“A shareholder is a shareholder,” says Ralph Hromisin, CFO of privately held Benco Dental Co. He was explaining why he keeps a close eye on the requirements put forth by the Sarbanes-Oxley Act, and has actually made changes within his company as a result, even though he’s not required to do so. “Your fundamental obligations don’t change,” he says. Greater accountability, faster and more-accurate reporting, a stronger internal-audit capability: all of the things that public companies must address, nonpublic companies would be wise to address.
As part of his efforts, Hromisin invested in CPM software (see our cover story, “Quantum Loop“). Whether motivated by regulatory pressure, internal performance, or both, finance departments are looking for ways to get a better handle on the numbers and then use them to keep strategy on track. That’s the promise of CPM (corporate performance management), a new (or is it?) class of software that’s targeted squarely at the CFO. By connecting budgeting, planning, forecasting, and analysis more closely (into a “closed-loop” system, as one exec puts it), companies hope to be able to make midcourse corrections more easily, without losing sight of their overall strategy. It’s hard to take issue with the vision of greater vision, although whether the software delivers remains to be seen.
In this issue, we also address vision problems of another sort, namely the difficulty that CFOs and CIOs often have in seeing eye to eye. It’s easy to make too much of this; a certain creative tension is as healthy as it is inevitable. But it can go too far. Now, a number of companies are addressing the situation by making the CFO and the CIO two members of a triumvirate, with the third seat occupied by whichever business-unit head is most affected by a given project. It’s a flexible model that may inspire any number of variations. And maybe even a few pats on the back.