Thursday, August 4, 2011

Do You Have A Cash Culture?




The Great Recession of 2008 caused many companies to focus on cash above all else as sales and profits vanished. However, the 2011 CFO.com survey on working capital highlighted that companies are now sitting on record levels of cash. The implication is that finance executives are paying less attention to cash and focusing on other priorities. While some companies would look at the amount of cash on the balance sheet and feel comfortable, establishing a cash culture is more important than ever.

Why Is A Cash Culture Important?

Cash is an essential component of financing future growth. Inefficient cash management can result in a higher than necessary cost of capital and a reduction in the ROI to shareholders. Breaking apart the cost of capital and looking specifically at debt, having a strong cash position on the balance sheet can result in more options for debt financing. Risk is the biggest factor when determining a company’s cost of capital and having a strong cash position can significantly lower the risk of borrowing and therefore the cost of borrowing.
Turning from ROI to shareholders, The Association of Financial Professionals found that companies are sitting on large amounts of cash as a result of not knowing their cost of capital. The effect of using a higher than necessary cost of capital in capital budgeting can result in companies not accepting projects for growth that they would have accepted using lower cost of capital measures (i.e. a higher cost of capital will result in higher hurdle rates for capital investment projects). Therefore companies are choosing to sit on cash rather than invest it in capital improvement projects. The obvious effect of not taking on strategic projects for firms seeking growth is a lower ROI to shareholders.

Are You Managing Cash Effectively?

Assessing if you have a cash culture begins with an assessment of how effectively you are managing cash today. While there are plenty of quantitative measures available, including macro measures found in the 2011 CFO.com survey on working capital, a proper assessment should include qualitative measures including questions such as:
  • Is the focus of management purely on external financial measures (i.e. those reported analysts) such as sales, profit, and EBITDA?
  • Are divisions measured solely on operating profit rather than cash flows?
  • Is cash forecasting report produced and reviewed routinely? Is the information timely or dated? Is the information complete and accurate? Are actions from the review documented and tracked?
  • Is working capital managed? Similar to cash forecasting, is a working capital report produced and reviewed routinely?
  • How is the role of Treasurer defined? Is it narrowly defined such that the Treasurer is only responsible for the relationships with your bankers?
  • Are an overwhelming majority of funding sources for your business non-cash? Businesses with plentiful non-cash funding sources tend not to have a cash culture.

What Are The Attributes Of A Good Cash Culture?

After you have assessed your current organization, there are specific attributes of a future state that indicate if cash is part of the corporate culture.
  • Your organization should have clear responsibilities for cash performance and delivery at all levels, but in particular for those that manage P&L.
  • A good understanding by senior and departmental management of the cash levers within their business and what the current and historical metrics are against those levers.
  • Clear cash targets for the business and properly cascaded down to individual departments and individuals
  • Timely and regular reporting of cash and working capital performance
  • Regular cash forecasting and re-setting of targets
  • Good operational and financial controls over cash and visibility of when they are not working
  • Cash impact is considered for all key management decisions
  • Management incentive schemes include a significant cash and working capital performance element
  • Management structures which facilitate cash focus, e.g. cash committee

Summary

In summary, managing cash is not simply about a set of quantitative measures. Effective businesses develop a cash culture as part of their corporate culture. Developing the culture starts at the top. Does this sound like the organization you manage? 


Monday, July 25, 2011

What does the U.S. debt ceiling mean for CFOs?


As the U.S. government continues to wrangle of the issue of government overspending and limitation of the imposed debt ceiling, CFOs would be right in asking what does it mean for their organizations. 

The current state of the situation is this: the U.S. Congress has set a debt limit of USD 14.3 trillion.  The U.S. Government for years spent more than it took in tax revenues.  It has done this by issuing debt.  Should an agreement not be reached prior to 2 August, the U.S. Treasury department will have to make some tough choices.  The U.S. Treasury department is legally required to pay certain obligations and Timothy Geithner has stated that a default on U.S. debt is a very real possibility.

What does this mean?  The U.S. generally makes interest payments to its creditors.  Under the scenario where the debt limit is not raised, the U.S. would not make these payments, thereby being in default.  If this happens, the U.S. will have to offer its debt at higher interest rates since buyers will view the U.S. as a riskier investment.  In fact, Moody's, a major credit rating agency, warned that it would lower the credit rating of the U.S. Government if measures were not taken. 

Specific to CFOs, Treasury bills, also known as "T-bills”, are issued by the U.S. Treasury department as one of many ways to raise needed funds to cover the gap described above.  Should the U.S. credit rating be downgraded, T-bills might not be seen as a risk free investment. 

Therefore, as a risk assessment measure, CFOs should be aware of places and processes within their organization where they are currently using the T-bill rate as a risk free rate.  Three potential impact areas are loan covenants, securities/debt structures, and capital budgeting. 

The first action is to review your covenants for loans and debt instruments.  Covenants are specific requirements that protect the lender or buyer of the debt instrument from the seller from increasing their risk profile.  Typical covenants include minimum standards for working capital ratios, liquidity ratios and financial leverage ratios.  While it would be rare for a covenant to be tied to a movement in the T-bill rate, there may be an underlying measure that relies on the T-bill as a comparative element.  For example, if the covenants were written in such a way that compared the rate of a bond to Moody’s risk free rating of Aaa and Moody’s downgraded the U.S. from Aaa to Aa, it may require the issuer of the bond to increase a provision. 

Another area might the capital structure of the company.  60% of corporate treasurers currently hold some amount of U.S. treasury bonds in their corporate portfolios.  As we move closer to 2 August (the default date), finance execs might want to revisit their corporate investment portfolios and shift assets from U.S. treasury bonds to other assets.  While plenty of investments exist in the same asset class as U.S. treasury bonds (such as government bills from Germany), finance execs do not want to be caught off-guard.    

If your capital budgeting process relies on a risk free rate, and you use the short term T-bill rate as your measure of a risk free investment, then what happens in the next few months may be extra important to you.  As stewards of your shareholder’s assets, selecting investments that earn a return for your shareholders is part of your job description.  Further, selecting the right investments requires that you understand what risk is acceptable; the risk free rate you choose as a comparative would be part of that decision.  The Capital Asset Pricing Model (CAPM) is a common tool to determine the appropriate rate of return of an asset.  If you use this model in capital budgeting for investment projects, you may need to determine a new risk-free rate of interest. 

There are several areas within Finance that may be affected by what happens with the U.S. debt ceiling.  Regardless of what Washington does, finance leaders shouldn't be caught off guard.  Is a proactive review in order for your organization?  

Wednesday, June 15, 2011

Why Implement Enterprise Portfolio Management?

Challenges Typically Faced By Enterprises
In the modern age of business, we have seen extraordinary revenue and profit growth across all industries, followed by an exceptional economic decline. Global forces and fluctuating demand have generated volatile markets and placed operations and balance sheets under strain. Coupled with ongoing capital constraints worldwide, it’s essential to optimize investment decisions and lower operating costs to ensure a healthy growth in shareholder value.

As a result, most large firms are seeking growth in foreign markets which place additional demands on how corporate investments are being managed.  Working across multiple time-zones and multiple currencies presents unique challenges and introduces new risks to the enterprise. Having a clear understanding of how corporate investments are performing is paramount.

Specifically for CIOs and IT managers, it wasn’t too long ago that IT was seen as THE enterprise change agent and investment dollars flowed into the organization faster than the Mississippi River.   Due to the Tech Bubble and Credit Implosion, investments in IT budgets have been slashed and IT managers continue to be asked to do more with less.

Why Implement Enterprise Portfolio Management?
With today’s tough economic climate, companies need to find ways to ensure their investments are driving enterprise value, reducing costs and improving operational efficiency. Enterprise portfolio management can help companies make better investment decisions; improve program and asset management; and optimize resource utilization and capacity planning.

Enterprise portfolio management provides a platform and process for prioritizing and selecting these investments that have strong business case justification and analyzing them against available funding and resources. Portfolio performance can be assessed to identify investment gaps and potential problems, like negative cash flow.

Enterprise portfolio management takes its roots from traditional investment portfolio management.   Traditional portfolio management is based on asset allocation models, where a portfolio is viewed as a pie that can be divided according to an individuals goals and risk appetite.   Further, the portfolio can be analyzed according to any number of attributes. These analytical attributes — goals, risk levels, investment type, costs, returns, etc. — also serve as planning categories. For instance, if the set of goals within a financial portfolio are growth, income and capital preservation, then the first decision becomes how much of the overall portfolio to allocate to growth, how much to income, and how much to capital preservation. Only later do decisions come into play as to which financial products in each category to sell, retain or buy. These tactical decisions are much easier to make when constrained by their relatively minor role in the overall asset allocation model. For example, deciding which large capitalization financial services stock to buy is a relatively easy decision to make when such investments as a group comprise a small percentage of the overall portfolio.

Likewise, understanding how and where where your firm should invest is easy once you tie your enterprise portfolio to your enterprise strategy. 

Adoption challenges
So why haven’t all enterprises adopted a portfolio management approach to their capital budgets? 

Internal politics and the business culture are by far the biggest adoption challenges.  When a portfolio management process is put into place, the transparency on business strategy implementation is raised significantly.  It becomes difficult to justify pet projects and to politically manipulate how money is spent.  It also makes it difficult to hide mistakes and brings a level of detail and scrutiny that many senior leaders are uncomfortable with.  This is the reason why implementing a portfolio management process needs to be conducted as a change management exercise.  

Lack of executive sponsorship is another reason.  Organizational resistance and internal criticism is almost guaranteed.  Having an executive sponsor who evangelises the new process will help guard against the “we’ve never done it like this before” mentality.  The executive sponsor and the leadership team is further responsible for being aware of dissenters and non-conformists within the organization.  Do not make the assumption that a new portfolio management framework will magically win these type of people over.  Resistance is inevitable and you will need to continually preach the benefits and value of the new approach.  Tackling the resistance head-on with direct communication is the best approach.

Organizational maturity is another factor to consider as an adoption challenge.  Having mature processes and capabilities for program and project management governance and standards will help to ensure the success of the portfolio management roll-out.  In line with implementing a portfolio management process is the consideration of upgrading the skills of those that will be identifying initiatives that will be fed into the process.  Using the phrase “garbage-in, garbage-out”, if the business cases and financial numbers are not realistic nor backed by sound analysis, the most robust portfolio selection process in the world will be for not. 

Agreement on criteria for identifying and selecting projects within the organization is an important milestone.  Likewise, this can be a barrier to adoption if project teams will not adhere to a standardized, consistent approach.  

Disagreement on the scope and pace of adoption can be a barrier.  From the outset, senior leaders need to be clear on the scope and approach of the roll-out.  Will the roll-out be incremental or “big-bang”?  Will every division need to comply or only certain divisions?  

Summary
Portfolio management is not easy.  The mechanics are easy enough to lay out in a book but there is one key component that complicates the processs: people are involved.  A portfolio is made up of projects; projects are owned by people; people become emotionally attached to their ideas OR they are handed a white elephant by their boss and they don’t know what to do with it.  Because people are involved, getting them to think rationally about what projects make sense for the enterprise and what projects don’t becomes a political minefield.  In order to more easily navigate, portfolio managers need a structured approach that is battlefield tested. 

Monday, June 6, 2011

Conducting a Location Study


There is a growing realization that the days of cheap labour in China are over.  Foxconn recently announced that it was looking to move production to Brazil.  The key drivers being discussed are the rising cost of labour in China and avoidance of import tariff in Brazil.

As more companies consider a move from manufacturing in China to other parts of the world, a key question many will have to answer is where to locate.  The central component for deciding upon a market entry strategy is the location study.  There are several key areas that firms need to consider when deciding upon a location to place its operations.

Talent Pool

Many companies focus entirely on staff costs across locations.  However, there are also risks to mitigate around the employable talent pool as well as skills and language capabilities.  If you are considering locating a finance shared service centre, consider also the level of education and the number of certified accountants in the location.

Business Environment

Is the business environment conducive to doing business?  Does the work force culture/attitude align with your corporate culture?  In some countries, accepting multiple job offers and taking the best one without informing the other firms is the norm.  How stable are the political and social environments? Consider also any government incentives, commercial laws and regulations (e.g. data privacy). Finally consider the maturity of the industry in the candidate country.  For example, India is a mature IT Outsourcing country and likely has less risk than other countries.

Infrastructure and Real Estate

Consider the in-country infrastructure such as telecommunications, transportation, access to networks within country and globally, and utilities.  Determine if commercial real estate rental prices are stable, rising or falling.  What is the availability of commercial space and what is the proximity to residential locations?

Accessibility

Are you considering a hub-city with international and domestic transportation options?  Consider also VISA requirements and how they might be aligned with your home country (e.g. visa’s for US citizens for China are quiet expensive but they are relatively cheap for UK citizens).  Consider time zone differences between your locations. Finally, consider small items like hotel availability and affordability near your planned offices.

Quality Of Life

The intangible quality called “quality of life” may seem to be a low priority but it can be the make-or-break part of the whole site selection planning.  Quality of life factors are important when considering long term sustainability of talent pools.  Factors such as standard and cost of living, social infrastructure, law and order, pollution, natural risk, and essential provisions all play a role.  While they are not as quantitative as real estate rental prices, they do need to be included in the measurement criteria.  For example, what is the rule of law in the target country as it relates to intellectual property?

Summary

A variety of factors exist when deciding where to locate your operations, shared service center or identify your next market.  At the heart of this decision is a location study to determine if the location in question fits into your overall strategy.  By identifying factors above, weighting them, and applying the qualities of the location in question against them, you can determine if the location is right fit for your firm.

Sunday, May 29, 2011

Best Practices In Utilizing Management Consultants



When it comes to engaging a consulting firm for help, client expectations are all over the map.  Some see the consultant as a great change agent who will bring new insights and dramatic results.  Others see a consultant as a threat.  Still others see a consultant as a tool to leverage their agenda, even if that agenda does not align with the companies goals.

Engaging a consultant to help change your organization or solve a business problem, if done right, should bring results faster and ultimately cheaper than if done internally.  Below are some best practices when engaging a consulting firm.

When To Engage A Consultant

There are three board categories of needs to engage a consultant: when you need technical skills, when you need additional manpower, and when you need management skills.  

Technical Skills

Whether it is information technology skills with your SAP implementation or technical accounting skills with the latest FASB pronouncement, consultants are often brought in to fill a specific technical need that your staff doesn’t currently have.  The best scenario is to utilize a consultant for technical knowledge that is needed now but won’t be needed long term or, if needed long term, to help your train your team.  

Additional Manpower

The second instance of bringing in help is when an organization just needs additional manpower.  This model works best for companies that have a short-term need and need to ramp up staffing quickly.  By bringing in temporary help, the company can avoid the overhead associated with bringing new resources on-board and the political baggage that may result from letting those people go when the job is finished.

Management Skills

The third model for bringing on talent is when additional management skills are needed.  This can be in the form of management consultants to help you complete your post-merger integration work or can be to vertically integrate into your organization and to serve as leadership to staff in areas of the organization where you are weak.  Like hiring consulting talent for technical skills and additional manpower, this should be seen as a time-boxed exercise with an end date in mind.

Fee Structures

Several purchasing models are used; which one you pick should depend on the type of assistance you need and the value that the consulting firm will add to your organization.  

Time and Materials

This fee structure is an hourly rate or a daily rate with potential provisions for minimum and maximum number of hours per day.  This works best in a model where there are multiple deliverables, the deliverables are undefined, or you are augmenting existing staff.

Fixed Fee

This fee structure is typically aligned with a well crafted scope for a known deliverable.  The advantage of this fee model is that the buyer knows the costs upfront.  The disadvantage to this model is that without scope modifications, you are locked in to a specific time and deliverable.  This may not be ideal if you want flexibility.  Fixed fee arrangements also work in scenarios where you need the consulting firm to accept a part of the delivery risk. 

Success Fees

This fee structure ties payment for services to financial or other measurable results.  The fees are typically structured as a percentage of cost savings.  This type of fee structure can be a double edged sword; if the cost savings are large, clients can feel that they are being taken advantage of.  Choose a success fee arrangement with caution.  A best practice is to include a success fee as part of the overall fee structure with the rest of the fee structure coming from either fixed fee or T&M.

Other Best Practices

Overcoming Resistance From Staff

Often when bringing in help from the outside, your staff may feel that the consultants are a threat.  Make it clear to your staff why the consultants are there, what their role is and how they will interact with your team.  Assigning a team member to work directly and full-time with the consultant or consulting team helps to overcome any fear your staff might have.  

Agree On Objectives

As you work through the consultant procurement process, it is critical that you, as buyer, and your stakeholders are clear on what objectives you hope to achieve.  Often this is described in the contract with the consulting organization.  Make sure the following are included:
·        The scope of the assignment: what is included and (more importantly) what is not included
·        The benefit you hope to achieve
·        The timing, effort, duration and any other assumption you have
·        Roles and responsibilities, which key staff will be involved and how much of their time will be needed

Set Routine Progress Meetings

Remember that hiring consultants is as much risk and reward to you as it is to them.  You must be engaged throughout the process.  Make sure there are regular progress meetings and that you are fully briefed on the progress against the scope, milestones and deliverables.  As the consultants work toward final deliverables, use progress meetings to ensure that there are no surprises in the final report. 

Summary

Hiring a consultant need not be a painful process for your organization.  If structured in the right way, this can help your company increase shareholder value in a shorter timeframe.  

Wednesday, March 30, 2011

Supercharge Your Finance Team

There are two general schools of thought in developing a high performance team: develop people organically or hire high performers and ‘retire’ the low performers.  According to some sources, hiring can cost from 40% to 150% of an employee’s annual salary.  By far the cheaper of the two options then is to retain your current talent and work to increase their leadership skills.  Below are some high impact and low cost ways to develop the next generation of finance leaders.

Knowledge

Charlie “Tremendous” Jones said “You are the same today that you are going to be in five years from now except for two things: the people with whom you associate and the books you read.”
Grant Cardone, International Sales Training Expert, claims that the average person reads one book per year while the top performing CEOs read 60 books per year.  Books provide the highest ROI when it comes to knowledge.  Therefore, if you want to develop a high performing team, the best thing you can do as a leader is to offer them knowledge by way of books.  My own personal list of “must reads” include:
  • 48 Days to the work you love – Dan Miller
  • QBQ! The Question Behind the Question: Practicing Personal Accountability in Work and in Life by John G. Miller
  • How to Win Friends & Influence People by Dale Carnegie
  • The 7 Habits of Highly Effective People by Stephen R. Covey
  • The Go-Getter: A Story That Tells You How To Be One by Peter Bernard Kyne

If you have a large team, develop a library.  A great place to start is the book list at personalmba.com by Josh Kaufman.  Josh has developed an outstanding list of the best business books available.  Put the library on display where it is easily accessible.  Don’t implement an onerous checkout process as some organizations do.  If books “disappear”, consider that a small price to pay for upgrading your talent level. 

Ask your staff to develop short book summaries and include answers to at least the following questions:
  1. What are the top 10 key concepts from the book?
  2. Are there additional ideas/points the author missed?
  3. How are the author’s ideas applicable to our team?

Finally, find a way to motivate your staff to really push themselves.  Why not announce a competition for who can read 52 books in a single year?  Give away an iPad as a reward.  Nothing motivates like healthy competition. 

Softskills

Aside from an increase in general management knowledge, leaders generally excel at soft skills.  An easy and inexpensive way to develop soft skills within your staff is to introduce them to Toastmasters.  Toastmasters is a non-profit educational organization open to all people ages 18 and above who wish to improve their communication skills.  Members meet once a week for 60 minutes and give planned and impromptu speeches.  Membership is typically in the USD 20 to USD 50 per year range.  As members work their way up through the various levels, there is a sense of accomplishment.  The results are outstanding: increased confidence, communication ability and leadership skills.  Starting a local chapter is easy; all that is needed is a group of dedicated people who are willing to start.  Finding a club is even easier: visit toastmasters.org and search by city. 

Additional Ideas

Vendor demonstration week/brown bag lunch
Set a day or week aside as a one-time event or every month and have a new vendor come in to demo their product.  Put a different employee in charge of this and have them think through questions that need to be ask: how would this product work in our environment?  What are the barriers to implementing this type of product?  What type of efficiency gains would we see if we used this product?  

Write a weekly informal management letter
If you are in a large organization, your team may not get a chance to interact with the leaders directly very often.  If the team is going to be transformed into a high-performing organization, high touch points will be needed.  An informal management letter (weekly or monthly) may provide them insight into how the strategic direction is being implemented.

Plan an informal offsite breakfast
Having formal monthly, quarterly or annual events is great but don’t let those events stand in the way of spending time outside of work with your team members to mentor them.  Breakfast is generally the cheapest meal and breakfast meetings are a great, time-boxed way to begin the day.  

Ask the CEO or a board member to host an informal lunch session
Likewise, having leaders from other parts of the organization spend time with your team is a great way to develop leaders.  Ask the CEO or board member to host an agenda-less lunch session with a few of your staff members. 

Summary

Developing a high performing finance team doesn’t have to be an expensive proposition.  By using high-impact and low-cost ways, you can grow your group and develop the next generation of finance leaders. 


Wednesday, March 2, 2011

Finance Function Performance Management


A good performance management framework should align corporate vision and strategy with business and departmental objectives.  As the global economy rebounds and companies begin to migrate from sustaining strategies to growth strategies, now is a good time for finance leaders to re-evaluate their group strategies and set their future plan.  A key component in this process is linking the group strategy to the performance management function.

Finance Function Strategic Plan

A well thought-out and executed performance management function begins with understanding the strategic plan for the organization as a whole and its impact on the finance function.  While different companies use different frameworks to define their strategy, every strategy addresses the following elements:

Strategic Plan Element
What question does it answer
Vision
Where is the organization going?
Strategy
How do we get there?
Critical Success Factors
What do we need to “do well”
Key Performance Indicators
How do we measure how well we are doing?

For the finance function to have an impact and support the overall company strategy, the finance function needs to have its own vision, strategy, set of critical success factors and key performance indicators.  In developing your key performance indicators, make sure you are balanced between leading and lagging indicators.

Goal Setting

Once the finance function strategy is set, finance function team members need to set their goals against this strategy.  Goal setting at the business area, department or individual level should encompass objectives or measures for results (what actions or outputs need to be produced) and skills/behaviors (how actions are to be performed).

Measures and targets from an effective performance management system should be SMART:
          Specific: easily understood and agreed upon by managers and staff
          Measurable: able to be quantified and updated regularly
          Actionable: within the control of the business area/individual
          Realistic: be achievable
          Time-bound: i.e., within a certain time period

In addition, goals should balance financial and non-financial measures and link the strategic to the operational.

Why do measurement efforts fail?

Peter Drucker said “If you can't measure it, you can't manage it”.  The corollary to that is “You get what you measure”.  In order to develop into a leading finance function, the importance of measurable goals at the group and individual level cannot be over-emphasized.  Of course, there are several reasons why organizations fail to deliver.  These include:
          Lack of alignment with strategic business objectives
          Dependence on lagging, not leading, indicators
          Poor integration with other information (internal and external)
          Heavy reliance on financial measures

Finance Specifics

There are a few areas in the strategic development and goal setting process that are specific to Finance.

Organization

The primary goal for most finance functions at public companies is to align the finance function under the CFO with primary responsibilities being financial statement production and audit support, with secondary responsibilities being financial management support.  The organization should be measured on the drive toward common accounting policies, common accounting processes used across the business, and providing better insight into corporate performance through management reporting.  If not already for global companies, a goal to consolidate the number of support functions to a cost-effective location would be appropriate.  This will help to save costs, improve efficiency, standardize processes, and enforce internal control.

Measurement

Production of accurate and auditable financial statements is key.  The finance function should have goals around driving common data standards through the use of a common chart of accounts and common financial management measures.

Process

Goals here should be to improve operational KPIs in the key functional areas: payroll, accounts payable, billing, accounts receivable, collections, credit, consolidation and reporting, inventory, fixed assets, and treasury.  They key is to develop a list of KPIs specific to each area, review 3-5 year operational data to develop insight into trends and develop initiatives to improve the measures.

Controls

Key measures should exist around the control environment through the annual SOX certification process for public companies.  If warranted, measures around the updating of internal control documentation should be development.  Controls related measures should also include the number of controls automated and the number of controls moved from detective to preventive.

Technology

For most companies, much improvement can be made without the implementation of new technology.  For technology-related projects, formal portfolio and project management measures should be used: # of projects supporting the corporate vision, # of projects on-time and on-budget, etc.  Other measures, in conjunction with the other areas above, can measure the amount of technology-enablement that will occur in the next year: number of A/P invoices accepted electronically and so forth.

 


Thursday, January 13, 2011

4 reasons why CFOs should care about CES


What is CES?

CES is the Consumer Electronics Show.  It is the annual industry event where vendors demonstrate product innovation and announce product launches for consumer technology in the next year.  Just about every electronics manufacturer and related company has a presence at the event.  Even companies like Apple who do not attend the event usually time an announcement to coincide with the event.  It is that big. 
Here are some reasons why you might send one of your finance staff to CES next year.

#1 - BYOT

Bring Your Own Technology (BYOT) is quickly becoming the topic dejour in IT circles just behind cloud computing.  While cloud computing definitely is on your enterprise agenda, you also need to be taking advantage of BYOT. With the advent of smart phones and tablet computers, employees are more wired and mobile than ever.  While the normal mobile model is still a corporate purchase of a BlackBerry and laptop, leading companies are taking advantage of the fact that their employees are purchasing leading edge technology devices and connecting them to their corporate information assets.  While the legal challenges and risks have yet to be sorted out, the financials make sense: the company only pays for a license for the email server.  While monthly connection fees are typically shared, initial device costs are paid for by the employee.  Detailed cost savings studies are just now being developed so it’s still early to say what the hard ROI is.  However, everyone agrees that there are soft ROIs such as employee satisfaction and improved efficiency.
The reason CES is important in light of BYOT is it gives you insight into the mobile platforms that are coming and how these platforms can be used in the finance arena. 

#2 - Millennial Effect

Like it or not, you’re not getting any younger.  The generation entering the corporate finance world right now, the Millennials, have grown up more connected and in-tune with social media than any other generation before.  A key component characterizing this generation from the Baby Boomers is that the Millennials have ubiquitous access to information.  Always on, always connected, and one click from Wikipedia.  The products that are showcased at CES are the key to understanding this generation.  Long term succession planning dictates you understand how to communicate with them on a meaningful level.  Building a solid finance team dictates that you understand how to motivate them (hint: it’s not about dollars). 

#3 – BYOT Part 2

If your enterprise goes down the BYOT path, you need to understand what risks your enterprise faces.  How does BYOT play into your internal controls?  Does your annual audit plan need to adjust for that?  Where does your liability begin/end if your employees are also using these devices for personal and unethical or illegal purposes?  Attending CES will afford you the opportunity to discuss these issues with the vendors and potentially shape product direction as devices move from consumers to the enterprise.

#4 - Industry

Obviously, this goes without saying, but if your industry touches a consumer, CES is an avenue you should consider for future marketing and business development efforts.  Think CES is for electronics companies only?  Tell that to Coke.
 
Luckily, CES occurs every year in Las Vegas so if you missed this year, there is always next year.