BUSINESS PROCESS REENGINEERING: The Sign of a Proactive CFO

Business Process Reengineering (“BPR”) involves the redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality. In BPR, companies rethink existing processes from a blank slate and seek to deliver more value to the customer.  The emphasis in BPR is solely on the customer needs.

As I’ve been told many times, financial accounting doesn’t directly touch the customer and thus its involvement is not required in the BPR process; however, one of the CFO’s primary concerns should be the effectiveness and efficiency of operation, which is one of the key objectives of internal controls.  In essence, the CFO should be a critical member of the BPR team and seek an active role in achieving its objectives, as it reduces internal weaknesses. As Cory Booker said, “If you look at great human civilizations, from the Roman Empire to the Soviet Union, you will see that most do not fail simply due to external threats but because of internal weakness, corruption, or a failure to manifest the values and ideals they espouse.”^[i]  Internal controls addresses internal weakness through performance goals, profitability goals and safeguarding of business resources. These are essentially the basic objectives of any business and an integral part of BPR.

The control activities that collectively make up internal controls are the policies and procedures that help ensure management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the entity’s objectives. Control activities include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties.  Although these components apply to all entities, they may be less formal and less structured in a small company.  Having a CFO lead your BPR initiatives will help bring financial discipline to your business.  Contact a Trusted Advisor, someone who understands your business, that can help determine what change is necessary to not only survive, but thrive.  Legacy Consulting can be at your disposal 24/7 to help you see the future of the business and help instill the discipline today to achieve the ultimate goal tomorrow.  Visit www.legacy-consultingpartners.com today to see how I can help your business.

 

[i] “Cory Booker.” BrainyQuote.com. Xplore Inc, 2016. 11 August 2016. http://www.brainyquote.com/quotes/quotes/c/corybooker675401.html

 

EXIT STRATEGY: The Art of Unlocking Value

One of the greatest challenges facing an entrepreneur is the process of coming to terms with the appropriate Exit Strategy for their business.  Thinking about, and having an Exit Strategy is often viewed as being short-sighted or lacking passion for the business you’ve worked so hard to create.  This feeling was embodied by Mark Cuban when he said, “Don’t start a company unless it’s an obsession and something you love. If you have an exit strategy, it’s not an obsession.” With all due respect to Mr. Cuban, if you don’t have an Exit Strategy you’re failing to create the most important financial plan, the monetization of perhaps your greatest asset – your business.

Acquisition is one of the most attractive Exit Strategies and requires a long-term, not short-term view of the market and competition to determine likely acquirers.  Avoid the pitfall of focusing on who would be the best acquirer today, because they are often not the best candidate tomorrow.  First, determine your time horizon for exit and what you think the market will look like at that point in time.  It is from this vantage point that you should begin to form the list of potential acquirers. Now that you know when you want to exit and what the market will look like at that future point, you should incorporate this into your strategic plan.  Begin to position your company to be as valuable as possible at that future point to help command a premium price.  You can command this premium because you have moved your company in the right direction with greater speed and success than the competition.  The acquirer is now in a position where acquiring your business will deliver critical capabilities faster than they could develop those capabilities themselves.  The challenge is knowing what the market will look like at that future point?

It is always beneficial to have a Trusted Advisor, someone who understands your business, that can help determine what change is necessary to not only survive, but thrive.  Legacy Consulting is at your disposal 24/7 to help you see the future of the business and help instill the discipline today to achieve the ultimate goal tomorrow.  Visit http://www.legacy-consultingpartners.com today to see how I can help your business.

STRATEGIC PLANNING: What a Business Should Be

Often times we begin our Strategic Planning focusing on what our business is today.  I contend that the optimal approach is to instead look at what the business can become given its competitive advantages and opportunities in the marketplace.  With this approach you can determine the full potential of the business and then craft actions and allocate resources required to achieve that goal.

Strategic Planning is not a “one-time” process but instead an ongoing process.  It is necessary to change the direction and performance of your business, which is required given the ever-present competitive threats in the marketplace.  This challenge was best summed up by Robert Waterman, Jr. when he said “Most of us fear change.  Even when our minds say change is normal, our stomachs quiver at the prospect.  But for strategists and managers today, there is no choice but to change.”   Fear and reluctance to change is what leads to a business being left behind by their competition.  It is always beneficial to have a Trusted Advisor, someone who understands your business, that can help determine what change is necessary to not only survive, but thrive.  Legacy Consulting can be a sounding board, at your disposal 24/7 to help you see the future of the business and help instill the discipline today to achieve the ultimate goal tomorrow.  Visit http://www.legacy-consultingpartners.com today to see how I can help your business.

 

Chris Abbamonte

(860) 280-7931

cabbamonte@legacy-consultingpartners.com

http://www.legacy-consultingpartners.com