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Thursday, April 24, 2014
News Making Money

Companies with strong “business partnering” report stronger results

26/10/2013 18:13 (179 Day 20:17 minutes ago)

The FINANCIAL -- A global survey of CFO’s and supply chain leaders by professional services organization EY, finds that companies with evidence of strong “business partnering” between the CFO and the supply chain leaders report better results than those with a more traditional finance model in place.



Among business partner respondents, 48% report EBITDA (Earnings before income tax, depreciation and amortization) growth increases of more than 5% in their company over the past year, compared with just 22% of those with a more traditional relationship, according to Ernst & Young.

Partnering for performance, a global survey of 423 CFOs and heads of supply chain at companies, half of which have revenues of US$1b+, as well as a series of in-depth interviews with CFOs and heads of supply chain, also finds that despite the positive impact on revenues, only 26% of finance executives and 21% of supply chain executives say that the CFO’s contribution to the supply chain is primarily based around an enabling, collaborative, business partnering role. However, 70% of CFOs and 63% of supply chain leaders say that their relationship has become more collaborative over the past three years.

“When cost reduction leapt to the top of the corporate agenda at the height of the financial crisis, supply chains – which typically hold a large proportion of many companies’ costs – were one of the first places that CFOs turned to for savings. However, as companies looked to stimulate growth, manage economic uncertainty and the impacts of globalization, the supply chain has also become a source of competitive advantage," Andrew Caveney, global supply chain leader at EY, said.

“To really unlock both the cost and agility advantage of the supply chain, it is key that the CFO and Head of Supply Chain really collaborate effectively. Through this collaboration, the CFO can support the supply chain leadership in ensuring greater alignment with corporate strategy, better investment decisions, better risk management and improved supply chain insights through analytics capability,” he added.

Companies that have a business partnering model in place tend to have higher EBITDA growth. They are also more likely to report that the return of a growth agenda is driving the need for a more collaborative relationship: only 4% of traditional CFOs cite this in the top three factors, compared to 18% of business partnering CFOs. In companies that are focused on cost-cutting, however, CFOs are more likely to play a traditional financial role, according to Ernst & Young.


“Although a company’s financial performance will inevitably be determined by a multitude of factors, a strong business partnering relationship between the CFO and the supply chain leader is definitely a contributing factor. Equally, higher growth may also enable greater investment in the resources required for business partnering. This can create a “virtuous circle” in which business partnering and higher growth can reinforce each other," said Caveney.

Eighty per cent of business partner CFO’s report a good or very good overall relationship with the head of supply chain, compared with only 35% of traditional CFOs. They also report stronger agreement over key priorities, better alignment between finance objectives and the supply chain, and a mutual understanding of key risks and opportunities. In the supply chain function, 100% of those in business partnering relationships rate the overall quality of the relationship as positive, compared with only 23% of those in a traditional relationship with finance. More than 90% consider the level of agreement over key priorities and the mutual understanding of key risks and opportunities, to be positive, compared with 18% and 26% respectively of those in a traditional relationship.



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“The former Yugoslav Republic of Macedonia”: presidential election and early parliamentary elections

23/04/2014 16:38 (21:52 minutes ago)

The FINANCIAL -- A 14-member delegation of the Parliamentary Assembly of the Council of Europe (PACE), led by Stefan Schennach (Austria, SOC), will travel to “the former Yugoslav Republic of Macedonia” from 25 to 28 April to observe the conduct of the presidential election (2nd round) and the early parliamentary elections, alongside observers from the OSCE’s Parliamentary Assembly and Office for Democratic Institutions and Human Rights (ODIHR), according to PACE.



Major Cloud Service Providers Slash Prices; Threaten Smaller Players’ Existence: IDC Warns

19/04/2014 13:40 (5 Day 00:50 minutes ago)

The FINANCIAL -- In the last week of March, major Cloud Service Providers (CSPs) in Asia dropped their prices for core services dramatically and IDC believes that this will make it very difficult for smaller CSPs to remain in business if they continue to rely on provision of basic, undifferentiated services, according to International Data Corporation (IDC).

Zurich identifies seven cyber risks that threaten systemic shock

23/04/2014 17:00 (21:30 minutes ago)

The FINANCIAL -- The recently published Zurich Cyber Risk Report, created in collaboration with the international think tank Atlantic Council, argues that cyber-risk management professionals need to look beyond their internal information technology safeguards to interconnected risks which can build up relating to counterparties, outsourced suppliers, supply chains, disruptive technologies, upstream infrastructure and external shocks, according to Zurich Insurance Company.


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