The Role Finance Plays in Business Planning Andy Halford CFO by benbenzhou


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									The Role Finance Plays in Business Planning

Andy Halford

CFO, Vodafone

The biggest transition that this business has gone through over the last few years has been
the technology advances that have enabled us to move from offering, largely, two
products—voice and text messaging—to a much, much broader range of services that are
either internet-based, music-based, or video-based.

If I go back to the start of 2000 or thereabouts, we were having to bid for the spectrum to
enable a lot of the new products and we had to do a lot of work within the finance areas
to try to envision the sorts of products, the sorts of take-up, the sort of pricing that we
could get for those products when eventually they came to market. The role that finance
played in getting the business to think about the product set, think about the revenue
streams, think about the technology and the service/support dependencies that would
come with that was critical in helping the business to move forwards.

We have now got a business that is turning over several billion pounds a year of revenue
from products that just did not exist a few years ago. We are now getting over 20% of our
total revenues from products that were not around at that point in time and, frankly, the
whole of the business, the ability to now offer things like internet on the phone, to be able
to get music downloads, to be able to access application stores are all things which just
were not in the market at that point in time. They were nice theories. Now time has
moved on and they are things which we are starting to take for granted. So it has been a
huge period of change.

I think in this particular case that there are a number of lessons for me. One is the role
that we can play to put structure into planning that encourages the business to think more
broadly about the environment it is in, and more particularly, the environment that it
could be getting into in the future. So the whole planning process, if done in an educated
way, is a very powerful driver of broadening the thinking within the business.

The second is that there is a limit to the amount of analysis that one can do and at the end
of the day, intuition does play a reasonable part as well as analysis. For instance, one
could look at lots of individual products and try to work out what the take-up will be but
at the end of the day not every customer is going to buy every single product and one has
to have an intuitive override as to what, collectively, is the art of the possible.

So I think the ability to help the business with it’s thinking by the way we structure
things, but also understanding that, at the end of the day, analysis is not the only answer
to all these questions, were two very big lessons for me that came out of this.

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