The Ledger

Competitive Decision Making With Porter’s Five Forces

The goal of every business is to increase and retain profits while surpassing the competition. When it comes to strategic planning, knowing who the competition is and understanding how their actions will affect the business is critical to long-term success. One way to analyze your competition is by using Porter’s Five Forces model to break them down into five distinct categories, designed to reveal insights. Originally developed by Harvard Business School’s Michael E. Porter in 1979, the five forces model looks at five specific factors that determine if a business can be profitable, based on other businesses in the industry. Understanding the competitive forces, and their underlying causes, reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition (and profitability) over time.

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Ignorance is No Longer Bliss for the Businesses Who Ignore Spreadsheet Risk

The urgency of modern data management is increasing for most organizations, yet many struggle with size and complexity and are uncertain about where and how to get started.  Data that is properly governed, timely, secure, and trustworthy lays the foundation that enables the entire organization to leverage the data for valuable insights. However, many C-level executives still make important business decisions based on spreadsheet data alone, which in turn exposes them to major financial risk. With limited tracking and security options, spreadsheets are a tailor-made environment for errors that can go forever undetected. This means that business leaders are running scenarios, calculating costs, and producing reports that are being used to make important decisions with the wrong information. To be successful and ultimately profitable, these businesses must reduce dependence on spreadsheets and invest in a robust and integrated system that can  turn data into answers. 

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Modern CFOs Are Leading the Charge to Improve Cost Management Outcomes

“CFOs can improve savings programs with the right architecture and information systems in place.”

In the past, the focus of cost management strategies has been on saving and cost-cutting to fund growth and profitability. Traditional approaches to cost management were streamlining business processes, reducing external spend, improving policy compliance and integrating organizational structure. Although relying on tactical improvements to achieve strategic-level cost targets is likely the primary reason many cost programs haven’t been successful, there are other significant barriers as well.

Find out how much money your business could save using this AP cost savings calculator.

Deloitte’s 2019 Global Cost Survey found that many cost management programs fail because they lack the proper architecture― outdated ERP systems, disparate legacy tools and poorly structured cost management programs. Armed with intelligent technologies and a forward-thinking mindset, leading CFOs are shifting their focus to fund the digital transformation needed to develop the agile business models that position companies to grow in digitally disrupted markets.

Read More at The Wall Street Journal >

Navigating the Cost Stages of Your Business

“Transformative companies know that having access to accurate cost information is more than just a novel exercise, but the insights can drive real competitive advantages.”

In business and in life, every single decision comes at a cost. Fully understanding each cost associated with a choice is a critical activity for any company looking to compete and grow. Cost stages in a business are like life stages – as you grow, you must refine each step in the process to thrive. Each stage requires different tools and capabilities designed to handle everything from minor bumps and bruises to major interventions. To make better business decisions, finance leaders must first improve the way they leverage their cost data to propel long-term, sustainable growth.

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