“Coming together is a beginning, staying together is progress and working together is success” said Henry Ford.
Ford revolutionized the automotive industry, but he is also known for his unique labour policies which were underpinned by his notion of teamwork. Ford created a collaborative environment in which innovation was encouraged and individual accountability was paramount.
Over a century later, collaboration is still paramount for business success, in the face of unprecedented change in the nature of business relationships. That’s why we are launching a series of CGMA briefings on redefining the value chain.
Michael Porter’s defines the value chain as the set of activities that an organisation carries out to create value for its customers. Today, the boundaries of value creating activities are becoming extended and blurred as greater reliance is placed on alternative forms of sourcing, and multiple business relationships.
Greater consumer awareness, potential intellectual property rights breaches, changes in patterns of consumption, a growing middle class in emerging markets, governance and risk management issues, urbanisation, maintenance of ethical standards, innovative and disruptive manufacturing techniques all provide the context to significant challenges and opportunities faced by business today when striving to create value through their extended value chain.
CGMA designation holders are ideally placed to play a significant role in the new business environment that we find ourselves in. It requires strategic thinking, and the ability to draw together disparate data sources to provide insight with a future perspective.
Our first briefing identifies two key areas where finance professionals should focus:
- Articulate the value chain – capturing relevant, reliable, complete and timely data and turning it into information and insight that can be used to effective describe the value chain and its interconnections
- Develop a strategic perspective – looking beyond the current value chain to explore the commercial potential of embracing an even wider range of innovative business relationships and new markets
Look out for further briefings that will explore the ethical, governance and risk aspects of an extended value chain as well as how new developments in natural capital accounting can help to enhance supply chain management.