Operations Insights

Please see below selected intelligence from 2016 and earlier about operations. This is a synthesis of major recent developments at competitors, business schools, thinktanks, media, commentators, and other key influencers.

 

 

 

May 2016

 

 

• The CFO role is being disrupted by digital; data; risk and uncertainty; regulation and stakeholder scrutiny. CFOs who don’t proactively define their role in response to these major forces could compromise their ability to shape strategy with the CEO and drive the innovation necessary for sustainable growth. In EY’s first 'The DNA of the CFO' study, conducted in 2010, EY painted a picture of a role that had already broadened to encompass not only traditional financial skills, but also more strategic and market-facing responsibilities. Six years later, in the latest CFO research study, EY found that change has accelerated more rapidly than many would have thought possible.

 

 

• After years of focusing on cost reduction, CFOs are bullish on growth, claimed Accenture. Yet growth strategies are being pursued at unprecedented scale and speed for today’s generation of CFOs. Can they move into the uncharted territory of rapid value creation? With investors watching and disruptors looming, they must. Accenture believes that the reality is that every CFO must be ready to make rapid-fire decisions and execute at scale. The potential for game-changing opportunities and terrible failures is real- and the line between them is razor thin.

 

 

 

March 2016

 

 

• Accenture Strategy research revealed that just 6% of CFOs say cost management will be their top strategic priority in 2016. Yet a flexible cost structure is essential for profitable and sustainable growth. CFOs must do more now to drive a broad cost management mandate. Strategic cost management offers a radical approach to disrupting enterprise costs from the inside. This is not status-quo cost reduction focused on doing the same things for less. It makes deliberate and durable changes to the business or operating model to sustain 20 to 50% in cost reductions to reinvest for growth.

 

 

 

February 2016

 

 

• To drive profitable and sustainable growth, companies must identify activities that drive value, take out costs that aren’t contributing to business goals and reinvest those savings into growth initiatives that improve competitiveness. Accenture Strategy research found that 82% of companies are focused on cost reduction to free up funds to invest in growth initiatives, yet only 36% strongly agree they are able to sustain benefits of cost reduction programmes. So what are the challenges that companies face? There are several, but most important is the fact that businesses aren’t grasping the critical link between cost reduction efforts and growth strategy.

 

 

 

January 2016

 

 

• Surveyed chief financial officers (CFOs) revealed their thinking and actions for 2016, and most are focused on growing in current markets and maximising company efficiency, according to Deloitte's fourth quarter (Q4) "CFO Signals™" survey, which tracks the thinking and actions of more than 100 CFOs from large North American companies. More than 90% of responding CFOs say a top three priority is increasing revenue in current markets, and almost 75% say a top priority is to reduce costs. Additionally, 63% of CFOs expect to seek M&A deals in 2016, largely focused in existing markets, for multiple reasons including scale efficiencies and acquiring customers in both current and new markets.

 

 

 

December 2015

 

 

• The chief financial officer (CFO) role is changing, claimed a new PwC report. It's becoming more strategically-focused, more value-focused and more future-focused. But the role of the power utilities sector CFO is changing faster than most. The ambit of the power sector CFO is not only being reshaped by the overall transformation that is taking place in the CFO role but also by energy transformation, which is shifting the technological, market and customer context for companies in the sector.

 

 

• Since the global financial crisis, global treasury and cash management have entered a period of adjustment. Corporate treasurers are grappling with an increasingly uncertain macro environment and with time-consuming regulatory and compliance burdens. These factors cause major challenges for many companies that are keen to expand in the face of a sluggish economic recovery. At the same time, new technological capabilities and partnerships as well as the corporate treasurer's increasingly strategic role within the business offer major opportunities. A new programme by The Economist Intelligence Unit, sponsored by Deutsche Bank, examines how global corporate treasurers are navigating these new risks and opportunities for growth, based on a global survey of 300 corporate treasurers, CFOs and other senior finance executives.

 

 

 

November 2015

 

 

• PwC's 2015 Global Operations Survey was based on a survey of 1,262 operations decision-makers around the world. The report argued that changes in customer behaviour are set to disrupt businesses in all industries over the next five years. Yet, most company operations are not designed to deliver what customers value – now or three years from now. The report finds that while 61% of operations executives expect changes in customer behaviour to become a disruptive factor in the coming years, only 25% are extremely confident that their operations are designed to provide customer value and a distinctive experience. And 63% say that understanding what customers value is a challenge for their own company operations.

 

 

 

September 2015

 

 

• The International Integrated Reporting Council (IIRC) launched its new IR framework in December 2013, with little practical guidance on how to embed it. This has resulted in our clients increasingly asking us how they can kick-start change within their organisations to increase the transparency and quality of their reporting. PwC therefore drew on our global expertise to develop Implementing integrated reporting: PwC's practical guide to a new business language, which offers practical advice on the fundamentals and steps to be considered when implementing integrated reporting. In addition, it offers the benefits to doing so as well as examples from businesses who are reporting more holistically.

 

 

 

July 2015

 

 

• Finance teams are spending more time on analysis and less time on data gathering amid greater automation of traditional book-keeping activities. PwC's own annual finance function benchmark report found that the best performing finance functions cost 40% less than their peers and have ditched the traditional focus on book-keeping and information gathering in favour of greater automation, shared services and more efficient use of capacity.Finance professionals now spend half their time on analysis versus data gathering, up from 36% three years ago, with a greater emphasis on real-time analytics and management information used by other parts of the business.

 

 

 

January 2015

 

 

• Chief financial officers recorded an eighth straight quarter of optimism regarding their organisation’s prospects, continuing to forecast growth in earnings, sales and hiring for the year ahead, according to Deloitte’s fourth quarter (Q4) CFO Signals™ survey. However, CFOs remain cautious of external risks that are causing uncertainty for the year ahead. These include industry regulation, government policy, equity market valuations and the performance of the European and Chinese economies.