Enter The Zombies: Cfos Act Now in Preparing For Recovery By Reducing Corporate Costs and Restructuring Your Business If You Want To Survive Zombie Economy Where Cash is King

LONDON, February 9 - PA Consulting Group www.paconsulting.com
(www.paconsulting.com/) launches new book on preparing for recovery
(www.paconsulting.com/introducing-pas-media-site/highlighting-pas-exper tise-in-the-media/articles-quoting-pa-experts/the-times-corporate-recovery-report-08-october-2009/?locale=enby)
reducing corporate costs (www.paconsulting.com/our-experience/reducing-cost-and-improving-transparency-at-rabobank/?locale=en)
and restructuring your business (www.paconsulting.com/industries/winning-at-manufacturing-in-tough-times/manufacturing-strategy/turnaround/?locale=en)
: The zombie economy: leadership in times of uncertainty.

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CFOs must prepare their organisations to live in a world
dominated by powerful forces of half-dead, half-alive zombies. Banks,
governments, consumers and companies are all entities that appear to be
recovering, but are actually only half-alive. CFOs have at least two years
before they can start thinking about business as usual - and even then it
will not be the same business as usual, according to PA Consulting Group's
book 'The zombie economy: leadership in times of uncertainly'.

In the zombie economy, the banks are too weak to support
lending, government finances are too stretched to support expansionary
policies, consumer wealth is too depleted to allow them to consume and
companies are saddled with debt they cannot service. All will have a dramatic
effect right across the corporate landscape.

CFOs must act now to secure the stability and success of their
organisation in the zombie world. They need to prepare for the twin danger of
illiquidity and irrelevance.

    - Illiquidity - despite highly profitable current trading,
    banks nurse huge losses on their balance sheets and cannot provide the
    support that businesses need for growth - or even for survival. In this
    environment, capital ceases to be a commodity and becomes a powerful
    competitive weapon.

    - Irrelevance - businesses whose products and services are aligned
    to the changed needs of consumers and business customers will thrive;
    those still focused on last year's customers will struggle badly. The CFO
    must ensure their organisation has the financial freedom to be responsive
    to the changing zombie world.

How CFOs can position their organisation to be a winner in the
zombie economy

There are four key areas of priority the CFO must address in
the zombie world for preparing for recovery:

    1) Secure liquidity. In the zombie economy cash is king. The
    top priority for any organisation has to be reducing corporate costs,
    save money and improve cash flow. The CFO must drive this awareness
    through to the core of the business.

    2) Manage sourcing. The CFO should be preparing for recovery
    and restructuring your business by driving the sourcing strategy which
    defines how corporate services are structured to optimise in-house shared
    service versus outsourced options. This will ensure the business strategy
    is delivered with the maximum returns at an acceptable risk

    3) Audit the portfolio. The CFO must be restructuring your
    business to identify any baggage within their organisation and stop
    pouring capital into these parts of the business. Even in good times, it
    is inadvisable to allow good parts of a business to cross-subsidise poor
    ones, rather than reducing corporate costs. In bad times it can be fatal.
    Managers must fix the baggage or sell it. This will allow them to exploit
    by the opportunities which will emerge from the upturn.

    4) Focus on information management. While the world moves at
    zombie pace, risk will move faster. Given the volatility and uncertainty
    of the economic environment, effective business intelligence is more
    important than ever in preparing for recovery. It helps a lot if you know
    where your business is, what your markets are doing, what your customers
    think. When restructuring your business, financial leaders need to put in
    place the analysis and information to run the business where downside is
    prevalent to enable reducing corporate costs.

Commenting on the zombie economy, ways of preparing for
recovery, restructuring your business and reducing corporate costs, finance
specialist at PA Consulting Group, Simon Tennant says:

"The zombies will have a profound effect on the corporate
landscape of every sector. Most businesses have much to do in the zombie
world. Leaders should return to the basics of good business and preparing for
recovery - focusing on reducing corporate costs, restructuring your business
and analysing the business portfolios and fixing or disposing of any poor
performing parts of the business.

"Acting now in preparing for recovery and restructuring your
business will free capital for investment in value adding customer
propositions. In the zombie environment, capital ceases to be a commodity and
becomes a powerful competitive weapon. Those who act now in reducing
corporate costs to seize the opportunities will win."

To request a copy of 'The zombie economy: leadership in times
of uncertainty' please visit www.paconsulting.com

Notes to editors

About The zombie economy: leadership in times of uncertainty

The zombie economy: leadership in times of uncertainty is
written by Mark Thomas, head of strategy and marketing at PA Consulting
Group, with contributions from PA sector and function specialists. The book
is based on a detailed analysis of the 2009 half-year results for over 600 US
and UK companies, using data drawn from the Bloomberg database.

Who are the zombies?

We use the term 'zombie' because these individuals and
institutions do not cease to exist, but they do become unable to perform the
functions that we expect of them in supporting growth of the economy: zombie
banks cannot lend as we need; zombie governments whose finances are
stretched, zombie consumers cannot consume and zombie companies who are
saddled with debt that they cannot comfortably service.

The book identifies winners and losers and the likely impact
on industry restructuring, sector by sector. This analysis is based on two
critical factors - the liquidity factor and intrinsic value. The liquidity
factor is a compound index made up of a weighted average of: Acid-test ratio;
Dividend cover; Gearing; Interest cover; with the greatest weight on interest
cover. Intrinsic value is estimated using a simplified (and slightly
conservative) form of the discounted cash-flow model assuming: long-run ROE
equal to the average of the last 5 years' ROE for each company; long-run
growth rate in line with economic growth at 3 per cent nominal; cost of
equity at 10 per cent.

About PA Consulting Group

PA Consulting Group is a leading management and IT consulting
and technology firm. Independent and employee-owned, we operate globally in
more than 30 countries and transform the performance of major organisations
in both the private and public sectors.

From initial idea generation and strategy development through
to detailed implementation, we deliver significant and tangible results. We
have outstanding technology development capability; a unique breadth of
skills from strategy to performance improvement, from HR to IT; and strong
expertise in communications, media and entertainment, defence, energy,
financial services, government and public services, healthcare, international
development, manufacturing, transportation and logistics, and water.

    For further information, please contact:
    Laura Hamblin, PA Consulting Group, on +44(0)-207-333-6191
    Will Gardiner, itpr, on +44-(0)-1932-578-800

For further information, please contact: Laura Hamblin, PA Consulting Group, on +44(0)-207 333 6191, Will Gardiner, itpr, on +44-(0)1932-578-800