand their areas of influence to fields such as treasury, audit, compliance, HR, procurement and IT. Many Boards of Directors are driving greater CFO involvement in non-financial areas. In addition, CFOs are being asked and, in turn, asking their people to “do more with less.” To meet this directive, these CFOs are seeking alternative resources to help maintain productivity levels after layoffs. In this current climate, continued training and education continue to be paramount to CFO survival.
Working capital and treasury can create quick wins.
Recently, liquidity and availability of cash is gaining renewed focus and, consequently, so are the AP/AR processes. Payment timing is being used to maximize cash flow. In addition, treasury groups are placing greater emphasis on client risk analysis and scrutinizing delinquent and overdue accounts. We are also seeing a new focus on M&A activity given the current stock environment.
Information flow is becoming more critical.
CFOs are in desperate need of “real time” data to make quicker and more accurate decisions. This is driving the increased use of dashboarding, scorecards and KPI metrics, and Business Intelligence software, such as Oracle and Netsuite. In addition, since multiple systems create multiple problems (excessive costs, consolidation hurdles, manual processing, etc.), more companies are looking into ERP systems that link all departments.
Business process outsourcing and shared services are growing.
Business are migrating back to core areas of expertise and shedding non-core functions. By transitioning to a Shared Services model, they can consolidate transaction level functions into a single point of delivery.
Risk management is expanding.
Lately, new risk management projects are receiving strong encouragement from CFOs and Boards of Directors. Several areas within risk management are beginning to explode, including:
- IFRS – International Financial Reporting Standards
- IT security & PCI (functional F&A)
- Financial exposure (T.A.R.P.)
- Compliance/SOX/Internal controls
- Business continuity
IT and Finance continue to meld together.
More and more companies are asking the IT function and CIO report into the CFO and IT cost containment is driving greater CFO influence. In addition, dedicated IT finance departments are continuing to emerge and we are seeing an increasing demand for finance/IT analysts. As a result of this trend, IT software and new initiatives are focused on financial reporting and financial analysis.
Transformational cost containment.
Balance short and long-term improvements with a tiered approach for better mix of short-term savings and long-term structural improvement.
Top 5 talent management tips
- Use the economic slowdown to improve the team. Look to bring in great people who have been laid off elsewhere.
- Avoid the " Dead Sea Effect. " As IT consultant, Bruce Webster has noted, the Dead Sea has an inlet, but no outlet. Therefore, most of the pure water evaporates, leaving brine. Don't let your best people evaporate in a recession.
- Cut training and development last. That resource is critical to success in the post-recession period.
- Re-double efforts to recognize value. Sharpen ROI metrics, publicize victories, honor and award great performers and intensify collaboration between business units.
- Avoid overextension. In times when companies are being asked to “do more with less,” burnout becomes a major factor. Supplement your existing staff with interim support.
Remember, these current economic conditions require a new approach to management, so keep the following in mind:
- Make ongoing risk assessment a priority
- Cost containment is critical, but use with caution
- Review and adopt a transformational business approach
- Managing talent during these times is critical – think long-term and flexible
- Treasury and working capital can create quick wins
- Third party review and risk diagnostics create continued improvement
- Cash is king, so focus on liquidity
As job market specialists, Ajilon Finance Solutions has the expertise and resources to help finance executives meet their workforce challenges in any economic conditions. For more information on how to succeed as a senior finance executive in the current economy, or to discuss your workforce needs, please contact your local Ajilon Finance Solutions representative.
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