VideoWhere the CFO Would Like to Be
Many CFOs wish they were someplace else — namely, the corner office, if not as the full-time inhabitant then at least as a frequent visitor. That is, they'd like to spend more time advising the CEO on long-term strategy and less time analyzing costs, metrics, and the like.
So says a survey by CFO Research Services and Geac Corp., which polled 140 senior finance execs across all industries on the topic of how they and their finance teams contribute to business strategy. While only 40 percent say they do, in fact, play that senior advisory role, nearly two-thirds hope to do so within two years. To free up that time, they'd like to spend less effort on costs, expenses, profitability measures, and the analysis that goes along with them.
But what sort of planning and advising would they like to do? Asked about their ability to create a plan to pursue promising opportunities, more than 40 percent rate their capabilities as "high" in the area of cost control, while approximately 34 percent give themselves that grade for organic growth and only 26 percent claim that status in the area of alliances/mergers and acquisitions.
Maybe it's a matter of practice: fewer than 10 percent say they spend too much time on strategic planning, while more than half say they don't spend enough.
Words Fail Them
Even though computer security remains a rare growth area within IT budgets, the purse strings are tightening. And, according to Yankee Group, security budgets are becoming more influenced by lines of business, rather than being solely determined by IT departments. Consulting firm Meta Group goes a step further, arguing that today's hodgepodge of security expenditures (antivirus software here, firewall protection there, data-privacy efforts somewhere else) will ultimately be consolidated into strategic programs with dedicated budgets. But for that to happen, security professionals need to articulate the business case for higher security spending better than they have to date. Quantifying the benefits of a disaster that never happens is a tall order, so putting a dollar value on security spending may be impossible. But Meta Group analyst Tom Scholtz proposes a "4i" model as a way to frame security-budget discussions.
In his view, the i's that have it (the power of persuasion, that is) are investment, integrity, insurance, and indemnity. Investment would stress everything from brand enhancement (or, more to the point, tarnishing) and competitive differentiation to agility and adaptability. Integrity would stress continuous availability and accurate information. Insurance would frame security spending in risk-management terms, while indemnity would stress new regulatory requirements and governance practices. The aim is not to wrest as large a budget as possible from an executive audience, but to frame the issue in terms that business leaders are comfortable with. Scholtz also recommends that companies look at the cost of past virus attacks, fraud, hacker attacks, and other security lapses as one way to put some hard numbers on a line item that defies easy analysis.
No News Is Good
If, as Mercer Human Resource Consulting maintains, a company's intranet is a mirror of the organization, you may not like what you see. Intranets were supposed to be inexpensive, efficient ways to get all employees on the same home page, kept abreast of company information, given access to corporate policies and benefits forms, and generally supplant any need to stroll down to HR or hang out at the water cooler. But Mercer and others say intranets have become mired in mismanagement, having become dumping grounds for outdated or irrelevant information and biased toward some departments while ignoring others.
Mercer proposes a multistep improvement program, including creating a strategy based on users' needs, revamping the architecture and content-creation mechanisms to meet those needs, obtaining good usage data, jazzing up the visual appeal, providing access from anywhere, and integrating the intranet with other company communication channels. Nielsen Norman Group, a usability consultancy, says good intranets now downplay access to news (particularly outside news — can your intranet really compete with a daily newspaper?) in favor of providing access to tools that help employees do their jobs better.
Better Numbers, Eventually
Just one year ago, according to research by The Hackett Group, only 9 percent of companies said they had confidence in their financial forecasts and reporting outputs. Now, thanks to the demands of the Sarbanes-Oxley Act of 2002, that figure is up to 67 percent.
Good news, but it comes at a price: for the first time in years, companies have been largely unable to reduce overall finance costs. Meanwhile, monthly closing cycles have actually grown longer. From 1992 to 2002, Hackett found, the typical company in its survey base was able to cut the percent of revenue consumed by the finance department by 58 percent, to 1.08 percent of revenue. But that figure has remained essentially unchanged for the past two years.
Hackett labels as "world-class" those companies that score in the top 25 percent in both efficiency and effectiveness output metrics in a given functional area. World-class companies differ from their peers in many respects, including the use of IT, with world-class companies far more likely to rely on a central data repository to generate performance reports, and to use integrated budgeting/planning software and online tools that provide employees with a self-service system for ad hoc queries and financial reports. They also spend more on IT (30 percent more, on average) and tend to consolidate on a single ERP system.
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