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A new report released by IBM, The New Value Integrator, Insights from the Global Chief Financial Officer Study, outlines the best practices of organizations referred to as value integrators, who across every financial metric examined - top and bottom lines, income statement, cash flow and operational efficiency measures - outperform their competition. Why? According to the report, value integrators have recognized the significant financial opportunities associated with data integration and identifying risk throughout the entire organization. According to the report, value integrators understand that insular views of risk are no longer sufficient in an increasingly interconnected world. And recent events like the BP crisis have served to even further heighten their awareness that all forms of risk ultimately have a financial consequence. As Mark Abkowitz, author of the book Operational Risk Management: A Case Study to Effective Planning and Response, recently shared with CFO Magazine, "Finance can lead the creation of a rigorous risk management process that identifies all the hazards that can threaten the enterprise. You can have a low-probability event that can have such dramatic consequences that you can't ignore it. The question is, are you prepared to recognize those events?" According to the report, value integrators express a heightened interest in using technology to further increase data accuracy, streamline information delivery and develop a richer base of information for deeper insights into managing risk. A statement which seems to be substantiated by the latest Duke University/CFO Magazine Global Business Outlook Survey of about 1,100 finance officers of which 75% of survey participants reported plans to spend more in the areas of technology over the next twelve months. While the 1,900 CFOs participating in the IBM survey emphasized the growing importance of building stronger relationships between all segments of their organizations, efforts to do so have often been strained, in large part due to an inability to communicate in a common language. It appears that all that may be changing. In Show Me the Money, we chronicled the development of the asset performance management (APM) program of the Dakota Gasification Company, a journey that began in the boardroom. At the epicenter of the discussion was data and risk - the necessity for the implementation of an asset performance management system capable of integrating all equipment asset data for analysis and identification of the greatest value-added opportunities using a risk/reward method - data integration and risk management - precisely the activities IBM reports continues to widen the gap between the value integrators and the rest of the pack. More than 45 percent of CFOs participating in the IBM study indicated that their Finance organizations are not effective in the areas of strategy, information integration, and risk and opportunity management. Given that the replacement asset value for an organization, public or private, regulated or non-regulated, having a high dependency on physical infrastructure and equipment can easily run in the neighborhood of $3,000,000,000 and that catastrophic equipment failures are linked to loss of human life and environmental concerns, one can only hope that asset performance management, on all levels of the enterprise, is deserving of the CFO's attention. Click here to read What Your Income Statement Won't Tell You. Click here to read Aberdeen Group - Asset Performance Management Aligning the Goals of CFO's and Maintenance Managers. Click here to read Show Me the Money, Dakota Gas Demonstrates Big Savings and Quick Return-on-Investment Using Meridium. Click here to read Improving Asset Performance and Process Safety. Click here to read Balancing Risk Assessments to Improve Safety Decisions.
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