Leer from Lorraine Chilvers, CEO, Delaney Consul�ng LLC
The New Year Holds Promise
►As we venture into 2011’s uncharted waters, there are hints of optimism at every turn: investors investing, demonstrable improvement in labor statistics, concerted and steady plans to move the country out of the recession, an increase in M&A transactions, and movement by venture capitalists and private equity funds. With the financial downturn of the past 24 months it’s been so easy to feel overwhelmed by the negativity surrounding our local and regional economies. In this issue of CFOnewsletter, we invite you to expand your view of the financial world with Renee Pinczes’ global perspective on finance in her article about the 8th International Financial Services and IT Outsourcing Cooperation Delegation to China. We also hope you’ll learn a little more about the legal angles of social media in an article from our guest attorney from Smith, Gambrell & Russell LLP. CFOradio’s sponsor SAP Business ByDesign contributes articles that help you better understand the relationship between your company’s IT investment and the overall financial health of your organization. Let’s all make a personal pledge to move forward in 2011, pick up from the recession, and forge many new, positive, and profitable inroads. Have a great year!
LorraineLorraineLorraineLorraine
Renée Pinczes, Delaney Consulting CFO, Joins “8th International Financial Services and IT Outsourcing Cooperation Delegation” to China
►Renée Pinczes, one of the newest CFOs to join the Delaney Consulting team, recently represented Delaney on a two-week trip to China. Ms. Pinczes was among a delegation of over forty executives from an international financial community of scholars, experts, and renowned business leaders, coming together to explore financial
services outsourcing opportunities. [Article continues on page 3...]�
What’s New[s]?
►StockMarketWire.com - News
Federal Bank net profits up… h�p://ow.ly/3OllB
FTSE ends sharply higher… h�p://ow.ly/3Olot
US manufacturing prices at 81.5 from 72.5… h�p://ow.ly/3Olxl
2 CFOradio Recap Louise Fisher, XEROX Corporation Eric Harris, Winn-Dixie Jim Mauck, Miles Properties Mike Tarrant, Georgia Cancer Foundation 3 SMALL BUSINESS Small Business News Workforce News Book of the Month 4-5 WORD FROM OUR SPONSOR Digging Deeper into Cash Flow Thriving in Uncertain Times 6-8 LEGAL PERSPECTIVE Mission Impossible: Protecting Trade Secrets 9 WHAT’S UP TECH? StockMarketWire.com Update
CFOnewsleer PAGE 2 WINTER 2010
PUBLISHED BY DELANEY CONSULTING LLC
FINANCIAL PERSPECTIVES OF TOMORROW
Q&A with Mark White CFO, SAP North America Mark White, Chief Financial Officer of SAP North America, shares his perspective on the role of the CFO in a global corporation that fosters and facilitates the innovative and entrepreneurial spirit of global businesses.
Q&A with Steve Voorhees Executive Vice President, CFO and CAO, ROCKTENN Steve Voorhees, Executive Vice President, CFO and CAO of RockTenn, discusses the
CFO role as both leading the numbers and mentoring the team. One of Steve’s prima-
ry past-times is starting first baseman for Greater Atlanta Braves Men’s Senior Base-
ball, so he has an arsenal of sports analogies, valuable on and off the field.
Q&A with Rebecca Flick Former VP and TREASURER, HOME DEPOT Rebecca Flick, former Vice President and Treasurer of Home Depot, tells why “Cash is king and queen” in today’s economy, and explains how running a business on cash is fundamental to increas-ing shareholder equity.
Q&A with Thornton Howard CFO, ASTRAL BRANDS
Thornton Howard, CFO of Astral Brands, talks about the diversity and challenges of the fi-
nance function for firms dealing with multiple brands. Thornton describes how he has transi-
tioned his experience with large companies like Home Depot and Accenture to the small com-
pany finance function of Astral Brands.
GUEST RECAP: December 2010 Go to www.CFOradio.com to listen to January 2011 guests...
Want to hear January 2011 interviews? Tune into www.CFOradio.com, the only radio show that explores the
passion of today’s CFOs while examining the innermost thoughts of the financial world.
CFOnewsleer PAGE 3 WINTER 2010
Con�nued from cover...
Delegates came from a variety of industries, including finance, insurance, venture capital investment, fund management, IT services, and consulting. Ms. Pinczes and her executive coterie visited more than twenty countries, including Canada, Great Britain, France, Germany, Sweden, Colombia, Australia, India, United Arab Emirates, the Philippines, and various regions in the US. The 8th ‘International Financial Services and IT Outsourcing Cooperation Delegation to China’ trip was organized by Great-Idea Business Resources Co., Ltd., headquartered in Beijing, and included visits with over 400 Chinese government officials and business leaders at business development conferences in Shanghai, Kunshan, Hangzhou, Ningbo, and Beijing. The conferences attendees were welcomed by national, provincial and city government officials, with an awards and recognition ceremony for achievements over the last five years and a discussion on the future development underway in each region of the country to support business development efforts. The core purpose of each summit was to advocate service innovation, and to provide suggestions for promoting the development of China’s financial services outsourcing industry, in order to establish a close, cooperative relationship between executives, service providers, and the Chinese government. The opening ceremonies in China were followed by discussion forums led by local and international business leaders, roundtable discussions, one-to-one project and business matching activities, and visits to commerce zones/office parks designed exclusively for Business Process and Information Technology Outsourcing (BPO/ITO). Key speakers for the summit included Michael Corbett, Chairman of the International Association of Outsourcing Professionals (IAOP - the global, standards-setting organization and advocate for the outsourcing profession); Ian Mullen, Chief Executive of the British Bankers’ Association and former Chairman of the International Banking Federation; Charles Hunting, the CEO of Genpact Asia (formerly GE Capital International Services), one of the largest multinational companies in the outsourcing industry, and Gregor Bailor, an internationally renowned business strategist, IT innovator and philanthropist with numerous awards including one of eWeek’s “Most Influential Persons in Information Technology.” During the summit, Ms. Pinczes’ addressed “The Present and Future of China and the U.S. Outsourcing Industry.” In her
words, “This was one of the most exciting business programs that I have had the privilege to attend. I met and worked with many talented people, and learned so much about outsourcing for the financial services industry beyond our current Indian and Irish partners.” China has invested human and financial capital in its efforts to become the one-stop-shop for outsourcing. Historically, they are known for the outsourcing of manufacturing processes, and more recently engineering and IT outsourcing. However, acknowledging that the future of outsourcing is in information processing and back-office support, they hope to become as well-deployed as India and the Philippines in this sector. Presently, some Indian firms currently outsource to China, because of the infrastructure and resources available. Delegate Michael Corbett commented, “Off-shoring has become all-shoring.” In fact, China’s own explosive growth is creating opportunities for outsourcing firms around the globe. The Chinese domestic market for outsourcing is huge and relatively untapped. Gregor Bailor advised the attendees to “plan to double your company every three years.” While it might be easiest for China to grow business as the low-cost provider, there is more at stake in the financial services industry, such as data sensitivity issues and processing timelines. Michael Corbett cited a study that indicates over half of all innovation will come from outsourcing partners. Despite new investments in office park communities, advanced education, and the Chinese reputation for work dedication, intelligence, and attention to detail, the Chinese still face big challenges in moving up the value chain to become the innovative, creative business partner they strive to be.�
A Good Read Outliers, by Malcolm Gladwell We recommend this latest book by Mal-colm Gladwell. He explains why some people succeed. Does it really have as much to do with luck and opportunities as it does with talent? Find out for yourself. Gladwell is also the author of Blink and The Tipping Point. READ? $$$
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CFOnewsleer PAGE 4 WINTER 2010
►Software-as-a-Service (SaaS) or Cloud-based solutions are viewed by Finance professionals as technologies that can help them accomplish critical goals, which in turn help Finance to improve the ability of their firm to succeed in business. Over 110 Finance professionals from Small and Medium-sized Enterprises (SMEs) told Saugatuck in early 2010 that they see SaaS as a key enabler to meet their future business priorities. They feel that their current financial systems are woefully insufficient in helping them to perform their responsibilities. The Finance organization sees SaaS as increasingly critical to support their evolving business goals, and is investing in SaaS for both point (non-core) financial processes as well as core systems of record. The rapid rise of SaaS for Finance has brought a fast-growing number and range of solutions providers into the marketplace. As a result, Finance professionals face an array of options in an environment where few providers have developed a strong track record to enable informed choices. And after being burned by many enterprise software vendor promises in the 1990s, SME Finance professionals remain cautious and averse to empty technology promises. The effects of bad choices remain as potentially crippling to the Finance organization as ever. Making the wrong choices will change how the Finance organization works, and can severely restrict any Finance organization’s ability to improve its levels of service to the company. Selecting inadequate SaaS solutions (and providers) can also easily raise long-term costs to, and above, the level of traditional solutions. When considering SaaS, take a close look at SAP Business ByDesign. A core component of the SAP on-demand portfolio, Business ByDesign is today’s most complete, fully integrated business management solution delivered on-demand. The solution gives
small to mid-size businesses like yours the benefits of a large-scale business management application - without the same investment. With an intuitive user interface, SAP Business ByDesign delivers the best of SAP on-demand through a suite of robust applications for managing financials, customer relationships, human resources, projects, procurement, and supply chain. And the integrated analytics and flexible reporting options facilitate more confident decision-making. Go at your own pace and implement the entire suite or only the applications you need to address your immediate business requirements. SAP Business ByDesign is affordable, predictable and cost-effective to purchase, easy to deploy and quick to value. SAP experts in world-class data centers manage, monitor and maintain the solution, giving you the benefit of our proven track record as the global leader in business applications. With SAP Business ByDesign, you can focus on what you do best—running a successful business. Read More in the Saugatuck White Paper: http://fm.sap.com/redirect.asp?id=6278
www.CFOnewsleer.com
In Software as a Service: The View from SME Finance
The Best of SAP Software, On Demand
SAP Business ByDesign iTour
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you need now and add others as you grow-next week, next quarter, or next year. With-
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organization as ever.”
CFOnewsleer PAGE 5 WINTER 2010
LEGAL PERSPECTIVE
Social Media:
Pu:ng the Pieces Together By Joyce Klemmer, Partner, Smith Gambrell and Russell, LLP
www.CFOnewsleer.com
►Social media is a generic description of Web-based technologies that allows the creation and exchange of conversations and content. Its growth in the past five years has been nothing less than explosive. There are currently more than 450 online social networking platforms. Some sites, such as LinkedIn, target businesses and business professionals; platforms such as Facebook, Twitter and YouTube are directed toward the general population; while other “community” sites may have a particular focus, such as green living, consumer products, automobiles, social activism, travel or music. Through these online channels and forums, consumers are posting commentary about your company, your products, your customer service and even your personnel. These postings could be good, bad or indifferent, but however you characterize them, you can be sure that someone, somewhere, is reading them. The principal advantage of using social media to promote your business is the ability to inexpensively initiate and maintain real-time conversations with your customers. At the same time, the content you create — if engaging and relevant enough — has the potential to be shared, viewed or read by millions of people. Social media is here to stay and businesses will continue to explore ways of using it to promote themselves. But if you’re thinking that you can simply use your “old” marketing methods in this “new” environment, you need to think again. Nowadays, consumers have far greater control — they decide if, when, how and where they interact with your company or brand. And when it comes to making a purchase decision, consumers will not only reach out to your corporate Web site, Facebook page or blog for information, but also to the rest of the online world for opinions and reviews from other users. With all that in mind, it is important to understand the legal issues facing businesses that embark on a social media
strategy, such as:
• PROTECTING USER NAMES ON SOCIAL NETWORKING SITES
• USER NAME SQUATTING
• TRADEMARK ISSUES
• VANITY URLs
• COPYRIGHT CONCERNS
• PUBLISHER’S LIABILITY ISSUES
• PROTECTING YOUR REPUTATION THE SGR PERSPECTIVE
The legal issues arising in the digital world — trademark infringement, copyright concerns, publishing concerns with respect to print media and the law of advertising — are the same issues businesses have always faced. Basically, anything you couldn’t do before the Internet, you cannot do now. Armed with that knowledge, venture confidently into social media and take advantage of the exciting opportunities it provides. ABOUT THE AUTHOR Joyce Klemmer is a partner in SGR’s Intellectual Property Practice. Joyce focuses on copyright, patent, trade secret and trademark litigation.
LEGAL PERSPECTIVE It’s Ten O’Clock: Do You Know Where Your So>ware Developers Are?
The Hidden Dangers of Open Source So8ware:
How “Free” So8ware Can Hurt Your Business Dana T. Hus�ns - Smith, Gambrell & Russell, LLP
www.CFOnewsleer.com
►Does your company develop software that gives you an edge over your competitors? Is the source code for your software a closely guarded secret that adds to your bottom line? Would you be reluctant to publish your source code on the internet? If the answer to any of these questions is “Yes,” then you should know how open source software can negatively impact your business. Open source software can be defined as any software where the source code is licensed along with the actual functioning program. The source code for a program is the collection of human readable statements that are written and edited by a software developer. Because the source code for open source software is publicly available, a software developer can easily customize the open source software to meet his or her needs. Furthermore, unlike with traditional closed source software, a software developer can easily incorporate one or more open source software components into a larger proprietary codebase. Indeed, websites such as SourceForge.net make it exceedingly easy for developers to access and download open source software components from the internet for free. And because such open source components present a ready-made solution for a given programming task, a software developer can be tempted to utilize the open source component rather than write a new software component from scratch. The use of such open source software components is fraught with danger, however, because the software comes with certain strings attached. Specifically, each and every open source component comes with its own licensing agreement that specifies how the open source component may be used. Some licenses have fairly benign terms such as requiring attribution for the original author of the open source software. Other licenses, however, have terms that can be draconian and can negatively affect an organization’s ability to maintain its own proprietary software as a trade secret. Companies must be cautious that open source software is not “free” and that use of open source software can expose a company to liability for copyright infringement. Because it is so easy for software developers to download open source software
• January 29 – Entrepreneur Training “Fraud Pre-vention and Asset Protection
• February 1 – British American Business Group “Northern Oreland – Atlanta Connections”
• March 12 – Sponsor of American Heart Associa-tion “Heart Ball”
• March 23 – Annual Excellence in Finance and Accounting” Awards Event
• April 26 – FEI “Securities & Exchange Commis-sion Update”
CFOnewsleer PAGE 7 WINTER 2010
A WORD FROM OUR SPONSOR
The SAP® Business ByDesign™ solu�on is a single, integrat-
ed business management solu�on that delivers the best of
SAP so.ware, on demanHd. Designed to get you up and
running quickly and to grow with your company, it offers
the benefits of larger applica�ons without the need for a
costly IT infrastructure. The so>ware enables preconfig-
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Comparing the Total Cost of Ownership of SME On-Premises Business Management Applications and SAP Business ByDesign ►Many on-premises vendors claim that their cost of ownership over an extended period of ownership is lower than the cost of an equivalent cloud service. However, cloud services vendors say the contrary, that if all the costs are taken into account, the cloud service will be cheaper. In order to find out who is right and why, IDC has undertaken this study, in which we examine the cost of ownership of SAP Business ByDesign over a seven-year lifetime and compare it with the cost of ownership of a range of comparable on-premises products. We conclude that, based on a detailed analysis of costs and the assumptions we have made, Business ByDesign will normally have a lower total cost of ownership than the equivalent on-premises system over a seven-year period. The analysis shows that the annual subscription costs of Business ByDesign are substantially higher than the annual maintenance costs of the on-premises system, even when the maintenance costs of the supporting software and hardware systems for the on-premises system are taken into account. However, in every other aspect, the on-premises system is more expensive, and in some cases substantially so, leading to our conclusion that for most user organizations, Business ByDesign will offer the lower total cost of ownership.
One major cost factor that is often left out of comparative cost studies is the cost of performing a major update of the software for the on-premises system. In the seven year period we have used here, this cost is unavoidable in practical terms. In this document, we analyze the lifetime cost of ownership for a typical on-premises SME business management system and compare it to the cost of an equivalent SAP Business ByDesign implementation. We have used a mixture of different vendors' on-premises systems rather than any single vendor's product. Although there are many different business management software products available, which all differ in overall functionality, they all compete closely on price. Read More in the IDC White Paper: http://fm.sap.com/redirect.asp?id=6275
For more information on SAP BusinessByDesign solutions, call 800.872.1727
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The SAP® Business ByDesign™ Solu�on:
Op�mize Your Cash-Flow Management
Nearly every business process involves the flow of cash within your
company and between your company and its external business part-
ners and customers. The SAP BusinessByDesign solu0on integrates the
financial aspects of your business processes, enabling you to gain con-
trol over your cash inflow and ouLlow. You can also use the so8ware
to:
Centrally manage and control your payables and receivables; automate
payment and clearing processes; and valuate payables and receivables
in mul0ple foreign currencies;
Quickly create fax returns using centrally managed corporate data and
report declara0ons-and pay taxes if required; and
Set up expense-and-reimbursement policies; monitor employee ex-
penses; and reimburse approved expenses.
CFOnewsleer PAGE 8 WINTER 2010
Success Story: Skullcandy Customer ►Skullcandy began when founder Rick Alden, sitting on a chairlift wearing head-phones, heard his cell phone ring. Alden took off the headphones, pulled off his gloves, and dug around in his pocket for the phone, all the time thinking, “This is dumb – it can’t be that hard to put two plugs into a pair of headphones.” The com-pany grew rapidly after making that product and then found itself fumbling around again – this time for good, reliable information. That’s when it turned to the SAP® Business ByDesign™ solution. See why Skullcandy – a small but rapidly growing business that makes head-phones and audio-enabled products – chose SAP Business ByDesign to help it get product out the door on time and keep customers happy. Read the entire Skullcandy Customer Success Story at: http://fm.sap.com/redirect.asp?id=6272 �
What is Delaney Consul�ng, LLC?
Financial Execu�ve Services
►Delaney Consulting LLC is a professional executive services firm providing financial expertise to help companies achieve their financial goals. Clients engage Delaney CFOs and Controllers for their specialized financial experience and skill, whether needed on an interim, part-time or per-project basis. Clients also use Delaney's retained placement services to fit the unique needs of companies during any stage of their business lifecycle, whether the company is growing at a rapid rate, seeks to maintain or optimize their stability, or are undergoing challenges. The Delaney Team has worked with Fortune 1000 and privately-held companies in the US and globally, for two decades. Delaney combines financial resources, experience and foresight excellence to help you succeed.
Whether you need one professional one day per week for a year...or a team of ten professionals for a 3-month project, Delaney Consulting can help. The financial professionals at Delaney Consulting are uniquely qualified to bring every client expert attention, relevant skills and experience, and an extraordinary ability to evaluate, analyze, and resolve any financial issue or concern in any stage of the business lifecycle. Through a consulting approach that optimizes leadership, collaboration, and communications. Delaney professionals manage successful results, extend value, and become a trusted, knowledgeable advisor. Delaney’s Thought Leadership programs (DelaneyLearning) include customized training for Fortune 1000 companies; classroom-based training for Entrepreneurs; and educational programs through CFOradio (CFOradio.com) and CFOnewsletter (CFOnewsletter.com).�
