Discipline investment planning and forecasting: To ensure tighter controls on cash outflows and to minimize the investment risks, a strict investment policy is necessary. It should take the ­following criteria into consideration:

Often the capital expenditure (CAPEX) budget is a result of top-down decisions based on peer-group target ratios such as CAPEX to revenue. However, there are “competing” projects collected from bottom-up planning that, in sum, tend to exceed the top-down CAPEX budget. As a result, the Chief Finance Officer needs to make sure that the limited capital resources are allocated to those project opportunities with the most appropriate risk-return profile. 

Investment management process should be sufficiently ­flexible enabling to consider and realize new business opportunities which arise during the budget year Investment decision-making should not be a show-stopper when “time-to-market” is a decisive factor. 

Level, purpose and risk of investment must be matched with the responsible decision- makers. The level of decision-making responsibility and its delegation must be optimized to the company’s market position, financial situation and shareholder requests. 

“Internal clients” of the CAPEX Management Process ­(typically Network, Operations, Sales, Marketing) need to have a clear understanding, what, when and to whom they have to provide their CAPEX funding request. Guidelines for investment management should not only be in place, but there should be contacts for the interpretation of the rules. 

Every single investment decision and its status should be ­traceable using a standard asset identification system.  

The investment management process is a part of the overall financial management process and should be linked to procurement, reporting and accounting. Furthermore, it should be in line with the overall company management systems, mission statement, strategic objectives and business plan goals. 

Lead important decision-making: Many Chief Finance Officers are still only seen in a support role when it comes to important decision-making lacking the courage, determination and drive to take a leadership role. However, Chief Finance Officers can do better than that. Since they have the best overview of the business (compared to their peers in the organization) and are ultimately responsible for the financial results, they have a morale obligation to take a leadership role in decision-making, drive other functions for their contributions and make sure that the overall financial targets of the company are met. That does not mean that the Chief Finance Officer should overrule his or her peers. No, the Chief Finance Officer’s role is more one of a coach that assembles the team around the same banner.