Across the world, organizations are reviewing their operations because of the present global economic downturn. One of the most common CFO concerns is to ensure that the company’s finances are well managed and to trim business operations to be profitable.
According to a Deloitte survey, 70% of CFOs plan to hedge or reduce risk in the balance sheet or in the business, and 56% plan to reduce debt levels. The companies that will differentiate themselves are not the ones that are counting their pennies right now, but those that are strategic about what they will be two years hence. Companies require confidence and foresight to make new investments during volatile times like these. Companies that make appropriate financial, operational, governance and risk management changes now, will not only be in a better position to maintain cash flow and to effectively weather the current economic storm, but will also have the opportunity to lay the foundation for renewed growth and long term profits when the economy rebounds. The first mover companies are focusing on finding opportunities for improvement in procurement, receivables, and payables.
Outsourcing, at a time like this, is particularly important for multinational companies as it helps consolidate its varied global processes into one unified process for the whole company ensuring standardization across the globe of all its practices – back-office, systems, solutions, processes and operations – to make the company efficient. Needless to say, this has an inherent cost advantage that grows to achieve better profitability. Outsourcing of key operations is a crucial investment smart organizations make to reap downstream benefits over a 5-7 year period.
In the current competitive market scenario, innovative companies are using analytics to optimize their profits and gain competitive advantage. Analyzing past consumer behavior helps companies provide actionable predictions for each customer. These predictions encompass all channels - online and offline, foreseeing which customer will buy, click, respond, convert or cancel. Such predictive analytics helps companies better understand their customers by providing insight based business decision support. The predictions on buying behavior generated by predictive analytics improve response rates, click rates, and customer retention, which in turn, improve profitability for organizations.
By Manish Vora
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