Introduction: Finance's Info Tech Revolution
Downsizing. Cost-cutting. Restructuring. Over the past decade, U.S. corporations have been striving to become lean and mean.
But that's the easy part. Companies are coming to realize that the toughest challenge is spurring growth. To that end, many executives, especially chief financial officers, are tapping a revolutionary set of new financial information technologies. These new technologies permit a company not only to streamline financial operations but also to exploit huge unused resources of information to attract new customers and sell more to existing customers. Says Harvard business school professor Jeffrey Rayport: "The companies that are leading have cost-compression on autopilot. The real potential is to deepen and augment customer relationships."
The tech revolution is now moving into cyberspace: corporate-finance deals on the World Wide Web for such high-powered issuers as General Motors Finance Corp., "virtual" financial statements permitting instantaneous updating of a company's financial status, and "data visualization," which allows a CFO to "fly" over a 3-D computer landscape to calculate the best trade-off among risk, return, and liquidity.
For the unsophisticated, of course, these tools can turn out to be minefields, not magic bullets. But for the savvy executive, they can confer a powerful competitive edge.