CFO Whitepaper The Path To Prosperity

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The Path to ProsperityCFOs at small and midsize companiesOn post-downturn cost control

Copyright © 2011 CFO Publishing LLC

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


Background

• The whitepaper is based on survey responses from 325 senior finance executives in the United States.

• conducted in March 2011.


The Path to ProsperityCFOs at small and midsize companies On post-downturn cost control cost control

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

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

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



8Copyright © 2011 CFO Publishing LLC

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


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

9


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?



10Copyright © 2011 CFO Publishing LLC

Copyright © 2011 CFO Publishing LLC Percentage of respondents

Note: Percentages may not total 100%, due to rounding. 11

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



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 themost-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 savingsSmall and midsize companies are just as likely to use savings gained through cost-control efforts to boost business orproduct 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.

ConclusionWith 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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