CFO Whitepaper The Path To Prosperity

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This study examines senior fi nance …

This study examines senior fi nance
executives’ cost-management
achievements in the course of the
downturn and explores the role that
continued cost discipline will play in
midsize companies’ growth efforts in
the months and years to come.

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  • 1. The Path to Prosperity CFOs at small and midsize companies On post-downturn cost control Subtitle details hereCopyright © 2011 CFO Publishing LLC
  • 2. Background 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 projectsCopyright © 2011 CFO Publishing LLC
  • 3. The Path to Prosperity CFOs at small and midsize companies On post-downturn cost control cost control • 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
  • 4. Growing confidence inbusiness prospectsLow-risk growth strategiesdominate
  • 5. Small and midsize companies are experiencing at least some degree of recovery in their business Performance Note: Percentages may not total 100%, due to roundingCopyright © 2011 CFO Publishing LLC LLC Copyright © 2011 CFO Publishing
  • 6. Looking Forward:Finance executives are at least “somewhat confident” in their ability tomeet performance targets—but relatively few say they are “veryconfident.” Percentage of respondentsCopyright © 2011 CFO Publishing LLC LLC Copyright © 2011 CFO Publishing
  • 7. Focus on sustained, profitable growthContinuous improvement approach to cost management
  • 8. Low risk growth strategies dominateCompanies see increasing market penetration—a relatively low-risk strategy—astheir most promising opportunity to grow over the course of the year. Percentage of respondentsCopyright © 2011 CFO Publishing LLC LLC Copyright © 2011 CFO Publishing 8
  • 9. Focus on Profitable Sustained GrowthSurvey results show that small and midsize companies are turning their attentionfrom managing the bottom line to pursuing sustained, profitable growth. 9 Percentage of respondents Note: Percentages may not total 100%, due to rounding. Copyright © 2011 CFO Publishing LLC LLC Copyright © 2011 CFO Publishing
  • 10. Continued cost discipline will be a source of competitive advantage asthe recovery unfolds, say finance executives.To what extent do you agree or disagree with the following statement? Percentage of respondentsCopyright © 2011 CFO Publishing LLC LLC Copyright © 2011 CFO Publishing 10
  • 11. Finance executives say their companies got better at managing their costsover the course of the downturn.Continuous improvement approach to cost management. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 11 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. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 12 Note: Percentages may not total 100%, due to rounding.
  • 13. A more influentialfinance function
  • 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. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 14 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 the most-often cited barrier to finance’s ability to contribute to growth. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 15 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. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 16 Note: Percentages may not total 100%, due to rounding.
  • 17. Finance has gained organizational influence in the wake ofthe recent downturn. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 17 Note: Percentages may not total 100%, due to rounding.
  • 18. More expansive plans forcost savings
  • 19. More expansive plans for cost savings Small and midsize companies are just as likely to use savings gained through cost-control efforts to boost business or product lines in the coming year as they are to strengthen their balance sheets. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 19 Note: Percentages may not total 100%, due to rounding.
  • 20. Cost-management discipline through the downturn has yielded more resource-conscious, less wasteful companies. Percentage of respondentsCopyright © 2011 CFO Publishing LLC 20 Note: Percentages may not total 100%, due to rounding.
  • 21. ConclusionWith an increased level of influence in theaftermath of the downturn, and a commitmentto a balanced approach for company growth,finance executives are in an excellent positionto guide their companies to balanced growth.