Transforming The Profitability Of Any Business

Gary has vast experience in working for the finance sector. At Canon India, he leads the Finance and Taxation, and Legal and Corporate Communication.

Business owners and executives need to take necessary actions to increase the profitability of the company. Keeping the focus enthralled to growing essentials, they can overcome challenges. The most important growth essential is maintaining a balanced sales portfolio. If they invest in different products and reach out to different target consumers, they can successfully mitigate the negative impact on one portfolio. As there is a saying, one should never put all their eggs in one basket for better profit results and cost check.

The second most imperative factor is keeping a healthy cost-structure within the business. For this, the businesses need to reduce the overhead costs so that they can tide through unexpected downturns and take on-time necessary actions. A critical component for maintaining a required cost-structure is preserving growth fueling resources of the working segments and the probable ones. Keeping an eye on the health of the balance sheet regularly for ensuring assets' quality is significant also. Moreover, it is pertinent to monitor the inventory regularly so that there is minimum write-offs in accounts receivable conditions.

Dominant Constraints Holding Back a Company's Growth and Overcoming Those
Businesses face challenges and constraints when they move toward growth and profitability. Timely identification of these challenges can help in minimizing the impacts. Successful companies plan for these challenges well in advance and learn to adapt quickly. One of the dominant constraints that any business can face include saturation of the market, where we see the products are getting more homogenous. With competition businesses getting aggressive on prices and aiming to capture the maximum share, it can create a severe dent in your business. Sometimes, there is a drastic change in the market either with the entry of a new player or a new technology, resulting in a transformation in the consumer behavior. This could also have an impact on the existing portfolio of the businesses resulting in de-growth.

For bringing any transformation, the first quest that any internal stakeholder has is the proper insights

While it is possible for organizations to work the way around these constraints, corrections to financial constraints are often complicated. An integral part overcoming this, lies in the capability of the business to have a clear market proposition. A business can differentiate itself by comparing its propositions with the competitors. The next step to this is strengthening the existing product numbers through extensive research and development. It will enable the companies to disrupt the market. Canon, for instance, is the leader in patent registration and through our investment in R&D we are coming up with best in class technology for our customers across segments.

Role of CFOs ­ Performance Management, Innovation and Market Dynamics
CFOs look at the world from a different prism. Every business they are involved in face rapid changes ­ both internally and externally. There are fewer businesses that are immune to disruption. In times of accelerated business changes, it makes sense for looking into newer opportunities as a business cannot thrive without any change. For bringing any transformation, the first quest that any internal stakeholder has is the proper insights. Through business intelligence tools, they receive on-time required insights having minute details for taking the right decisions. Additionally, a need for keeping master information and electronic workflow systems updated for the business intelligence to work effectively. Alongside, ensuring employees', various business units and the company goals are congruent is crucial. It is also imperative to encourage new ideas amongst the employees.

For CFOs to collaborate more intensively with the operational business counterparts, CFOs need to understand and evaluate the scorecard in-line with the respective operational requirement. It will ensure a concrete finance roadmap for them and a way to allocate budgets reasonably. Evaluating each business unit's performance, the CFOs rely on appropriate benchmarking data. With the available digital tools, finance teams are now empowered with much more easily accessible knowledge to make faster and better decisions. The right data results into a better understanding of the business, seamless collaboration with operations team, and better utilization of the latest technologies. Finance can hold a key role at present as there is a dire need to create a long-term vision to achieve sustainable growth.

Importance of Collaboration to Develop Economy and Function of Finance
This is a fast-paced world where collaboration between developed and emerging economies is essential for upholding the respective skills, innovation, talents, industry best practices, and resources. More exploration is awaiting which is can significantly contribute to the growth of the world economy. The past few decades depict that economies are getting globalized and different economies are specialized in different areas based on their competitive advantage. Collaboration has played the main part in this. At the same time, there are worries in the global supply chain as the chain might get fragile due to the inter-dependency. Any failure in one single economy may end up with a total breakdown of the whole supply chain.

India is on the right track in making business simple given that, the Government of India's staunch belief in the power of 'Collaborate to Create' to achieve the goal of sustainable growth has been working well. The government is partnering with countries across the world which has in return spurred investments across industries. Not just this, it is heartening to see that other countries have also benefitted from India's model of sustainable development, whether in terms of financial inclusion schemes or sanitation programs. India should continue to reform so that foreign companies are not just more confident to trade in India, but also keen on trading with India.

As the world is changing and businesses transforming rapidly, the market gets more dynamic with businesses getting progressively interrelated and finance as a neutral function can promote collaborations within an organization. Today, finance heads are facing an array of new responsibilities, risks, and challenges. From being a partner to business units in giving financial advice, mitigating operational risks, identifying opportunities for their improvement in performance- we are a part and parcel in formulating end to end business strategy for the company.

With the changing dynamics over the past few years, finance has increasingly taken up a larger role within the company, keeping an eye on all the regular and strategic functions. Additionally, the finance department not only drives strategic plans for the company to ensure the growth and sustainability of the organization but also ensures the required transformations are well-phased and executed.

Planning a Successful Budget for a Business
Making budget is vital to set internal and external expectations and provide KPIs for incentives. So as planning for a successful budge, CFOs, and Finance teams should first start with basic assumptions, right from exchanging rate, product roadmap, and estimated purchase costs. Budget must encompass the current situation, for instance, sales and profitability of individual segments, market share, and market developments having positive and negative impacts on the businesses. Finance team should rationalize sales target and cost structure ­ sales targets should be reasonably justified so that resources can be adequately allocated. Culture for open discussion during formulating budget should be encouraged and building a storyline besides. As technology plays a poignant role here, electronic workflow and BI tools will work wonders in making effective implementation of the budget.