May 2006

Todd Herman

Charitable Contribution – Why you should invest a few minutes of your time!

IBM's "2005 Global CFO Study" – Interesting Findings:

  1. Top areas of importance: performance, growth, and risk.
  2. Effective companies integrate information companywide.
  3. Consolidating basic process and technology techniques.
  4. Lagging in effective technology usage to support performance and risk.
  5. Growth activities focus on process.

We see similar trends among our clients – How does this play out in your company? – Take the survey and help us donate $500 to charity!

  • Looking back, looking ahead...
    ...and moving from "force" to "finesse"

Let me tell you upfront why you should invest a few minutes of your time – you will ensure that $10 goes to one of three charities of your choice. Simply read this e-update, and then participate in a brief survey – if you are one of the first 50 persons to complete the survey, you will ensure that $10 goes to one of three charities of your choice!

In 2005, IBM conducted "The 2005 Global CFO Study," which included a survey of nearly 900 CFO's and senior Finance executives around the world. Most of the companies surveyed were very large – yet, despite size and other differences, I sense that the study's results hold true for companies in this area. Let me summarize some findings that I found interesting.

2005 Global CFO Study > Quick Read Full Text

Interesting Finding #1 – The study found that Finance's top areas of importance were performance, growth, and risk.

Interesting Finding #2 – The survey questions were asked in two ways – how important an area is to the business, and how effectively the business addressed the area. The results indicated that the most effective companies in the top survey areas were highly effective in integrating information companywide.

Interesting Finding #3 – Some specific steps taken by Finance to integrate information include consolidating and integrating actual, budget, and forecast results; and driving ownership and mapping of processes.

Interesting Finding #4 – In the areas of both performance management and risk, companies are making good progress in process improvements, but lag in effective technology usage to support these areas.

Interesting Finding #5 – All the Finance departments that were highly effective in partnering for growth did so by process-related activities, such as supporting planning of growth activities, and implementing sound costing and profitability methods.

From its findings, IBM recommended a two-step "roadmap" for Finance organizations seeking to better provide information and insight to the business:

First, focus on the two key enablers:

  • Simplify, standardize, and optimize process and technology to enable a well-defined foundation.
  • Enable fact-based decisions by integrating information.

Second, work on the three key enhancers of business performance:

  • Move beyond compliance to enhance risk insight.
  • Optimize decision support to enhance performance insight.
  • Partner for growth to enhance growth insight.

Based on our nearly 17 years of business in the Triad area, we see similar trends among our clients. Many of our projects first focus on the two key enablers in the improvement roadmap, and then move on to one or more of the key enhancers, as shown by this client:

  • A Well-Defined Foundation – We were initially retained by the CFO of this client to help streamline and reduce the accounting closing cycle. We did this by process and technology improvements, reducing the cycle time and work effort, and improving accuracy by reducing manual intervention.
  • Integrating Information – The time savings from the streamlined closing was then reinvested in our integrating their inventory information. Reviewing the consolidated information, we recommended an inventory management policy that quickly reduced inventory levels.
  • Enhancing Performance Insight – With these two key enablers in place, we are beginning to help our client improve their inventory performance by providing consistent, reliable, and repeatable inventory metrics and trend analyses that allow management to make business decisions with greater confidence.

Help us give $500 to charity!

I've summarized IBM's findings and described how I've seen these in our client work – but what I would really like to know is how these actually play out among companies in the area. To participate in a streamlined version of the IBM survey – and potentially direct $10 to one of three charities – click here »;

How have I seen trends in the Finance organization play out in recent years, and how do I think things might look in the near future?

  • Prior to Sarbanes-Oxley, Finance organizations had made a pronounced shift from a transaction focus to decision support activities, driven by improved automation in transaction recording and reporting.
  • The initial large wave of work for Sarbanes-Oxley reviews and remediation, whether required for public companies or trickle-down for private companies, seems to have passed.
  • Finance organizations can now return to reducing their transaction processing efforts and increasing decision support activities, by focusing on process and technology.

In summary, those organizations that do first things first – focus on the key enablers, and then move on to key enhancers – are the ones moving from using "force" to deliver risk, performance, and growth insights, to relying on "finesse" for achieving improved results.

Our project snapshots to the right provide a good overview of the many ways in which we work with clients on their key enablers and key enhancers, and help them move from "force" to "finesse" Please contact me to get moving on improving your business.


Todd L. Herman

Click Here for The Agile CFO Survey »

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PPS – How am I doing with my goals for personal accountability in 2006? Please visit Todd's Results. For background on this, please see:

Client Project Update:

I am pleased to provide you with an update on our client projects. Projects we have completed over this period are...

Web-Based Invoice Delivery

Used SQL Server Reporting Services and ASP.NET to develop a web-based application to deliver requested point-of-sale invoices in an Acrobat format, allowing remote medical offices to easily generate invoices for their walk-in patients.

X.509 Security Implementation

Completed the implementation and rollout of X.509 certificate security for secure Internet e-mail between key users of two companies, allowing our client and one of its major customers to securely share confidential and proprietary technical information and business plans.

Systems Development

Applied advanced troubleshooting and design techniques to work around several issues in SQL Server Reporting Services, permitting custom report development to continue as planned during a critical period of a company's ERP system implementation.

Systems Development

Continued integrating an industry-specific business system and a financial accounting system for this insurance company, providing accounting integrity and enhanced management analysis.

Integrating Law Firm Systems

Worked with a multi-office law firm to better integrate their time and billing information in several Lotus Notes applications, improving the efficiency of many common tasks.

Inventory Reductions from Integrated Information

Automated an inventory analysis process from two separate business reporting systems and recommended changes to purchasing and replenishment procedures, enabling this medical services company to reduce inventory holdings by more than 25%, while maintaining the same high level of product availability.

Value Statement Requirements Definition

Prepared the detailed workflow, functional, and technical specifications for a rewrite of a manufacturing company's value statement system, allowing the client to accurately report the value added offshore to US Customs.

Future projects we are planning include...

Data Configuration & Reporting Techniques

Perform an information needs and analysis project, and then define required database structures to support an updated and optimized data warehouse, ensuring that appropriate database architecture concepts are applied to take advantage of new features available in this SQL Server 2005 upgrade.

IBM Lotus Notes/Domino Technical Services

Provide advanced administration and application development for the IBM Lotus Notes/Domino mail and collaborative applications of this multi-location company, allowing client personnel to focus on day-to-day operations.

IBM Lotus Sametime Web Conferencing

Work with client personnel to install and implement IBM Lotus Sametime Web Conferencing, providing tighter security, better functionality, and lower costs as compared to public web conferencing services.

Streamlining & Automating Sales Commissions

Review the process for calculating sales commissions for this industrial services company, identifying ways to simplify the data collection and computation processes, and then recommending ways to automate a simplified process.

Internal & Financial Controls for Supply Chain Projects

Provide our finance, operational, and internal control experience to help a company integrate internal control and financial governance techniques within a large number of critical and complex supply chain projects, helping ensure that risks are anticipated and controlled, and project benefits realized.

Budgeting with FRx Forecaster

Deploy FRx Forecaster software and use it to develop budgets, forecasts, and reports for balance sheet and cash flow statements of this medical services firm, more effectively integrating information than the current spreadsheet-based approach, and allowing their staff to collaboratively enter data to develop budgets and forecasts.