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A TIME FOR TRANSFORMATION Business activity has decreased, employment is stagnating and morale is at its lowest: never before has a stock market crisis turned into an economic crisis with such speed. However, the greatest mistake would undoubtedly be to focus only on the figures and viewpoints broadcast by the media in recent months, as their tone is often too alarmist or even too optimistic at times. Because underneath the breathtaking slowdown of the economy a more profound movement is becoming apparent: a shift that challenges the current business models and economic thinking. With this in mind, simply burying one’s head in the sand and waiting for the storm to pass seems a rather dangerous strategy.
Strategic changes and new models
The new meaning of performance
Careful examination shows that the current situation is the result of a series of disruptions. The first of these, in the fall of 2008, was a disruption in sources of financing: the markets, and later the banks, increased the cost of credit, precipitating the crisis we are experiencing today. This financial disruption was followed by strategic disruption, since in this same period 98% of company directors believed they would be forced to revise their business model in the next three years!
New models call for new indicators. Performance measurement has changed radically too. “In the space of just a few months, indicators went from being externally focused to being internally focused – and from being centred on longterm profitability to cash flow optimisation, productivity and human resources,” explains Marc Bensoussan, Senior Vice President and COO of CSC for South and West Europe.
Along with the strategic disruption came operational disruption. Faced with a severe downturn in business, companies had to rapidly adapt under pressure by reducing their costs and staffing levels, but also by rethinking their relationships with customers, suppliers and competitors. “In all of these areas, the crisis has accelerated the rate of change in an exceptional manner,” says Claude Czechowski, President and CEO of CSC for South and West Europe. Who could have imagined just a few months ago that Fiat in Italy would merge with Chrysler in United States? Or that two competing banks, the Société Générale and the Crédit Agricole, would merge their asset management divisions? Who would have thought that after years of growth and manufacturing to order, the automotive industry would revert to selling from stock in just a few months? In all sectors, new economic and business models are taking hold.
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In this context more than ever before, companies need integrated information systems that are capable of quickly measuring performance and helping those at the helm steer a safe course through the storm. CFOs play an important role in this: they know how much leeway the company has and they have in-depth knowledge of the processes and methods for measuring its effectiveness. Some believe that because of this the CFO (who, like the CIO, tends to be closer to operations) is the most strategically placed executive in the company to create a new business model and to monitor its progress with appropriate performance indicators.