Creating corporate value.

• Author: Madden, Jim
• Position: Manage Your Assets - Entrepreneurial Resources Group

Among the three sources of capital--debt, equity, and cash from operations--cash definitely dominates today as investors and their advisors concentrate on profitability and dividends in the wake of corporate scandals and the burst dot-com bubble. As a result, enterprise performance, especially internal controls, budgeting and capital allocation, tops Wall Street's agenda. Accomplishing these tasks means a greater reliance on partnering, sourcing and offshoring strategies. Companies need more flexible employees and more robust transitional mechanisms to support financial restructurings (mergers, acquisitions, divestitures and down-sizings). Just what are companies doing to manage the increased speed and volatility neccesary to improve corporate value?

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Contact: jim.madden@exult.net

Jamie Bedard

President and CEO

Aberdeen Group, Inc.

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Increasing corporate value--the key might just be outside your firm.

We get paid to examine other companies through primary research: the bright spots and warts, too. Some of the better practices we notice, we even bring back to use ourselves. Lately, we outsource more and more functions, including primary research. Like your firm, we face:

* Rapidly changing and newer types of competition, with lower barriers to entry.

* Huge pressure to speed up the ways our processes and workforce react to the market.

* Structural pressures (e.g., global consolidation, mergers, etc.) originating from global players within and external to our industry.

We see senior executives at our global 5000 clients aggressively opting for more scalable, transformative and agile solutions. These firms cannot wait on internal resources to re-engineer, re-architect and re-implement new solutions whenever the business changes. This isn't an option anymore.

We are entering a new era of operational excellence. It's one where a firm's processes will be judged on their ability to deliver value immediately across the entire network of business relationships. A firm's ability to provide differentiated process efficiency--and hence, additive cash from operations--to partners will directly impact the overall corporate value of the firm in a profound way. We are past the point where anyone cares if a process is owned in-house or rests with a key partner. Results are what matter, and they must be fast, scalable and transformational. We've seen the world shrink from a logistics and communication perspective...