tag:blogger.com,1999:blog-51904124177796812922024-03-19T01:48:18.617-07:00SansPareil Corporate Advisory GroupEngage with us at www.sp-cag.com
Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5190412417779681292.post-9229441962091165642016-02-28T23:59:00.002-08:002016-02-28T23:59:59.502-08:00Who will bear the "Brent" of the crude oil fiasco!<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE-C_A_GQsaHF3Ra5ull6KZq4buYQBrmUv4OOLgao1cFqRtU6bnzzj_k9f-Sq5jgbpqVjylnFuhRcEWrXZHv0OPLhm2lEzFKmk4dvioN3pKRddFwdGjxma6sbmXHZUBCZCC_CRdDfcOW0/s1600/Brent+2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE-C_A_GQsaHF3Ra5ull6KZq4buYQBrmUv4OOLgao1cFqRtU6bnzzj_k9f-Sq5jgbpqVjylnFuhRcEWrXZHv0OPLhm2lEzFKmk4dvioN3pKRddFwdGjxma6sbmXHZUBCZCC_CRdDfcOW0/s400/Brent+2.jpg" width="400" /></a></div>
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<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">The
global price benchmark index, which is used for around two-thirds of
internationally traded crude oil supplies, is on the verge of collapse. Some
would say it’s already as low as it can get yet other’s would say the worst it yet to
come. Whatever the opinion, Market Analysts never fail to remind us, with incessant
news articles and reports, pinging away to glory on our app-overloaded
smartphones. </span></span><span lang="EN-IN"><span style="font-family: Verdana, sans-serif;"> </span></span></div>
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<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">The
reason behind the fall of Brent Crude are actually one too many. From the boom
of the US Fracking Industry, to the delayed response of OPEC to freeze oil
output. Russia’s adamant refusal to cut output for fear of losing market share.
The economic mismanagement of Venezuela along with the sadistic greed of the
Middle-East to remain an oil superpower. All of this read in light of the
revelation at Davos, where it was evident that “the global economy seems to be
hanging in balance”, sounds like a recipe for disaster, which is fast materializing.
</span></span><span lang="EN-IN"><span style="font-family: Verdana, sans-serif;"> </span></span></div>
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<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">America’s
determination to achieve self-sustenance in the energy industry is proving
counter-productive. So much so that they have ended up exporting oil to
countries which already have abundant reserves!
What could be more indicative of excess supply than that? Brent Crude
has settled for now at $ 35 / Barrel range, after dilly dallying between $ 29
and $ 35 throughout the week.</span></span></div>
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<span lang="EN-IN" style="font-family: "Times New Roman",serif;"> <img height="322" src="https://dwq4do82y8xi7.cloudfront.net/x/JaFDr0cQ/" width="400" /></span></div>
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<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">So
why does any of this matter for you? You as a consumer, or a manufacturer, or
service provider. What difference does this make? </span></span></div>
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">A consumer would be elated since less
expenditure on fuel implies greater income available to expend in different
ways. This emotion percolates to our manufacturer’s / business organizations /
service providers as well. Fuel is an unavoidable cost across sectors, and its
drop serves as a welcome relief for the overburdened cost centers which characterize
our economy. </span></span><span lang="EN-IN"><span style="font-family: Verdana, sans-serif;"> </span></span></div>
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<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">From
the short term perspective, it appears that fluctuating Brent Crude is favorable,
facilitative and a harbinger of all good things to come. Higher disposable
incomes (minus the fuel) result in higher sales (from the business angle),
increasing profits and cash flow (hypothetically) spreading joy all around. Yet
as Isaac Newton once said, “what goes up must come down”. </span></span><span lang="EN-IN"><span style="font-family: Verdana, sans-serif;"> </span></span></div>
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<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">On
the other side of the world, big players like Royal Dutch Shell and Schlumberger
have at present cut an additional 30,000 jobs in 2016. Put together, more than
2,00,000 layoffs have taken place this financial year across allied verticals,
with an imminent threat that it’s not the end. </span></span><span lang="EN-IN"><span style="font-family: Verdana, sans-serif;"> </span></span></div>
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<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">Firms feeling the pressure of Black
Gold, down-sizing of operations, further retrenchment and all that follows. We
may be looking at the crumble of our economy, without even realizing its
enormity. </span></span><span lang="EN-IN"><span style="font-family: Verdana, sans-serif;"> </span></span></div>
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<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span lang="EN-IN"><span style="font-family: Verdana, sans-serif;">The only way to weather this storm is
to wait it out. Keep an eye and ear out for cross border verdicts. Be aware of market
trends. Strategize business processes and outlay to at best maintain profits,
or delay losses (depending on how well you are doing as of now). It is not
wrong to take advantage of the price swings, as long as you have a contingency
plan for the times when they start working against you. </span></span></div>
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<i>(This blog post is authored by Netra Prakash, Business Analyst at SansPareil - www.sp-cag.com)</i></div>
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Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.com0tag:blogger.com,1999:blog-5190412417779681292.post-45295548611163482462016-01-28T23:04:00.001-08:002016-01-28T23:04:42.458-08:00Make a Dash for it!<div dir="ltr" style="text-align: left;" trbidi="on">
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<img class="irc_mi" height="333" src="http://ontimebi.com/wp-content/uploads/2013/10/business-intelligence3.jpg" style="margin-top: 145px;" width="500" /></div>
<span style="font-family: Verdana, sans-serif;"><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br /></span>
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<span style="font-family: Verdana;"><br /></span>
<span style="font-family: Verdana, sans-serif;">In
this Information-driven world of business, the question often arises as to what
information and how much of it is really relevant. When the CEO of a Manufacturing
group needs to know which stock are fast-moving and which are blocking funds, a
long list of inventory positions spanning a couple hundred sheets would prove
useless. Similarly, the CFO of a suffering Retail-Chain would require segment-wise
analysis of position. Handing that gentleman the bare Financial Statements and
leaving it to his best judgment to fish out reasons for the loss would be
counterproductive! </span></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">What
these People really need is a bird’s eye view of what’s going on with their Enterprise.
They require basic statistics, key ratios and financial metrics which
facilitate quick as-is-where-is outline of where they stand. </span></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The
era of our user-friendly internet has seen the arrival of abundant templates,
software’s and various other un-pronounceable sorts of gizmos and widgets. All
of these are for the so-called purpose of managing accounts, financial
statements, and managerial reporting. Yet, how do you decide which one of these
is right for your organization? </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Is it possible to customize the program in such
a manner to suit only your unique business requirements? How can you ensure
that you make the right business moves? How can you tap your entity’s intrinsic
growth potential?</span></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The
magic word is “Dashboard”. Truth be told, there isn’t much of magic involved,
yet the idea of fantasy always stirs up a bit of interest. This mechanism
commonly referred to as an Information Management Tool, will give an Executive
/ Director / Owner etc. (by whatever name called) prompt data. </span><br />
<span style="font-family: Verdana;"><br /></span>
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<span style="font-family: Verdana; margin-left: 1em; margin-right: 1em;"><img src="http://www.bethkanter.org/wp-content/uploads/Dashboards.gif" /></span></div>
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<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Granted that it
is also what any odd accounting software does. Yet, this data is analyzed,
highlighted, illustrated and can be used to chart out comparisons with any period
of the user’s choice. This is not another routine MIS, which pumps out numbers
and more numbers. Specific to said venture in question, a Dashboard will depict
Sales / Service targets achieved, major Costs (if relevant), Profits / Losses, Liquidity
/ Solvency ratios, Turnover ratios, Industry / Company specific metrics, and
the list goes on.</span></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">As
Aladdin’s genie said “Your wish is my command”, so is the wish of a business
owner the command for the Dashboard. It matches his pace or style of working.
It is a constant companion in the face of strategic or operational decision-making.
It keeps him in the loop of what is really going on, even at the grass-root
levels. With the use of dynamic gauges, speedometers, bar graphs, pie charts
and all else that the ever-updated Microsoft Excel has to offer, the Dashboard
becomes his new best friend. </span></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The
foundation being our trustworthy Financial Statements, (Balance Sheet,
Statement of Profit & Loss and Cash Flow Statement), a Dashboard is molded
out of those reported figures, further evolving to permit modification by the
maker and user in line with market conditions, revised budgets, etc. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">A picture
is worth a thousand words, and the weight of this sentence can be appreciated
with just a glance at the harmonious integration of statistics with design,
conferring meaning on often overlooked basic financial ideas. </span></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">At
the end of the day, the Dashboard can be whatever you want it to be. At home,
at work or on the move, it will travel with you and inspire you, jolting you
out of the conventional ways of running a business. </span></div>
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Interested in developing customized dashboards for your business...we have a knack for that.</span></div>
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<br /></div>
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<br /></div>
<div style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<i>(This blog post is authored by Netra Prakash, Business Analyst at SansPareil - www.sp-cag.com)</i></div>
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Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.com0tag:blogger.com,1999:blog-5190412417779681292.post-44964497553554751292015-06-29T18:11:00.002-07:002015-06-29T18:11:30.324-07:00From Leaders to Pleaders - A Greek tragedy<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiavwXRB4pq9iWL5Hr61tBAc5iyiOSZ63LcKXZnqaAdpinvjrjH3FxDUoMLw_YcLn4voGY9ktWHXKSkqZj5wjpUQ-fpctipz1kobiLUVCFFwAh0DrujO2WvhHFKcfrE6GCoj8J9sYKlkGk/s1600/greek+economy.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiavwXRB4pq9iWL5Hr61tBAc5iyiOSZ63LcKXZnqaAdpinvjrjH3FxDUoMLw_YcLn4voGY9ktWHXKSkqZj5wjpUQ-fpctipz1kobiLUVCFFwAh0DrujO2WvhHFKcfrE6GCoj8J9sYKlkGk/s400/greek+economy.jpg" width="400" /></a></div>
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<span style="font-family: Verdana, sans-serif;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">How does a country from being at the fountainhead of philosophy, mathematics, science, astronomy and intelligentsia find itself on a slippery slope (no pun intended) - This is story of Greece, as its economy along with its plethora of knowledge seems to be heading towards an abyss.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">This is not the first financial crisis in the past couple of decades to impact Europe but the very magnitude and the lack of initiative on the part of Greece primarily and the European Union is in itself very baffling. One does not begin firefighting when the raging fire has burnt everything in its path. </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Corporates across the world have to learn from this crisis as there are many parallels here.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"><strong>1) When the writing is on the wall - Read.</strong></span></div>
<div style="text-align: justify;">
<strong><span style="font-family: Verdana;"></span></strong> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Many corporates like Greece are in denial of the looming threat but ignore it at their own peril. Call it arrogance or ignorance but many a wildfire have been stopped in its tracks by pouring just a cup of water at the right time. Corporates should have a risk recognition and mitigation mechanism that puts out these small fires as soon as they manifest.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Performance measurement is the key - Countries should watch their GDPs and Corporates their fiscal, operational and financial performance.</span></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"><strong>2) There is no such thing called over governance.</strong></span></div>
<div style="text-align: justify;">
<strong><span style="font-family: Verdana;"></span></strong> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">There is either governance or no governance anything in between doesn't make any sense. Setting policies, procedures, practices that work and realistic are critical. A vision statement that endears itself to the masses but cannot be practically executed or implemented makes no sense. Same goes with an Operation Manual or Standard Operating Procedures that are neither standard or operational. The good-to-have feeling, whether it is from a Corporate Governance or governance of a nation, has no place in the real world.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"><strong>3) Pay attention to your finances.</strong></span></div>
<div style="text-align: justify;">
<strong><span style="font-family: Verdana;"></span></strong> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Greece like many corporates of the day would definitely have planned to change the world but did they have enough gas in the tank to go the distance or for that matter knew who would be funding them at the pit stops is a key question. </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">The CFO and the Finance team are the last people to abandon ship but if there is a sudden flight of talent from this team the warning bells should sound. </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Another important point to note is not to raise or take money more than you can spend - this in my opinion is the real funny money. Corporates that are not fiscally intelligent do not know what to do with this excess cash - they land up buying a whole amusement park when all they needed were two passes. Thrift, frugality and spending within limits are not necessarily bad terms.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Bloomberg Business had this to say in 2004 - <span style="font-size: x-small;">"</span></span><span style="font-family: Verdana, sans-serif; font-size: x-small;"><em>With public debt totaling €168 billion in 2004, it’s clear that the Olympics alone did not bring about an economic collapse. Yet the Athens Games epitomized the structural problems that bedeviled the country for decades. It’s not just a question of how much money was spent on the Olympics, it’s also how it was spent and where it came from. After a period of austerity to tighten up its finances and qualify for euro entry in 2001, the Greek government loosened the purse strings once it entered the single currency. The games were just one of several areas where public spending was unchecked and funded by unsustainable borrowing"</em></span></div>
<div style="text-align: justify;">
<em><span style="font-family: Verdana; font-size: x-small;"></span></em> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">And just for the record the Games cost them - <em>€9 billion</em> </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"><strong>4) Don't anticipate a bail out package.</strong></span></div>
<div style="text-align: justify;">
<strong><span style="font-family: Verdana;"></span></strong> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Much to the chagrin of the European Union, Greece always believed that they would be bailed out yet another time. The very word "bail out" is temporary in nature and is not a permanent solution. One does not borrow more to make the situation any better. Corporate policy measures should be austere by design so that austerity measures are not warranted.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">When you borrow either via the debt or equity route, the responsibilities are greater. Any country or corporate that does not have a repayment schedule in mind as well as a methodology to do that is plain irresponsible.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"><strong>5) Imprudence is also globalized.</strong></span></div>
<div style="text-align: justify;">
<strong><span style="font-family: Verdana;"></span></strong> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Gone are the days where a country's economy was insulated and did not impinge the economy of the other. In a globalized economy, the smallest of financial imprudence or misfeasance has a cascading effect. </span><span style="font-family: Verdana;">The bourses outside of the European Union are also impacted. </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">The sub prime crisis brought out a very interesting facet of the banking mechanism - I have a loan but do not really know who the lender is. The IMF and European Banking System are the first in the list that would go after Greece but where did they in turn borrow the money to fund Greece in first place is the key question - This is where the Asian, US and other economies are impacted.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Just as banks have their Know Your Customer (KYC) norms, corporates should have instill a parallel Know your Lender norms - a transparent process where the Board is aware the quality of the lender and the money, how integrated they are with the business and how much is their desire to facilitate growth - These are key parameters in mitigating the risk associated with raising and utilizing funds. </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Another key aspect is for corporates to learn from the peers in the same vertical. Repeating a mistake that caused a loss to a peer is unpardonable as it just means that the company is so obsessed with itself that it ignored something that the competition burnt its fingers with. </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"><strong>6)</strong> <strong>Then there is the stakeholder - who generally finishes last.</strong></span></div>
<div style="text-align: justify;">
<strong><span style="font-family: Verdana;"></span></strong> </div>
<div style="text-align: justify;">
<span style="font-family: Verdana;">Greece forbade its citizens from withdrawing more that €60/day initially and in a sweeping stroke then shut shop of its banking system for 6 days. So the stakeholders, in this case the citizens are bearing the brunt of fiscal and economic stupidity of the country's leaders. And at the end of the day - who's money it is anyway - the people's.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana;"></span> </div>
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<span style="font-family: Verdana;">Corporates on the other hand, when they choose to resort to similar tactics, generally lose its customers, the confidence of its investors and shareholders and has a far reaching impact of its very existence. Corporates in these instances literally get away with murder and the stakeholders are left holding a bag - all because they chose to back the organization that they believed was destined for greater glory.</span></div>
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<span style="font-family: Verdana;">These situations are best avoided by adopting a combination of prudent policies, transparency, proper governance and fair fiscal and financial practices. In summation there is no substitute for common sense - <em>Well at least there is no app for that as of now.</em></span></div>
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Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.com0tag:blogger.com,1999:blog-5190412417779681292.post-16737822889600941442015-06-08T16:22:00.002-07:002015-06-08T16:25:21.923-07:00Hire that finance guy...Now.<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHGTY-rKjhd3KqBd_YObKI-rvTzeYku5a00bgN0V1monYA4B8PgaYihFXN_AdJRfWfdAPyNOzP0MBGwbPTjW7PeFskWtQ_HK2bDpmS98gONMJBQe3-oH7UDPIKTHXCix6gUMPExUZaMrQ/s1600/financial+information+center-1024x350.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="135" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHGTY-rKjhd3KqBd_YObKI-rvTzeYku5a00bgN0V1monYA4B8PgaYihFXN_AdJRfWfdAPyNOzP0MBGwbPTjW7PeFskWtQ_HK2bDpmS98gONMJBQe3-oH7UDPIKTHXCix6gUMPExUZaMrQ/s400/financial+information+center-1024x350.jpg" width="400" /></a></div>
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<span style="font-family: Verdana, sans-serif;">It is but natural that any startup or early stage organization wants to conserve cash, minimize spend and tread the path of extreme frugality at least till the time they are bootstrapped.</span></div>
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<span style="font-family: Verdana;">A typical founder group would, in addition to product development, customer acquisition and service delivery, generally tend to distribute and carry amongst themselves the additional load of operations and finance functions. While the move could be thrifty it may not necessarily be a smart and effective use of the leadership team's even more scarce resource - Time. </span></div>
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<span style="font-family: Verdana;">More the time that the leadership team spends on managing the so called "non-core" activities, the greater is their distraction from achieving the goals of the organization on committed timelines. Such distractions are not only a thief of time but in a world of extreme competitiveness may impinge the very existence of the organization.</span></div>
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<span style="font-family: Verdana;">It is always better to leave the work to the experts, however easy it may seem on first glimpse. Would you for a minute, have your CFO do the coding for your new SaaS product? or for that matter have your book keeper oversee your mission critical manufacturing parameters? The same fundamental logic applies for Finance and Operations as well - Leave it to the experts.</span></div>
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<span style="font-family: Verdana;">Most of the off the shelf accounting software comes with a sales pitch that says that it could be used by dummies. Then it is their sales pitch. Probe them with questions around compliance with Revenue recognition, Accounting Standards, IFRS and other associated finance and accounting promulgations and requirements and that is when you will realize that you will need more than a dummy to meet these requirements. I am not for a minute stating these cant be learnt but why not focus on your strengths rather than dilute your precious time away from the significant.</span><br />
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<span style="font-family: Verdana;">Then we also have yet another group of entrepreneurs that have abjectly no or very less superintendence over the financial numbers. This is the other end of the spectrum and is an extremely scary and risky proposition. A panacea to this would be set up a monthly review process of financials and operations and understand the financials, the burn rate and how much is left in the tank. Understandably it will not be a quick process to learn but when guided by a finance professional there is a sense of assurance. <em>Measure</em>- should always be the mantra.</span><br />
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<span style="font-family: Verdana;">When the time comes for an external investment arises both these groups are left grappling with either an incorrect set of financials or with no or limited knowledge of what goes on in the financial space. The power to negotiate a better deal with the investor communities is lost as a result of this tardiness.</span><br />
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<span style="font-family: Verdana;">Oftentimes, I am confronted with the question - When do I hire that rock star CFO? My answer is always simple - <em>Not Now. You will know when. But hire that finance guy...Now</em>. </span><br />
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<span style="font-family: Verdana;">Your finance team just like any other team in the organization grows by need and there will come a time when you would need that rock star CFO to interpret and articulate your thoughts, ideas, developments, aspirations and goals into financial terms and relay the same to the investor community and stakeholders.</span><br />
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<span style="font-family: Verdana;">Till you attain that stature - That finance guy will keep your financial statements in order, squeeze the maximum out of every dollar, will be on top of all the compliance requirements and ensure that the organization is not subject more financial burdens by way of penalties etc. In summation, there will be someone competent in your team that will watch over your finances while you build that thing that is going to change the world.</span><br />
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<span style="font-family: Verdana;"><em><span style="font-size: x-small;">Looking for someone to steer your ship. Drop us a line at <a href="mailto:info@sp-cag.com">info@sp-cag.com</a> </span></em></span><br />
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Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.com0tag:blogger.com,1999:blog-5190412417779681292.post-68722434181483365092015-04-11T08:56:00.000-07:002015-04-11T09:10:27.399-07:00Why implementation is more important than strategy itself<div style="text-align: justify;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgiJiEFf_ABRB6jMd1F98cKi5ue_cpWgGdBclOHGE-CIO_ecGdmUwPSK3iN1PbDq7ulkr7jLdwDlZsaEx6WD56sBR5shP4Vg6Eh1Km16htuZJTG8JGC4RHu6srVn2AP-yGR5uh_EaI65YA/s1600/Bowling.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgiJiEFf_ABRB6jMd1F98cKi5ue_cpWgGdBclOHGE-CIO_ecGdmUwPSK3iN1PbDq7ulkr7jLdwDlZsaEx6WD56sBR5shP4Vg6Eh1Km16htuZJTG8JGC4RHu6srVn2AP-yGR5uh_EaI65YA/s1600/Bowling.png" height="267" width="400" /></a></div>
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<span style="font-family: Verdana, sans-serif;">Companies in the present day expend, both monetary and non- monetary, resources in development of corporate strategy. Most corporates believe that the strategy document/ dossier is the panacea for all its challenges and view it as be all and end of all of everything.</span></div>
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<span style="font-family: Verdana, sans-serif;">While development of a corporate strategy vision document can never be understated, it is imperative that strategy encompasses the virtue of implementation. There are no “one size fits all” or “cookie cutter” approaches when it comes to strategy. The paucity of time and in some cases lack of clarity forces organizations to adopt a strategy based on someone else’ experience than what is relevant or appropriate for them. A wrong choice of strategy and messier implementation results in precious/scarce resources of the organization being deployed in unfruitful forays.</span></div>
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<span style="font-family: Verdana, sans-serif;">Organizations should pick a strategy that is realistic, practical and best suits their way ahead. It could be a revenue goal, a product development/service offering goal, a profitability goal or a sustenance goal. The next step is to assimilate and build ways and means to achieve these goals. This is where the process of clear goal setting, implementation and measurement of results comes into play.</span></div>
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<span style="font-family: Verdana, sans-serif;">Goal setting process, which in more ways than one is the start of the implementation phase, has to involve all relevant stakeholders as they need to be aware as to how the end purpose will be achieved from the start. Often times, too little or only sketchy information about the ways to the means is shared which results in lack of clarity about the approach to the goal.</span></div>
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<span style="font-family: Verdana, sans-serif;">The essence of a good implementation is clarity of purpose, optimum utilization of both monetary and no-monetary resources, clearly defined timelines, yardstick for measuring performance and finally a clear feedback mechanism. Many a good strategy have not borne desired results as it gets lost in translation of purpose.</span></div>
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<span style="font-family: Verdana, sans-serif;">For an implementation to be effective there are certain elements that are non-negotiable:</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>People</em></strong> – Both internal and external should be judiciously chosen and roles defined.</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Simple & Straightforward</em></strong> – The implementation process must pass the test of basic understanding. Jargons never get things done as much as plain speak does.</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Resources</em></strong> – Apt allocation of monetary and non-monetary resources</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Time</em> </strong>– Adherence to SLA’s and pre-defined timelines are a very critical component</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Measure</em></strong> – A maniacal focus on measuring outcomes, results, hits/misses etc., so that appropriate course corrections can be made immediately.</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Leader/Champion</em></strong> – Not necessarily the top honcho but someone who has the ability to make it happen and work with diverse team members. Many organizations make the mistake of identifying the leader first and then the aforementioned. A “horses for courses” approach works best for getting the best results.</span></div>
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<span style="font-family: Verdana, sans-serif;">For an implementation to be successful, it has to be a democratic process wherein feedback, questions, criticisms etc. are to be viewed in the larger interest of the strategy to be executed rather than it being based on the management position of someone who is offering the feedback or opinion is occupying. In most organizations this is a key issue when it comes to deployment or implementation of strategy. </span></div>
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<span style="font-family: Verdana, sans-serif;">In conclusion, any great strategy on paper is as good as how well it was finally implemented and executed. Strategies are but intentions that definitely do matter but its proper implementation that makes all the difference between effectiveness or the lack of it.</span></div>
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<span style="font-family: Verdana, sans-serif; font-size: x-small;"><em><a href="http://www.sp-cag.com/" target="_blank">Want to know more about us?</a> </em></span><br />
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Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.com0tag:blogger.com,1999:blog-5190412417779681292.post-21705493814742020712015-04-09T11:36:00.000-07:002015-04-09T12:10:13.732-07:00What is your organizations' risk appetite?<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpJb02rJEBotsis0PNlp8S4LNUXTVcy7W3jkMA6km-ImWpet1Rc_NbTBJqyowKexLoMfH-d4b4KZbNtEvqKAttAelmeRvMb9E-YzIoDTxLxepQtybktbqwNl7BpYhQ7WC2BJIbVbySIR0/s1600/437-397-2013-skydivers-home04%5B1%5D.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpJb02rJEBotsis0PNlp8S4LNUXTVcy7W3jkMA6km-ImWpet1Rc_NbTBJqyowKexLoMfH-d4b4KZbNtEvqKAttAelmeRvMb9E-YzIoDTxLxepQtybktbqwNl7BpYhQ7WC2BJIbVbySIR0/s1600/437-397-2013-skydivers-home04%5B1%5D.jpg" height="260" width="400" /></a></div>
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<span style="font-family: Verdana, sans-serif;"><em>How calculated are risks?</em></span><br />
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<span style="font-family: Verdana, sans-serif;">Calculated risks are an oft repeated term that organizations resort to in day to day operations and business. But how calculated are these risks and what is the risk appetite of the organization?</span></div>
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<span style="font-family: Verdana, sans-serif;">Risk, by itself, in more ways than one is generally perceived with a negative connotation. In order to understand the gamut of risk from a business perspective it is essential to demystify "business risks" from those risks that a business exposes itself due to inaction or ignoring the obvious. </span></div>
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<span style="font-family: Verdana, sans-serif;">Risk appetite, when properly articulated, is both a measure of identifying and mitigating risks as well as enhancing the overall organization's performance and competencies.</span></div>
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<span style="font-family: Verdana, sans-serif;">In summation, risk appetite may be defined as extent or quantum of risk an organization is willing to undertake in pursuit of its strategic goals. There is no "one size - fits all" when it comes to risk appetite and as a rule is "tailored to suit".</span></div>
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<strong><span style="font-family: Verdana, sans-serif;">Tenets of risk appetite :</span></strong></div>
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<span style="font-family: Verdana, sans-serif;">The organization, in general, has to go through the following steps in sequence :</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Define Strategic goals/objectives</em></strong> - What will the organization go after - Revenue growth, Profitability, Return on Investment, Geographical expansion etc. This is most crucial step in determining the risk appetite of the organization.</span></div>
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<span style="font-family: Verdana, sans-serif;"><em><strong>What is the ask?</strong>-</em> How the organization needs to recalibrate and reposition itself from a risk taking ability standpoint by utilizing both its monetary and non-monetary resources for attaining the objectives. .</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Risk thresholds & tolerance</em></strong> - It is of prime importance that the organization evaluates and determines its risk threshold and tolerance. An ill designed threshold could result in more damage than benefit. Organizations have lost it all when they did not know when or where to stop.</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Effective communication</em> </strong>- It is not enough if a risk appetite document is created and circulated with the Board. For it to be percolated and implemented in spirit, the do's and dont's, the thresholds and operational paradigm are clearly articulated across the length and breadth of the organization.</span></div>
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<span style="font-family: Verdana, sans-serif;"><em><strong>Accountability</strong></em> - It is imperative that accountability is the cornerstone for risk taking and risk appetite of an organization as it is likely to expose the company to a path less traversed and hence the business should build appropriate accountability and responsibility metrics in defining its risk appetite.</span></div>
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<span style="font-family: Verdana, sans-serif;"><strong><em>Measure</em></strong> - A sustained review process and mechanism for measurement needs to be instituted for measuring outcomes, results, hits/misses etc., so that appropriate course corrections can be made immediately.</span></div>
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<span style="font-family: Verdana, sans-serif;">In order to harness the benefits of calculated risk to propel the organization in the direction of greater glory, it is essential that corporate behavior and responsibility are consistently reinforced.</span></div>
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<span style="font-family: Verdana, sans-serif;">The corporate environment should foster and encourage the stakeholders to bet on the company to constantly review and increase its risk appetite for the greater good. Greater the risks better the rewards, so long as the risk appetite is clearly defined, deployed and implemented</span>.<br />
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<span style="font-family: Verdana, sans-serif; font-size: x-small;"><em><a href="http://www.sp-cag.com/" target="_blank">Want to know more about us?</a> </em></span></div>
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Anonymoushttp://www.blogger.com/profile/08313864850774172556noreply@blogger.com0