As global business continues its slow recovery from recession, political and economic uncertainty continues. Businesses need agility to react to this uncertainty, to respond to or better anticipate change.
Agility comes in many forms, although common global business strategies remain in-play – innovation to disrupt or protect; expansion in new or current markets; optimising returns on existing assets: divesting of non-core and underperforming assets.
While the CFO’s overriding priority is to drive the company strategies - pressure remains to reduce costs (will it ever go away). So, how does the CFO balance these priorities?
In talking to business leaders across the globe, I see 3 key focus areas on their agenda:
- Competitive cost structure
- Improved decision making
- Increase standardisation and simplification
I also see, almost without exception, the CFO is expected to do this with less – indeed, in a recent Hackett Group study CFO’s predicted staffing reductions of 0.7% and operating budget reductions of 0.1% in 2015.
Can the CFO support the strategy, still deliver their agenda and do so with less? Anthony Snowball (Principal, Global Benchmarking Practice Leader, The Hackett Group) wrote “world-class finance functions – which have embedded the principles of continuous measurement and improvement in their cultures – are 46 percent more productive than their peers, with fewer full- time-equivalents (FTEs) per $1 billion in revenue and 52 percent lower costs.
Having worked with some of the world’s largest enterprises over the past 15 years and built programs to achieve their business and individual goals (which unsurprisingly are in-the-main very similar), I have highlighted below 7 tactics that help achieve these goals;
- Develop a programmatic approach to cost saving
- Generate actionable spend analytics to improve decision making
- Provide procurement with actionable data
- Bring all employees to the cost management game
- Leverage technology to simplify workflow
- Identify shadow spend and eradicate or embrace it – but manage it
- Automate administrative tasks to steer colleagues towards value creation