CFO, The Magazine for Senior Financial Executives articles from June 2005

CFO, The Magazine for Senior Financial Executives archives from June 2005

What you don't know about the bankruptcy law.(TURNAROUNDS)
June 1, 2005... It's not just about individuals. Largely overlooked provisions require companies to make quicker decisions on leases, pony up more upfront cash, and shed some of their exclusive right to file reorganization plans. Senior editor Marie Leone...

Go ask your dad.(from the editor)(Editorial)
June 1, 2005... IN 20 YEARS OF CLOSELY WATCHING BUSINESSES large and small, I've come to the conclusion that while there's no certain recipe for success, the formula for failure is crystal clear. Step 1: Go public before you are really ready. Step 2:...

Stayin' alive.(letters to the editor)(Letter to the Editor)
June 1, 2005... A PROPOS OF YOUR COVER STORY ON dying industries ("The Turning Point," April), when was the last time you saw someone smoking a pipe? It was probably 1964. "My Three Sons" was a big TV hit, and Fred MacMurray smoked a pipe on the show. The U.S....

Mercy, mercy.(letters to the editor)(Letter to the Editor)
June 1, 2005... A SIMPLE ANALYSIS OF "WHo PLAYED Ball," the table that accompanied 'The Limits of Mercy" (April), could help show just how much mercy the Securities and Exchange Commission has shown. Using an odds-ratio analysis, firms that decided not to...

The waiting game.(letters to the editor)(Letter to the Editor)
June 1, 2005... WHILE I AGREE WITH THE INTENT of companies to make 401(k) enrollment the default choice for employees ("Make It Automatic," April), I'm not sure it is always in the employees' best interest. There might be a time when an employee does not wish...

Human touch.(letters to the editor)(Letter to the Editor)
June 1, 2005... I ENJOYED YOUR ARTICLE ON KNOWLEDGE management, "A Human Inventory" (April), and generally I agree with it. For instance, I agree that organizations need to make an inventory of their people's capabilities, and that they need to understand what...

Rocky mountain high.(letters to the editor)(Letter to the Editor)
June 1, 2005... THE SIDEBAR IN YOUR FEBRUARY article "Big City Blues" ("Suburban Blight") reported on the problems the city of Lakewood, Colorado, was facing due to budget issues attributed to the state's tax-spending lid, the Taxpayer's Bill of Rights...

Corrections.(Correction Notice)
June 1, 2005... In our May article "New Holes for Hackers," we misidentified the company that produces an application called Sanctuary. It is actually a product from SecureWave. In the April news story "The Danger of Deferrals," we stated that under the...

FX effect.(foreign exchange )(Brief Article)
June 1, 2005... Companies looking to hedge against the falling dollar are finding the currency markets a little crowded these days, During the past 12 months, mediocre performances by stocks and bonds have pushed financial institutions, hedge funds, and...

Gillette deal gets nicked.(M&A)
June 1, 2005... GILLETTE CORP. MARKETS ITS SHAVING PRODUCTS AS "THE best a man can get," but is its planned sale to consumer-products giant Procter & Gamble the best deal it can get? Regulators in Gillette's home state of Massachusetts don't think so. ...

Reeling in outsourcing deals.(Services)
June 1, 2005... EVEN AS OUTSOURCING TURNED INTO a dirty word, plenty of finance executives still viewed it as a necessary evil. More recently, some of them have begun to view it as just plain evil. At least that's the conclusion of a survey released in...

Going for broke.(BANKRUPTCY)
June 1, 2005... Think the Bankruptcy Act of 2005, passed in April, was aimed solely at individual consumers? Think again. Major provisions in the act affect Chapter 11 business bankruptcies, and "some of them are profound," says Jack Williams, a law professor...

Take my job ... please!(Careers)
June 1, 2005... FORGET THE SEVEN-YEAR ITCH. MOST finance executives feel the urge to part ways with their employers before even three years are up. The average tenure of the CFO, according to executive-services firm Tatum Partners, hovers between 30 and 36...

U.S. Treasury going long again?(DEBT)
June 1, 2005... Thirty-year Treasury bonds could be making a comeback. That should be good news for corporate debt issuers, since their bonds generally compete with the Treasury Department's 10-year notes, which would be used less frequently. In May,...

Lawyers, nuns, and money.(Governance)
June 1, 2005... COMPANIES HAVE BEEN BESIEGED BY SHARE holder activist campaigns that press businesses to be more transparent about their political contributions. The campaigns, which often put managers in ' an uncomfortable spotlight, are starting to have an...

New theory, same practice.(Law)
June 1, 2005... WHEN THE U.S. SUPREME COURT ruled in March that disparate-impact theory applies to cases of age discrimination, it made it easier for older workers to file claims against employers. Such workers no longer need to prove that their companies...

America's next top model.(STOCK OPTIONS )
June 1, 2005... Now that expensing stock options is inevitable, companies are getting to work on valuing them. But choosing the right valuation model can be tricky. The Securities and Exchange Commission's April postponement of its compliance deadline for...

Version therapy: why a growing number of business managers are just saying no to software upgrades.(techwatch)
June 1, 2005... FINANCE CHIEFS KNOW THE DRILL WELL. A SALES man for a software vendor, eager to convince a CFO to OK an upgrade to the vendor's latest release, puts on a full-court press. The calls are endless, the promises grandiose. But the salesman's...

Windows-watching: the not-so-sweet lowdown on past--and future--releases of Microsoft's ubiquitous operating system.(techwatch)(Illustration)
June 1, 2005... Windows-watching The not-so-sweet lowdown on past--and future--releases of Microsoft's ubiquitous operating system. ENHANCEMENTS 1998: WINDOWS 98 REASON: Windows 95 was too Easier Web...

Holding out for a lower bid: as the fight for MCI shows, a top-dollar offer for a company doesn't always win. Sometimes it shouldn't.(new deals)
June 1, 2005... IT HAS THE RING OF A MERGER-AND-ACQUISITION truism: the sale goes to the highest bidder. But as some recent deals suggest, in reality a lower bidder may well prevail. ([paragraph]) In 2005's most-watched M&A contest, MCI Corp. repeatedly...

Infinite risk? The abuse of finite insurance uncovered at AIG and other insurers may be just the tip of the iceberg.(SPOTLIGHT: insurance)
June 1, 2005... WHAT DO MANY CORPORATE BUYERS OF INSURANCE have in common with American International Group? Perhaps more than they would like to admit. Like AIG, many companies in the past few years have bought finite insurance, which transfers a prescribed...

Kremed! The rise and fall of Krispy Kreme is a cautionary tale of ambition, greed, and inexperience.(Krispy Kreme Doughnuts Inc.)(Company Profile)
June 1, 2005... What could be more perfect than a Krispy Kreme doughnut? Hot from the fryer and loaded with sugar, the Original Glazed is practically irresistible. For a time, Krispy Kreme's stock seemed irresistible, too. When the company went public in April...

Keeping secrets: how five CFOs cooked the books at healthsouth.
June 1, 2005... IT COULD BE AN EPISODE OF "THE SOPRANOS." As revenues at $2.4 billion HealthSouth Corp. begin to falter, CEO Richard Scrushy, in the role of Tony Soprano, browbeats "the family" a group of top lieutenants including five CFOs, into falsifying a...

Prescription for malaise? Providers are rushing to participate in Medicare's new drug-benefit program. Companies are proceeding with caution.(RETIREE BENEFITS)
June 1, 2005... BLAME UNCLE SAM FOR the latest anxiety overwhelming the healthcare sector. For the better part of a year, health insurers and pharmacy benefit managers have been preparing bids to provide prescription drugs to the nation's 43 million seniors....

Expense management: driving savings through better information and spending policies.(New from CFO Research Services)(Brief Article)
June 1, 2005... Best practices for midsize companies With the economy growing at only a moderate pace, midsize companies are under continuous pressure to boost profits. One way to meet this challenge? Aggressive management of indirect expenses. In an...

The president's man: former Bush economic adviser Greg Mankiw interpreted the indicators for the President. Now he explains the President's policies to CFO.(A CFO INTERVIEW)(Interview)
June 1, 2005... EVER SINCE N. GREGORY MANKIW RESIGNED FROM THE Council of Economic Advisers (CEA) in February, there have been some indications that the U.S. economy is headed for a rocky stretch. First-quarter gross domestic product grew only 3.1 percent--the...

Go direct, young man: despite the headaches, more companies are turning to do-it-yourself sourcing.(supply chain)
June 1, 2005... GENERALLY SPEAKING, OFFICE-SUPPLY retailer Staples is not known for selling its own merchandise. Instead, the company has built a nice business selling such well-known brands as 3M, Avery, and Panasonic. So what are managers at the $14.4...

CFO internet address directory.(supply chain)
June 1, 2005... Ace Group www.acelimited.com ADA www.ada.org/DRPLAN American Express corp.americanexpress.com/midsize Ariba www.ariba.com/analyze Ariba www.ariba.com/service Best Software www.bestsoftware.com...

How to talk to a hedge fund: (And you must.) Even shortsighted short sellers are too powerful to ignore.(investor relations)
June 1, 2005... LIKE THE DAY TRADERS OF THE LATE 1990s, hedge funds are plaguing investor-relations (IR) departments. Notorious for short selling--and holding stocks for days or even hours, rather than years--most funds are not the type of buy-and-hold...

What Dad did.(selecting a new career )
June 1, 2005... DONNA DE WINTER REMEMBERS VIVIDLY THE FIRST dollar that came into her father's general store. "We held it up and kissed it, and then pinned it to the wall," recalls the CFO of Canadian software firm Geac. [paragraph] It was an important dollar...

Microsoft.(CFOs On The Move)
June 1, 2005... Microsoft has hired a new CFO from outside the software industry, naming Chris Liddell to the top finance job. Liddell replaces longtime CFO John Connors, who joined a venture-capital firm in January.

Cardinal Health.(CFOs On The Move)
June 1, 2005... Cardinal Health continues to revamp its executive suite, adding Jeffrey Henderson as CFO last month. Henderson was formerly president of Eli Lilly Canada and had been corporate controller at the company.

Dow Chemical.(CFOs On The Move)
June 1, 2005... J. Pedro Reinhard will hand over CFO duties at Dow Chemical after 35 years with the company when he turns 60 this year. Alcan finance head Geoffrey Merszei will join Dow to replace him.

El Paso Electric.(CFOs On The Move)
June 1, 2005... El Paso Electric has elevated Scott Wilson to the top finance job from his current position as controller.

Throwing in the towel.(Robert Merritt retires from Outback Steakhouse Inc.)
June 1, 2005... HE'S MAD AS HELL, and he's not going to take it anymore. While many CFOs are feeling frustrated these days, few have expressed it as publicly as Robert Merritt, CFO of Outback Steakhouse Inc., the $3.3 billion restaurant chain. At the end...

Bend it like Leeson.(grapevine)
June 1, 2005... The man who single-handedly brought down Barings Bank has a new job: managing a professional soccer team. Nick Leeson, the derivatives trader who broke Barings in 1995 by losing $1.4 billion on the Singapore stock exchange, will now try his...

Corporate balance sheets: swimming in cash or drowning in excess?
June 1, 2005... The corporate world is awash in liquidity. With the help of strong operating earnings, corporate balance sheets are in terrific shape. Since the end of 1999, the average cash holdings of S&P 500 non-financials has risen from 6% of assets to...

A subject (line) with staying power.(Sarbanes-Oxley Act of 2002)(Brief Article)(Editorial)
June 22, 2005... Of the many ways a business historian might chronicle the last decade in IT, a look at my E-mail in-box would surely rank among the best. Marketing and PR people try hard to maximize that precious on-screen real estate, typically making a case...

Give your name but not your' number.(Letter to the Editor)
June 22, 2005... Kudos for your perspective about [companies] taking responsibility for identity theft ("The New Face of Identity Theft, Spring 2005). It is extremely disconcerting that so many recruiting advertisements require online submission of an...

Pain relief vs. planning.(Letter to the Editor)
June 22, 2005... Regarding your continued coverage of the gains and pains of technology, I would love to see an article on why IT is always reacting when it comes to computing and storage infrastructure. Is the buying of more and more stuff, such as disk, tape,...

Correction.
June 22, 2005... In our buyer's guide to spend-management software ("Where Does the Money Go?" Spring 2005), we incorrectly described Fieldglass Inc. The entry should have read as follows: Fieldglass makes a vendor-neutral, Web-based application suite...

The check is for the E-mail.(spam messages are reported a lot)(Brief Article)
June 22, 2005... Depending on who is defining the market, companies are already spending $4 billion a year on technologies that fight E-mail threats (including viruses, spam, and phishing) or will reach that level within four years. While the numbers from...

Sarbox surprises.(COMPLIANCE)
June 22, 2005... It wasn't supposed to be like this, but IT has emerged as an unexpectedly vexing aspect of Sarbanes-Oxley compliance. According to a recent CFO IT survey, almost all companies reporting weaknesses or deficiencies under Sarbox have found IT to...

Sphere of commitment.(companies' relations with information technology vendors )(Brief Article)
June 22, 2005... Companies want to negotiate good deals with their IT vendors, it's true, but many also say they want to rely on a smaller number of vendors that can act as true business partners. Those two goals are often in conflict, leading to fractured,...

Split decision.(LEADERSHIP)
June 22, 2005... It is the perennial question in IT management: to whom should the CIO report? According to Mark Cecere and Heather Liddell of Forrester Research, the answer is... it depends. At large organizations with large IT budgets, the CIO is more likely...

Major bummer.(Information technology workers' demand and employment forecast)
June 22, 2005... Just when you thought all the IT jobs were moving offshore, along comes Bill Gates to say otherwise. In April, the Microsoft chairman said that a drop in the number of U.S. college students majoring in computer science was bad for his company...

E pluribus unum, eventually.(Oracle Corp. lays out its goals)(Brief Article)
June 22, 2005... With its protracted acquisition of PeopleSoft now a done deal, Oracle has been hitting the road of late, laying out for customers its vision of the future, one in which product lines are maintained in parallel and also merged. That...

The road warrior as travel agent.(E-PROCUREMENT)
June 22, 2005... Business travel, already a $153 billion industry as of 2003 (the last full year for which data is available) continues to rise, and as it does, companies are increasingly looking to technology to help pare costs. In a survey of more than 550...

When taxes aren't, in fact, certain.(IT SPENDING)
June 22, 2005... According to a new study, for all the numbers that companies crunch when deciding when and whether to purchase new technology, there is one area that goes conspicuously unexamined: taxes. More than 70 percent of companies ignore tax...

No room at the Internet.(Information technology executives survey)(Brief Article)
June 22, 2005... You might think that 4 billion of anything is plenty, but you'd be wrong. So say proponents of Internet Version 6, also known as IPv6, the next-generation foundational technology for the Internet, which so far has met with a collective yawn on...

Gauging success: with dashboards, what you see is only part of what you get.(usage of dashboard technology in business)
June 22, 2005... When business-performance dashboards began to appear a few years ago, they were positioned as a way to put key business data into executives' and managers hands, a neat approach to presenting the analysis that business-intelligence (BI)...

Old dogs, new clicks: during the past 10 years, e-commerce has changed dramatically. Is your company keeping up?
June 22, 2005... Part One in a Series EXECUTIVES WHO THINK THAT THE DOT-COM collapse, channel conflict, and consumer fears of identity theft have combined to make E-commerce strategy a low priority should think again. Ten years after Amazon.com and eBay...

Counting more than clicks.(usage and market share of Web-analytics tools)
June 22, 2005... If you build it and they come, how will you know? For as long as companies have been involved in E-commerce, they have been attempting to measure Website traffic and the ultimate business value of an online presence. A class of software known...

Brain gain: advice on hiring he right it consulting firm and getting what you pay for.
June 22, 2005... WHILE IT'S OFTEN ASSERTED THAT THESE ARE QUIET TIMES IN TECHNOLOGY, don't tell that to your CIO. Particularly at larger companies, the list of initiatives is as long as it is complex. Projects can range from overhauling IT infrastructures to...

What's hot.(trends in Information Technology consulting services)(Brief Article)
June 22, 2005... These are good times in IT consulting, as companies look for help with everything from new technologies to new regulations. "We're seeing a lot of work in Sarbanes-Oxley-driven compliance efforts," says Ed Mello. COO of the consulting group at...

Somebody's watching you: spyware has come in from the cold to become corporate America's top security threat.
June 22, 2005... IN TWO YEARS, SPYWARE HAS GONE FROM MERE nuisance to serious concern, catching companies so off guard that many executives today still don't know what exactly spyware is. Think of it as a computer virus that has found a purpose in life. Viruses...

Software as a service: how far can the pay-as-you-go approach take you? Proponents say the road less traveled is about to become jammed.
June 22, 2005... IN WHAT HAS BECOME A TIME-HONORED TRADITION, IT upstarts delight in branding their more-established competitors as dinosaurs. If you're a new hardware company, your machines are faster. Networking? Your gear pushes through vastly more data....

What, where, and how much? New software may help companies understand the true scope and cost of IT infrastructure.(emerging IT)
June 22, 2005... A Chinese proverb holds that to do good work one must first have good tools. Madeleine Fackler readily agrees. "Our whole job in IT is enabling the automation of the business," says the CIO of LifeScan, a unit of Johnson & Johnson that makes...

Supersized ROI: a new metric attempts to provide the ultimate context for technology investments.(information technology management, return on infrastructure employed)
June 22, 2005... When Arinc Inc. makes decisions about technology projects going forward, it begins by looking back. The company, which provides systems-engineering solutions to the airline industry, has developed and started using a new metric: ROIE, or return...

Putting more "E" in T&E: toting up travel-and-entertainment expenses is hardly entertaining, but new technology can help.(E-procurement)
June 22, 2005... As technological endorsements go, "we didn't realize the ROI would be so great" is as good as it gets, particularly when it's coming from a finance person. And that's exactly how Bob Mendence, finance manager for corporate services at Applera,...

Sarbox & IT: how bad can things get?(Sarbanes-Oxley Act's impact on information technology, survey)
June 22, 2005... When we polled readers about the IT implications of current Sarbanes-Oxley requirements, we didn't expect a happy chorus, but we were surprised to uncover so many entrenched problems and misgivings about the regulations, the manner in which...