All CFOs view profitability as a central part of their existing jobs, still they are not viewed as the person getting profit to the company. The CFOs need to restructure their role in the organization. For this objective, CFOs must go beyond broad, departmental performance measures to build grassroots profitability management processes into their companies' core management activities. This task has three key components.
First and foremost, the effective CFO needs to develop a systematic understanding of the company's baseline profitability through profit mapping.
This will reveal
2.Low profitability, and
3.Negative profitability
Second, building a set of ongoing organizational processes for profitability management is a critical CFO job. i.e. integrating profit map information into day-to-day jobs throughout the company.
Third, transition management from the existing compartmentalized system to the dynamic integrated operational system.
Together, these can lead to major increases in revenues, profits, and cash flow of the company with the existing infrastructure and not with any major capital investments.
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