Controlling Risk in Finance
Controlling risk in the finance department is an important task that is often overlooked. CFOs must manage the financial risks of the corporation and it is their duty to prevent losses to the business. By creating an action plan, finance leaders can start to control continuous risks—those with both direct and indirect costs—by instituting four operational performance measures in their departments. There are four suggested metrics that CFOs can use that will begin to transform the finance department into a “knowledge-work factory.”
The End of the Holiday Shopping Era
Retail has transformed in almost every way imaginable, and consumers have changed along with it. Customers don’t want retailers to dictate their shopping schedule and are becoming frustrated by deals that are restricted to a certain timeframe (such as Black Friday) or buying mode (such as in-store specials only). Shopping is also not on an as-needed basis anymore. Instead, more consumer’s preferences are formed by what they learn about products from reviews, friends and news items on an ongoing basis. Therefore, it doesn’t make sense for retailers to try to influence product or brand decisions only during discrete windows of time.
Real-Time Decisions Lead to a Successful Future
“Planning is an integral part of enterprise performance management (EPM). Gartner defines EPM as ‘the process of monitoring performance across the enterprise with the goal of improving business performance.’”
Dynamic planning is used to help businesses make smarter decisions faster in this fast-moving and unpredictable time. In a world where the rate and magnitude of change continue to increase, there is no reason to expect this acceleration will slow down- which is why adopting the philosophy of dynamic planning is crucial.
Technology is Widening The Gap in the Competition
Firms that are more productive, profitable, and more innovative are considered “super firms” and are succeeding in large part due to information technology. Is it because larger companies can afford the extra costs that come with better technology? Or because they have the size to avoid their competition altogether? These organizations aren’t succeeding because of IT per se, but because they effectively combine it with other intangibles, like good management, well-known brands, or intellectual property.
Building A Strong Innovation Pipeline
“Companies and government agencies often make the mistake of viewing innovation as a set of unconstrained activities with no discipline. In reality, for innovation to contribute to a company or government agency, it needs to be designed as a process from start to deployment.” These companies need to start prioritizing their innovation efforts before they reach the engineering stage. This way, the innovations that do reach engineering will already have substantial evidence because products and working prototypes will have already been tested.