cfo whitepaper the path to prosperity
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Continued cost discipline will be a source of competitive advantage as the recovery unfolds, say finance executives.TRANSCRIPT
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The Path to ProsperityCFOs at small and midsize companiesOn post-downturn cost control
Copyright © 2011 CFO Publishing LLC
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Published Q4 2009
Key findings included:
• Finance Executives indicated that cost reduction would play and important role in profitability. More so than in the past.
• Organizational resistance was a huge factor in implementing cost reduction projects
Copyright © 2011 CFO Publishing LLC
Background
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• The whitepaper is based on survey responses from 325 senior finance executives in the United States.
• conducted in March 2011.
Copyright © 2011 CFO Publishing LLC
The Path to ProsperityCFOs at small and midsize companies On post-downturn cost control cost control
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Growing confidence in business prospects
Low-risk growth strategies dominate
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Small and midsize companies are experiencing at least some degree of recovery in their business Performance
Copyright © 2011 CFO Publishing LLC Note: Percentages may not total 100%, due to roundingCopyright © 2011 CFO Publishing LLC
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Looking Forward: Finance executives are at least “somewhat confident” in their ability to meet performance targets—but relatively few say they are “very confident.”
Copyright © 2011 CFO Publishing LLC
Percentage of respondents
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Focus on sustained, profitable growth
Continuous improvement approach to cost management
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Low risk growth strategies dominateCompanies see increasing market penetration—a relatively low-risk strategy—as their most promising opportunity to grow over the course of the year.
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Percentage of respondents
8Copyright © 2011 CFO Publishing LLC
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Focus on Profitable Sustained GrowthSurvey results show that small and midsize companies are turning their attention from managing the bottom line to pursuing sustained, profitable growth.
Copyright © 2011 CFO Publishing LLC
Percentage of respondents Note: Percentages may not total 100%, due to rounding.
9
Copyright © 2011 CFO Publishing LLC
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Continued cost discipline will be a source of competitive advantage as the recovery unfolds, say finance executives.To what extent do you agree or disagree with the following statement?
Copyright © 2011 CFO Publishing LLC
Percentage of respondents
10Copyright © 2011 CFO Publishing LLC
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 11
Finance executives say their companies got better at managing their costs over the course of the downturn.Continuous improvement approach to cost management.
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 12
Despite recent improvements, a substantial number of finance executives see room to improve performance on a wide range of cost-management activities—in particular, vendor consolidation, administrative process improvement, and employee adaptability.
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A more influential finance function
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 14
Improving the finance function’s ability to identify growth opportunities, potential efficiencies, and profitability improvements in a complex and uncertain environment would contribute most to their companies’ overall success, say finance executives.
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 15
Aside from the perennial lack of time, attention, and resources, organizational resistance from outside of finance is themost-often cited barrier to finance’s ability to contribute to growth.
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 16
Organizational fatigue will likely be a serious barrier to maintaining cost discipline over the next two years, respondents say.
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 17
Finance has gained organizational influence in the wake of the recent downturn.
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More expansive plans for cost savings
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 19
More expansive plans for cost savingsSmall and midsize companies are just as likely to use savings gained through cost-control efforts to boost business orproduct lines in the coming year as they are to strengthen their balance sheets.
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Copyright © 2011 CFO Publishing LLC Percentage of respondents
Note: Percentages may not total 100%, due to rounding. 20
Cost-management discipline through the downturn has yielded more resource-conscious, less wasteful companies.
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ConclusionWith an increased level of influence in the aftermath of the downturn, and a commitment to a balanced approach for company growth, finance executives are in an excellent position to guide their companies to balanced growth.