CFO Whitepaper The Path To Prosperity

The Path to Prosperity
CFOs at small and midsize companies
On post-downturn cost control
Subtitle details here

Copyright © 2011 CFO Publishing LLC

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 projects


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.


Growing confidence in
business prospects

Low-risk growth strategies
dominate

Small and midsize companies are experiencing at least
some degree of recovery in their business Performance

Note: Percentages may not total 100%, due to rounding
Copyright © 2011 CFO Publishing LLC LLC
Copyright © 2011 CFO Publishing

Looking Forward:
Finance executives are at least “somewhat confident” in their ability to
meet performance targets—but relatively few say they are “very
confident.”

Percentage of respondents


Focus on sustained, profitable growth

Continuous improvement approach to cost management

Low risk growth strategies dominate
Companies see increasing market penetration—a relatively low-risk strategy—as
their most promising opportunity to grow over the course of the year.


Copyright © 2011 CFO Publishing 8

Focus on Profitable Sustained Growth
Survey results show that small and midsize companies are turning their attention
from managing the bottom line to pursuing sustained, profitable growth.

9

Note: Percentages may not total 100%, due to rounding.


Continued cost discipline will be a source of competitive advantage as
the recovery unfolds, say finance executives.
To what extent do you agree or disagree with the following statement?


Copyright © 2011 CFO Publishing 10

Finance executives say their companies got better at managing their costs
over the course of the downturn.
Continuous improvement approach to cost management.

Copyright © 2011 CFO Publishing LLC 11

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.


A more influential
finance function

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.


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.


Organizational fatigue will
likely be a serious barrier
to maintaining cost
discipline over the next two
years, respondents say.


Finance has gained organizational influence in the wake of
the recent downturn.


More expansive plans for
cost savings

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.


Cost-management discipline through the downturn has yielded more resource-
conscious, less wasteful companies.


Conclusion
With an increased level of influence in the
aftermath of the downturn, and a commitment
to a balanced approach for company growth,
finance executives are in an excellent position
to guide their companies to balanced growth.

CFO Whitepaper The Path To Prosperity

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