American Express: U.S. CFOs Cite Increasing Value as Key to Company Growth
New Report Highlights Need for Sustained Financial Discipline Among Midsize
Companies In Order to Compete with Larger Peers
NEW YORK -- May 21, 2013
After surviving a turbulent financial downturn and struggling to find growth
opportunities in the aftermath, U.S. companies today are focused on building a
new value-focused framework – one that balances quality and price. Finding
balance between these two is essential for midsize companies, which now face
increasing competitive pressures from larger peers, according to a report
released today by American Express Company (NYSE: AXP), a global leader in
corporate card issuance, and CFO Research.
The report, “A Valuable Turn for Finance,” includes results from a survey of
275 senior finance executives at U.S. companies with annual revenue between $4
million and $2 billion, the majority falling within the midsize category of
$50 million and $1 billion. The survey found that 57 percent of midsize
companies identify their strongest competitors as larger peers. Compared to
midsize companies, these large competitors are able to deliver significant
volumes of goods and services with thinner margins.
“There is now a heightened need for midsize companies to find new ways to
compete with larger competitors whose size provides pricing advantages,” said
Darryl Brown, President, Americas, Global Corporate Payments, American
Express. “Customers demand competitive prices and sustained quality. This
forces companies to extract greater value from suppliers, vendors and their
own organizations through tight fiscal controls in order to drive growth.”
Competing on Value
In order to compete on value and price, financial executives are not only
tasked with getting the most out of suppliers, vendors and their own
organizations, but to do so largely with cash generated through operations.
Survey findings reveal most respondents (81 percent) agree that cash from
ongoing operations (rather than debt or equity financing) is likely to be a
primary source of growth capital over the next two years. Given their often
limited control over payment terms with larger suppliers, vendors and
customers, midsize companies must look for every opportunity to extract
greater value from their supply chain.
Some finance executives are adopting vendor-management tactics common among
larger firms as they look for opportunities to reduce spending through
lower-cost suppliers and vendors. As companies push supply networks to offer
more value per dollar, financial executives surveyed are enforcing strict
management internally too. Most respondents (82 percent) say their companies
are likely to increase their focus on maintaining financial discipline over
the next year.
Improving Financial Fundamentals
Outside of additional cutbacks, respondents say that improving payments
efficiencies and addressing challenges in forecasting and compliance will be
key to achieving an ongoing, value-focused discipline. This new value-driven
mind-set is not without challenges, as 43 percent of respondents report lack
of time, attention and resources as among the greatest obstacles to improving
cost management at their companies, followed by organizational resistance (35
“Midsize companies’ overall business strategies in 2013, are progressively
reflecting a value-oriented mind-set, despite a continued shortage of
available credit and already strict budget controls,” continued Brown.
“Financial leaders are tasked with extracting value at every point through
improved performance internally and in their supply chain. These midsize
companies plan to maintain (and in many cases, ramp up) spending over the next
year as they apply greater scrutiny on the value level achieved in all
transactions and clearer visibility into expenses.”
About the Survey
CFO Research surveyed 275 senior finance executives at companies across a wide
range of industries in the United States. Company revenues ranged from $4
million to $2 billion. The survey program was completed in December 2012.
About American Express Corporate Payment Solutions
American Express Corporate Payment Solutions provides the Corporate Card,
Corporate Purchasing Solutions, and other expense management services to
midsize companies and large corporations worldwide. In the U.S., American
Express is a leading issuer of commercial cards, serving more than 70 percent
of the Fortune 500, as well as tens of thousands of midsize companies. For
more information, visit www.americanexpress.com/corporate.
About American Express
American Express is a global services company, providing customers with access
to products, insights and experiences that enrich lives and build business
success.Learn more at americanexpress.com and connect with us on
linkedin.com/companies/american-express, twitter.com/americanexpress, and
Key links to products and services: charge and credit cards, business credit
cards, travel services, gift cards, prepaid cards, merchant services, business
travel, and corporate card.
About CFO Research
CFO Research is the sponsored research group of CFO Publishing LLC, which
produces CFO magazine, CFO.com, and CFO Conferences. CFO Publishing, a
portfolio company of Seguin Partners, is the leading business-to-business
media brand focused on the information needs of senior finance executives. CFO
Publishing has long-standing relationships with more than 500,000 finance
kwittken + co.
Glorimar Perez, 646-747-0096
Christine Elliott, 212-640-0622
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