Organisations – whether small or medium in size or uniquely entrepreneurs are encouraged to build resilient financial skills sets, data analytics teams as all are transacting in a global market with increasing customer expectations, but working with budgetary constraints, increasing competition and new product lines to market or develop.
“In a competitive and fluid business environment it’s important that CFOs think strategically about the cost base of the enterprise. They need to truly partner with the business to identify where to prioritise investment and place the best bets.
“This requires a clear understanding of how different business activities and processes are contributing to creating value and growth for the organisation.” – Sanjay Rughani, CEO Standard Chartered Tanzania and Deputy Chair IFAC Professional Accountants in Business Committee.
Historically and still applied presently, cost cutting is a strategy that most companies apply in order to achieve profitable growth when margins are squeezed. However, better strategies that deliver profitable value utilise the new insights and opportunities that data analytics, skill resources and integrated thinking enhance in an organisation.
For companies to be better positioned to deliver sustainable growth, business strategy must be broken down into respective operational plans and align with the cost base. Focusing on strategic alignments, accepts that there are other costs that are not as much in focus. CFOs can lead organisations in navigating the business and in investing in good costs, growth opportunities and cut the bad costs.
To support a company’s underlying strategy, good costs are to be invested in developing people, research and development to fuel innovation, better systems and processes in order to deliver profitable businesses in the future.
Most people in finance are a bit light in business context. This challenges the need for CFOs and business managers to work together and to an extent swap people around as that builds organisational knowledge and breaks down potential barriers that might exist, as they need to work together in order to make it work for the entire company.
Information shared between the supplier value chain and customers’ needs leads to better production planning and cost management. Envision and utilise data analytics, cost management and human capital as both an asset and a transformation tool of a company.