Executive summary The CFOs are facing tougher business conditions ahead including increased pressure on prices and commercial terms from customers and suppliers. This is one of the main conclusions from Valcon’s CFO Survey 2010. These facts seem to have increased the CFOs’ focus on management information which from Valcon’s view is a very positive development – especially because Valcon also sees a toughened business climate after the financial crisis. Managing a profitable business within these conditions will require agile reactions towards market, customers and suppliers based on operational and fact based analyses. Nevertheless the CFOs are mainly focusing on profitability and other financial measures and have downgraded focus on more operational measures like lead time, cash flow, inventory levels, etc. which are important in managing the business proactively through the toughened business environment. Valcon recommends a more balanced focus on these management information parameters. In extension of this, the survey indicates that the CFOs are focusing on close partnerships with suppliers and customers and implementation of new sales channels when asked for which measures they see as a central part of their strategy in securing a company that profitably can be scaled up and down following fluctuating market conditions. However, less central are more controllable measures like outsourcing and leasing. Compared to the CFOs’ indication of tough market conditions ahead it seems odd that very few Scandinavian companies focus on these kinds of scalability measures which enable more flexible cost structures and increase profitability due to a lowering of the break-even point of the company. Results from the survey indicate that the more scalability measures that are applied a more significant lowering of break-even point can be achieved. Exactly this could help manage the company through the tough market conditions profitably! In the same way it seems very contradictory that the CFOs are reporting profitability as a main focus element in management information when profitability management only accounts for 8% of the total resources in the finance function. In addition the transactional processes account for about 60% of the resources, which means that no decrease in the use of transactional resources can be reported compared to the CFO surveys in 2005, 2008 and 2009. When the CFO survey at the same time reports that the total costs of the finance function all in all are increasing, it seems unexplained why so few Scandinavian CFO SuRvEy 2010 • Is a cooperation between Copenhagen Business School and valcon • Has been conducted by anonymised questionnaire survey among more than 1,000 medium-sized and large Scandinavian enterprises (financial excepted) • The enterprises in CFO Survey 2010 represent a revenue of DKK 130 billion and cover a wide selection of industries • Conclusions and future implications are compiled by comparisons with relevant data from valcon’s benchmark database • CBS and valcon have previously conducted CFO surveys in 2005, 2008 and 2009. CFO Survey 2010 follows up on the development in the financial function 3
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