The combination of a worldwide credit crunch and a recession creates a unique and unprecedented set of circumstances. CFOs will have to navigate two distinct challenges. First, they must manage their short-term credit, cash and performance needs – despite receding pricing-power. Second, they need to effectively position and utilize assets with an eye toward post-recession growth. In recent years, such downturns have typically lasted 10 months or less, but most economists and CFOs do not expect the current recession in the U.S. and the major European countries to turn until the end of 2009.
These unprecedented times require CFOs to be efficient operators of their finance business, stewards who manage to preserve value, catalysts for changes that drive new efficiencies and strategists in a new, post-recession environment. Finally they need to be prepared for major shifts and risks in the global economy.
Finance organizations are addressing these challenges with varying degrees of success. Some still struggle to get the books right. Others play a leading role in business strategy and execution. But the vast majority fall somewhere in between. Their core finance operations are reliable and they are actively improving their efficiency while at the same time aspiring to play a more strategic role in the business.
Expectations towards finance increase in many organizations, and CFO’s need to adapt their finance function to be able to address new needs. Therefore it is from utmost importance that the CFO has a thorough understanding of the performance and the capabilities of his organization. Deloitte’s Finance Function Scan can help the CFO to get a clear view on its organisation and to address the challenges to shape a new future state of finance. The scan helps you to identify the weak and strong spots in their finance organization and to prioritize required change efforts. Apart from a better view on cost and process efficiency, the scan also enables the CFO to assess its capabilities with respect to risk management and regulatory compliance.
Based on the qualitative and quantitative results of the scan and in combination with leading best practices and benchmarks, a selection of improvement initiatives for the short, mid and long term can be initiated to further develop the finance function: