A Shift in Thinking and Priorities for CFO’s in 2011

Posted by Kelley LearcloseAuthor: Kelley Lear Name: Kelley Lear
Email: kelley.lear@redmoonsolutions.com
Site: http://blog.redmoonsolutions.com
About: Kelley is a member of the executive leadership team and leads our sales and marketing efforts at Red Moon Solutions. Kelley’s extensive experience in project management, product management, and consulting with Fortune 500 and Global 1000 clients is extremely important in this role.See Authors Posts (127) on Jan 25, 2011 | 0 comments

Per my last blog entitled “Top 10 Priorities of CIO’s” , I promised to follow up with some additional blog posts related to making some inroads in cementing relationships with IT and Finance, how to build a business case and obtain additional funding in your tax departmetn. In the blog noted above, I introduced the concept that understanding the other side of the fence will begin to help you better understand the internal stakeholders that you need to build better relationships with. So, I gave you the CIO priorities for the coming year.

In this blog, I will now share some insight into what your CFO may be thinking this year and what the thinking is overall on CFO priorities for 2011. Why should you care? In most cases, the CFO holds the purse strings…and, according to Gartner Inc., CFOs are playing a bigger role in IT decisions than in the past. As the country crawls out of the recession (albeit slowly), building a strong CIO-CFO alliance will be important to executing tax technology plans for your tax department, and more specifically, in having tax even have a seat at the table, with a line item on the budget spread.

Amazingly enough, my research has been somewhat positive in terms of the changing roles and mindsets of CFO’s for the coming year. According to recent December 2010 surveys, CFO’s and CIO’s indicate that they plan to do more hiring in the first quarter of 2011. Significantly more. In addition, according to Robert Half Financial, accounting, finance and IT sectors could be on the rise in terms of new job growth as 80% of CFO’s expressed confidence in their firm’s growth in these areas (based on interviews with over 1,400 CFO’s across the US).

According to Deloitte’s 2010 Q4 CFO Survey, CFO’s are shifting from risk averse, defensive strategies to expansionary in 2011. Cost control and cost cutting strategies have fallen from first priority to third, with I a focus on ntroducing new products or services and expanding into new markets topping the list. These expansionary strategies include heightened capital expenditure, emerging markets, organic growth and expansion through low cost acquisition. Increased market demand and looser credit conditions are sited as the largest drivers for the change in optimism amongst CFO’s.

Further, according to the same survey, I selected the some of the top CFO thinking for opportunities, concerns and expected challenges in 2011:

Greatest Opportunities for Businesses in 2011:
1. Using the low growth environment to reduce costs and make the business more efficient.
2. Investing in technology to drive new products and improve existing products.

Greatest Concerns for their Businesses in 2011:
1. Continued uncertainty or outright deterioration in economic conditions.
2. Continued bond market turmoil in the Eurozone.

Greatest Challenges in their roles as CFO’s of their Business:
1. Delivering earnings enhancing acquisitions and decreasing leverage at the same time.
2. Ensuring the group is focused on growth opportunities.
3. Balancing investment with risk avoidance.
4. Developing credibility with investor community.
5. Prioritizing investment.

With learning and understanding come a tax professional that is able to leverage that knowledge in building relationships, and using that information when in management, operations and/or strategy meetings. This will also be useful in helping you to craft your business case for personnel, process and technology changes for your tax department. In future blogs we will explore how this can all come together.