Office of the CFO Blog

April 1 Tatum Survey results are flat to slightly positive

April 11th, 2012

The Survey of Business Conditions results indicate that this recovery is still a slow struggle, but business conditions continue to get just a bit better.  As of April 1st, the Tatum Index of Business Conditions remained flat with last month’s 5.9, which is well out of the recessionary range.  All indicators in the survey are flat or slightly positive in comparison to the March survey results. Though there are economic problems elsewhere in the world, our respondents are reporting that the U.S. is continuing to move in the positive direction of recovery.

For a more detailed analysis, the full commentary and report are posted online at http://www.tatumllc.com/perspectives/survey-of-business-conditions.asp.

Posted in CEO, CFO, Survey of Business Conditions, Tatum | No Comments »

Virtual Desktops – a game changer, especially for acquisitions

March 18th, 2012

This week we welcome back Ralph Presciutti as our guest blogger. Ralph is  a CIO Partner in Tatum Technology and a recognized expert regarding cloud computing who has been quoted in news media including Inc. magazine and PC Today.

Virtual Desktop Interface (VDI) has been an evolving technology whose time has arrived.  Virtual desktops allow the user’s desktop (including all installed software and files) to be decoupled from the physical hardware that it typically runs on. 

The user’s desktop is delivered to a variety of different devices that are capable of supporting a web browser – including PCs, tablets, smartphones, etc.  The VDI is delivered as a managed service from a central location that can include the enterprise data center or a variety of Cloud environments.  Users connect to their desktops over private networks or secure internet connections.  Unlike Terminal Server technology that has been around for years, VDIs allow users to build persistent desktops that are customized in whatever way the user would typically customize their own desktops on a their physical machine.  Depending on the VDI technology used, VDIs can provide the user’s with all of the functions and features that would typically be installed on their local desktop.

From a technology viewpoint, VDIs allow desktops to be centrally managed and administered.  All software updates, patches, scans, etc. can be performed without the need to physically touch the user’s computer.  This provides for both better service levels to the user community and the ability to access the complete functionality of your desktop from a variety of system types regardless of location.

From a business viewpoint, VDIs allow for the fast and effective means to make the necessary desktop modifications that are required to implement new projects and add the system functionality that promotes competitive advantage.  Additionally, the effort and cost to make desktop changes enterprise wide are greatly reduced in terms of time and dollars.

VDIs can facilitate integration post-acquisition. Tatum recently helped an organization through an acquisition process where users of the acquired company – who were spread across a wide geography – needed to be migrated to the new corporate systems.  Typically this would involve the modification of each physical computer – a process that might normally take weeks or months to complete.  Using VDIs, users at the acquired company were able to switch to the new corporate desktop within minutes of when the legal paperwork was signed.  In this instance it was as simple as having users point their browsers to a new site that delivered their new desktops and all associated functionality.  VDI was truly a “game changer” from both a technical and business viewpoint.

Posted in Acquisitions, CIO, Cloud Computing, IT, Mergers & Acquisitions, Tatum, Technology | No Comments »

March 1 Tatum Survey shows strong economic improvement

March 7th, 2012

The March 1 Tatum Survey of Business Conditions showed continued improvement from the upward trend that began back in November. This month the Tatum index jumped from 3.5 to 5.9, the largest gain since February of 2011. Tatum‘s executives are seeing improvement in the recent past and generally expect positive conditions to continue for the coming 60 days.

For more detailed analysis, read the survey report at http://www.tatumllc.com/perspectives/survey-of-business-conditions.asp

Posted in capital, capital expenditure, CFO, Growth, Survey of Business Conditions, Tatum | No Comments »

The Resilient CFO: Career Considerations for Today’s Volatile Landscape

March 2nd, 2012

CFO Magazine presents Leadership Summit in Orlando March 11-14, 2012.  Tatum will be a featured workshop presenter on Monday, March 12th from 4:45-5:35 PM. This will be Tatum‘s fifth year presenting at this conference, join us if you can!

Session 206:  The Resilient CFO: Career Considerations for Today’s Volatile Landscape
Bob Hostetler, National Managing Partner, CFO Services, Tatum
Dick Hissam, National Managing Partner, Tatum
Bob Woltil, VP Finance, Technology Research Corporation
John Gramer, National Vice President of Executive Search, The Mergis Group

http://www3.cfo.com/leadership-2012

  

Posted in CFO, employment, Executive Search, Tatum | No Comments »

Managing the Risk of a CFO Transition-Part 5

February 24th, 2012

Welcome to the final installment of this week’s series, Managing the Risk of a CFO Transition

Address Core Issues to Avoid Future Turnover

When CFOs are highly dissatisfied or the finance function is impaired, there are often two key points of weakness in the office of the CFO: the controllership function and information technology. A lack of competent functional managers, technical expertise below the level of the CFO, or IT systems will create a crack that grows over time into an extreme fissure in performance.

Many companies have reduced staff without enhancing the technology infrastructure required for accurate financial reporting or managing financial drivers like inventory. This creates a cycle of dependency on manual processes to derive management reports, which then breeds errors and burnout in key positions within finance. Enhanced systems and processes—intelligently designed information flow—can ease regulatory reporting, audit committee concerns and peer requirements. Making a strong commitment to IT investments on the front-end will save time, money and heartache in the long run.

Like any executive change, the potential for risks during a CFO transition is significant without a plan for mitigation. Examining causes (not symptoms) behind a transition, making changes to better support the CFO and his or her staff, and employing flexible leadership for additional support when needed can help avoid a messy transition that negatively impacts your company’s operations, morale and results.

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Managing the Risk of a CFO Transition-Part 4

February 23rd, 2012

Use Interim Leadership to Minimize Risk

During financially difficult times, there is temptation to leave the CFO seat empty during the three to six months that a search is likely to take and employ the company’s Controller to keep the ship moving. However, this approach often overwhelms the finance team and removes a key strategic perspective from the boardroom.

Hiring an experienced interim CFO is a growing trend that can have long-term benefits. This option enables the company to tackle targeted management initiatives, such as an acquisition or a restructuring, while the CFO search is underway. The interim leader can then help onboard the new CFO, potentially smoothing the transition at both ends of the search period. Similar to a relay team, an interim CFO can advance the company’s immediate objectives and then pass the baton to a permanent CFO.

Sometimes business conditions are too uncertain to warrant immediate rehiring. If a business unit is for sale or encountering difficulty, finding a permanent executive may be difficult. An interim CFO with experience in similar situations can help navigate the difficult waters absent the attendant distraction of longer-term career considerations.

Come back tomorrow for the final installment of this series, Address Core Issues to Avoid Future Turnover.

Posted in CFO, Interim CFO, Risk | No Comments »

Managing the Risk of a CFO Transition-Part 3

February 22nd, 2012

Align the Role to the Organization’s “Life Stage” Needs

The basic recruiting criteria for a public company CFO are relatively straightforward—background in finance/accounting; comfortable with public company financial reporting rules, internal controls, risk management, budgeting and operational analysis; strategic insight to a broad range of stakeholders; and able to lead a finance operations team.

As the list grows, the combination of qualities becomes a more difficult blend to find. An effective CFO must demonstrate not only strong technical, analytical and business acumen, but also “soft skill” competencies—communication, problem solving, negotiation, conflict resolution, relationship management and coaching and mentoring.

The odds of a successful “fit” are improved by looking for a CFO whose expertise matches that of your company’s current “life stage”, or the five-year goals your company is trying to achieve. For example, if your growth plan includes acquisitions, you need a financial leader who can negotiate deals and understand the complexities of valuations and post-merger integration. These needs are dramatically different from a business that needs to improve financial efficiency and achieve a turnaround. The track record of navigating a certain type of financial terrain outweighs factors like industry experience, and must be part of the recruiting criteria.

Don’t miss tomorrow’s installment, Use Interim Leadership to Minimize Risk.

Posted in CFO, Lean Leadership | No Comments »

Managing the Risk of a CFO Transition-Part 2

February 21st, 2012

Think Again Before You Terminate

If your company is considering a change in CFO leadership, make sure you thoroughly understand the facts and reasoning behind this decision. Are you in need of a CFO transition, or are you just “shooting the messenger?” During the economic downturn, most companies cut budgets and reduced staff sizes, adversely impacting the depth of financial talent on which the CFO could rely. However, the organization’s needs have not lessened. In fact, CFOs are under pressure to accomplish more than before due to increased financial risk. Most have more objectives, priorities and initiatives than they can realistically deliver.

CFOs aren’t the only ones suffering as the result of economic pressures, but they are often held accountable for poor results. The decision to terminate a CFO because of financial challenges is premature in many cases and misdirected in others, often addressing the symptom and not the underlying problems.

A costly termination and a lengthy, expensive search often exacerbate the problems instead of solving them. This is especially true if the new CFO inherits a situation identical to—or worse than—the one held by the predecessor. If the CFO role has turned over two or three times within one CEO’s tenure, the issue may not be performance but rather an impossible position.

Every audit committee should consider an independent evaluation of the entire finance function (the office of the CFO) to ensure that the existing CFO has been given appropriate support around information systems and corporate governance, including the qualified resources to get the job done. A terrific CFO who lacks proper resources and support can put the company in jeopardy, and the audit committee should take action to mitigate this risk.

Come back tomorrow for part 3 of this series, Align the Role to the Organization’s “Life Stage” Needs.

Posted in CFO, Risk | No Comments »

Managing the Risk of a CFO Transition-Part 1

February 17th, 2012

Welcome again to guest blogger Dick Hissam, Tatum’s National Managing Partner. He has written about CFO topics for Directors & Boards magazine and spoke regarding this topic at a recent Inc. magazine Leadership conference.

In the past ten years, the CFO Role has continued to grow in breadth and complexity with the advent of SOX and other regulatory requirements, and turnover has reached historical levels. Most CFOs are now making do with increasingly slim staffs, setting the stage for additional turnover.

What makes CFO turnover especially problematic is that companies, especially those in the middle market, typically lack someone on the finance team with the technical knowledge, political savvy and strategic perspective to step into the role, even for the short term. CFOs must navigate complex market conditions, meet stringent regulations, mentor staff, support business lines, satisfy investors and provide day-to-day financial leadership. These tax the most talented financial officers, and with today’s “lean” organizations, a CFO exit strains the finance team, the organization and the board.

If your company is experiencing a CFO transition, either planned or unplanned, there are predictable areas of risk. But there are steps you can take to mitigate those risks.

Understand the Impact of a CFO Transition
The CFO serves as a company’s financial steward and watchdog, providing business strategy support, horizon watching, insight and analysis into financial and operational performance. During a CFO transition, the Controller will most likely be able to maintain daily operations. However, financial leadership, strategy and direction may suffer, which can impact potential mergers and acquisitions, financing negotiations and the ability to respond to board requests and CEO priorities.

A CFO transition can also impact the organization’s credibility with outside stakeholders, such as investors, lenders and private equity owners. During a CFO vacancy, companies must assure stakeholders that risks will be mitigated.

Come back next week for more on this topic.

Posted in CFO, Lean Leadership | No Comments »

Business Conditions as of February 1, 2012

February 8th, 2012

As of February 1, after three consecutive months of an upward trend in business conditions, our Tatum Index of Business Conditions has flattened. The flattening of our Index was caused by a robust optimistic outlook offset by somewhat weaker results in the last 30 days. Therefore, we interpret that this is a temporary consolidating pause and not a change in the fundamental positive trend. The reports varied widely by region, with the southeast and mid-west still quite weak, and the northeast and Pacific regions experiencing better conditions.

Visit our website to view the Survey of Business Conditions Report and to read our Executive Commentary.

Posted in Survey of Business Conditions | No Comments »

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