REENGINEERINGTHE ROLES AND TASKS OF THE FINANCE OFFICER.ppt

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1、RE-ENGINEERING THE ROLES AND TASKS OF THE FINANCE OFFICERCase Study,Concepts and Debatable IdeasKenny OngCNI Holdings Berhad,Intro:CNI,20 years oldCore Business:MLMOthers:Contract Manufacturing,F&B Retail,Export/Trading,eCommerce,Shared ServicesMalaysia,Singapore,Brunei,Indonesia,India,China,Hong Ko

2、ng,Philippines,Italy,Taiwan,Oman,United States,VietnamStaff force:500Distributors:200,000Products:Consumer Goods and Services,Re-engineering the major roles of the Finance Officer,Its all about expectations,Finance Role?,Finance Officer,SBUs,Divs,Depts,Corporate HQ,Strategy,Results,Request,Service,P

3、olicies,Service,Finance Function Objectives?,Transactional,Cost reduction,Efficiency,Agility,Fast Copy,AP,General Ledger,B/S analysis,Accounting,Fixed Assets,AR,Facilities,Finance Role vs.Measurement,Transactional,Cost reduction,Efficiency,Agility,Fast Copy,Value-added,Best Practices,Consistency,Ana

4、lysis,Value,Process improvement,service innovation,secondary KPIs,internal customers,Transformation,Direct Business Impact,primary KPIs,external customers,TimeCostQuantityQuality,Finance Role vs.Measurement,Transactional,Cost reduction,Efficiency,Agility,Fast Copy,Value-added,Best Practices,Consiste

5、ncy,Analysis,Value creation,customization,Process improvement,service innovation,secondary KPIs,internal customers,Transformation,Direct Business Impact,primary KPIs,external customers,TimeCostQuantityQuality,InnovationService,Finance Role vs.Measurement,Transactional,Cost reduction,Efficiency,Agili

6、ty,Fast Copy,Value-added,Best Practices,Consistency,Analysis,Value,Process improvement,service innovation,secondary KPIs,internal customers,Transformation,Direct Business Impact,primary KPIs,external customers,TimeCostQuantityQuality,InnovationServiceKPI,Finance Role vs.Measurement,Transactional,Cos

7、t reduction,Efficiency,Agility,Fast Copy,Value-added,Best Practices,Consistency,Analysis,Value,Process improvement,service innovation,secondary KPIs,internal customers,Transformation,Direct Business Impact,primary KPIs,external customers,TimeCostQuantityQuality,InnovationServiceKPIImpact,Career Guid

8、e for Finance Officers,Go Wide,Dig Deep,Finances Role and Business Intent,The digital watch didnt come from established watch companies,the calculator didnt come from slide rule or adding machine companies,video games didnt come from board-game manufacturers Parker Bros or Mattel,the ballpoint pen d

9、idnt come from fountain pen manufacturers,and Google didnt come from the Yellow Pages Bob Seidensticker,Futurehype,Whats wrong with Business Strategy Today?,Long-term PlansObjectivesStrategiesEnablersResources,Also known as L.O.S.E.R.,Whats wrong with Business Strategy Today?,Biggest Threats often c

10、ome from OUTSIDE your normal industryPlanning from the base of an Existing organization vs.zero-basedUsing Sunk Costs for decision making and planningTraditional Analysis(e.g.SWOT)based only on known or existing assumptions or knowledgeSpending too much time in market research and analysisDefining t

11、he company from a Product/Service perspective vs.Category vs.JTBD(e.g.Coca-cola)Wrong Benchmark already successful vs.what made them successfulImplementing BSC and PMS to improve Business Model and Strategy,Finance Role and the Business Model,How to fail without trying,Funds:What do Investors look f

12、or?,www.myCNI.com.my,www.OOBEY.com,What is the Business Model?,USP,Market Discipline,Profit Model,GoogleAir AsiaTata Nano,What is the Business Model?,USP,Market Discipline,Profit Model,Business Model:Profit Model,Revenue,Financial,Learning&Growth,Internal Process,Customers,Cost,Margin,Strategy+BSC,C

13、ash Flow,Asset,What is the Business Model?,USP,Market Discipline,Profit Model,Intro:Market Discipline,They are the most innovativeConstantly renewing and creativeAlways on the leading edge,A great deal!Excellent/attractive priceMinimal acquisition cost and hassleLowest overall cost of ownershipA no-

14、hassles firmConvenience and speedReliable product and service,Exactly what I needCustomized productsPersonalized communicationsTheyre very responsivePreferential service and flexibilityRecommends what I needIm very loyal to themHelps us to be a success,Product Leadership,OperationalExcellence,Custom

15、erIntimacy,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline

16、 of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product)

17、,Customer Intimacy(best total solution),Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational ExcellenceCompetitive priceError free,reliableFast(on demand)SimpleResponsiveConsistent information for allTransactionalOnce and Done,Customer IntimacyManagement by FactEasy to do business w

18、ithHave it your way(customization)Market segments of oneProactive,flexibleRelationship and consultative sellingCross selling,Product LeadershipNew,state of the art products or servicesRisk takersMeet volatile customer needsFast concept-to-counterNever satisfied-obsolete own and competitors productsL

19、earning organization,Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,The McPlaybook*,Make it easy to eat50%drive-thruMeals held in one hand,Make it easy to prepareHigh TurnoverTasks simple to learn&repeat,Make it quick“Fast Food”Tests new products for Cooking Times,Make what customers want

20、Prowls market for new productsMonitored field tests,*Adapted from:Businessweek,Februrary 5th 2007,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),

21、Strategy:Disciplines,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Disciplines,HP well-balanced portfolio,mass customization,Acer super lean cost structure,aggressive

22、 pricing,Apple powerful products,premium pricing,limited range,Still Doing well in 2009,What is the Business Model?,USP,Market Discipline,Profit Model,GoogleAir AsiaTata Nano,Finance Role and Strategic Planning,Hope is not a strategy,What is Strategic Planning?,Strategic Planning,Variables:ResearchG

23、rowthRisksStakeholdersConstraintsSWOTMisc.,Output:PlansPrioritiesKPIs,What is your Goal?,Cost ReductionGrowthBoth?,Growth Strategy,“Double-Digit Growth”,Michael Treacy,www.myCNI.com.my,www.OOBEY.com,Increase switching costCustomize productsPreempt DefectionsBrand,Neutralize Competitor advantagesSupe

24、rior ValueBuy market share,Spot growth opportunitiesOrganized search,Promising Market?Make or Buy?,Side Notes on Cost Reduction Strategy,Cost Reduction,5%-30%,30%-80%,Strategy vs.Focus,Upturn,Flat,Downturn,Fight ComplacencySharpen EdgeKeep MomentumConquer,NPD Cycle TimeImprove EdgeExtensionsCounter

25、Competitor,InnovationAcquireProfitsBuild momentum,SalesCash Flow,Innovation/R&DFocus BreakthroughsJV,In-source,Out-sourceEliminate bottom 20%,Improve Top 15%revenue-generating products R&D,Sales,www.myCNI.com.my,www.OOBEY.com,Revenue,Base Retention,Share Gain,Positioning,Adjacent Market,New Business

26、,Financial,Learning&Growth,Internal Process,Customers,Cost,Margin,Strategy+BSC,Cash Flow,Asset,Satisfaction,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Disciplines,

27、Priorities,and KPIs,Operational ExcellenceCompetitive priceError free,reliableFast(on demand)SimpleResponsiveConsistent information for allTransactionalOnce and Done,Customer IntimacyManagement by FactEasy to do business withHave it your way(customization)Market segments of oneProactive,flexibleRela

28、tionship and consultative sellingCross selling,Product LeadershipNew,state of the art products or servicesRisk takersMeet volatile customer needsFast concept-to-counterNever satisfied-obsolete own and competitors productsLearning organization,Strategy:Disciplines,Priorities,and KPIs,Operational Exce

29、llenceMove know-how from top performing units to othersBenchmark against best in classEnsure operations training for all employeesUse disciplines like TQM for continuous learning to reduce costs and improve quality,Strategy:Value Disciplines,Strategy:Value Disciplines,Customer IntimacyCapture knowle

30、dge about customersUnderstand customer needsEmpower front line employeesEnsure that everyone knows the customerMake company knowledge available to customers,Product LeadershipReduce time to marketCommercialize new products fastEnsure that ideas flowReuse what other parts of the company have already

31、learnedEnsure there are multiple sources of funding,Strategy:Value Disciplines,Revenue,Base Retention,Share Gain,Positioning,Adjacent Market,New Business,Financial,Learning&Growth,Internal Process,Customers,Cost,Margin,Strategy+BSC,Cash Flow,Asset,Operational Excellence,Product Leadership,Customer I

32、ntimacy,Investment Strategy,Satisfaction,Before we start,Which comes first?Strategies-KPI?KPI-Strategies?,Before we start,Which comes first?Strategies-KPI?KPI-Strategies?,already know our priorities,aware of all strategy options availablecreating something UNIQUE,INNOVATIVE and DISRUPTIVE e.g.Air As

33、iaconducting a business Turnaround e.g.MAS,Before we start,Which comes first?Strategies-KPI?KPI-Strategies?,want to find out possible strategies,determine our priorities first thru selection of important KPIs;growing through normal business,not a Turnaround.,Example:Selection of KPIs for BSC,Custome

34、r satisfactionCustomer loyaltyMarket shareCustomer complaintsComplaints resolved on first contactReturn ratesResponse time per customer requestPrice relative to competitionTotal cost to customerAverage duration of customer relationshipCustomers lostCustomer retentionCustomer acquisition ratesPercent

35、age of revenue form new customersNumber of customersAnnual sales per turnover,Win rate(sales closed/sales contact)Customer visits to the companyHours spent with customersMarketing cost as a percentage of salesNumber of ads placedNumber of proposals madeBrand recognitionResponse rateNumber of trade s

36、hows attendedSales volumeShare of target customer spendingSales per channelAverage customer sizeCustomers per employeeCustomer service expense per customerCustomer profitabilityFrequency(number of sales transactions),Wrong KPIs,“What is the moral of the story?”,KPIs and Behavior,Before:“Handle Time”

37、Per CallMotivated Call Centre staff to transfer callers,getting rid of complainers,making them someone elses problemCallers at 45%chance of being transferred7,000 customers each week suffered transfers 7 times or more,KPIs and Behavior,After:“Minutes Per Resolution”of a problemResolution in ONE CALL

38、 become the core goalReduced probability of call transfers from 45%to 18%,Sample:Other 1st Level KPIs across industries,Sample KPIs for Each Discipline,Operational ExcellencePriceSelectionConvenienceZero DefectsGrowth,Customer IntimacyCustomer KnowledgeSolutions OfferedPenetrationCustomer DataCustom

39、er-success focus,Product LeadershipMarketingFunctionality#of Successes#of FailuresLearn from key usersInterdisciplinary teamsPipeline,Finance Role and Resource Allocation and Alignment,Where did our money go?,Budgeting:Some thoughts,Two major roles of Budgeting:Provide real-life CONSTRAINTS to strat

40、egic planningProvide RESOURCES to realize strategic plans,Why Constraints?Over aggressive unrealistic planning,usually by Marketing/Sales need to be grounded to real lifeCreative entrepreneurial thinking when resources are limitedEnforce the need for Accountability i.e.ROI thinking for all Managers,

41、E3 Department BSC,Customer Perspective Marketing Department,Budgeting,Alignment:4-Wheels Model,Culture,Business Model,Strategic Planning,Alignment:Framework,Focus pointAlignmentQualityInnovation&DifferentiationRisk takingPerformance ManagementCorporate obsessionDecision making,Culture,Alignment:Fram

42、ework,Org StructureJob DesignC&BPolicies&proceduresDecision makingJob fitManagement SystemsBSC and KPIsDecentralized&Empower,Strategy:Framework,Role modelingVision/Mission/PhilosophyLeadership StyleDelegation&EmpowermentC&B,PromotionsSense of UrgencySpeak regularly about Performance,Strategy:Framewo

43、rk,RecognitionRecruitmentTrainingProfit sharingValuesMotivationSelf EfficacyAwarenessUseful CompetenciesCareer aspirationsAttribution(control),Strategy:Framework,EnablersTechnologyEquipmentMaterialsHumanIntellectual PropertyPartnersProperty,Funding CAPEXOPEX,Alignment:4-Wheels Model,Culture,Business

44、 Model,Strategic Planning,Operational Excellence,Customer Intimacy,Product Leadership,Organization,jobs,skills,Management systems,Information and systems,Culture,values,norms,Each Discipline Requires Different Priorities&Resources,Operational ExcellenceCentral authority,low level of empowermentHigh

45、skills at the core of the organizationDisciplined TeamworkProcess,product-drivenConformance,one size fits all mindsetIntegrated,low cost transaction systemsThe system is the processCommand and controlQuality management,Organization,jobs,skills,Management systems,Information and systems,Culture,value

46、s,norms,Each Discipline Requires Different Priorities&Resources,Organization,jobs,skills,Management systems,Information and systems,Culture,values,norms,Product LeadershipAd hoc,organic and cellularHigh skills abound in loose-knit structuresConcept,future-drivenExperimentation and out of the box min

47、dsetPerson-to-person communications systemsTechnologies enabling cooperationRewarding individuals innovative capacityRisk and exposure managementProduct Life Cycle profitability,Each Discipline Requires Different Priorities&Resources,Organization,jobs,skills,Management systems,Information and system

48、s,Culture,values,norms,Customer IntimacyEmpowerment close to point of customer contactHigh skills in the field and front-lineCustomer-drivenVariation and have it your way mindsetStrong customer databases,linking internal and external informationStrong analytical toolsCustomer equity measures like li

49、fe time valueSatisfaction and share managementFocus on Share of Wallet,Each Discipline Requires Different Priorities&Resources,Revenue,Base Retention,Share Gain,Positioning,Adjacent Market,New Business,Financial,Learning&Growth,Internal Process,Customers,Cost,Margin,Strategy+BSC,Cash Flow,Asset,Oper

50、ational Excellence,Product Leadership,Customer Intimacy,Investment Strategy,Competencies,Information Systems,Motivation,empowerment,alignment,Satisfaction,Budgeting in a Downturn,Budgeting in a Downturn,Budgeting in a Downturn,Budgeting in a Downturn,Budgeting in a Downturn,StratExCoREx,Linking the