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400-007 · Question #188
400-007 Question #188: Real Exam Question with Answer & Explanation
The correct answer is A: Build a financial control function that delivers high-quality reports on operational expenses for. Establishing a financial control function that produces high-quality reports directly addresses the identified root cause of the CAPEX planning team lacking the data required for due diligence.
Question
An enterprise has identified these causes for inefficient CAPEX spending: - CAPEX planning is driven by technology and not by business objectives. - The CAPEX planning team lacks the data it needs to perform due diligence tasks. - The organizational structure lacks sufficient accountability and incentives. Which corporate cultural change contributes to improving the effectiveness of CAPEX spending?
Options
- ABuild a financial control function that delivers high-quality reports on operational expenses for
- BCxO-level staff must have a full technical understanding but the should not trust their technical
- CAdopt new organizational models that promote real accountability for ROI, not just revenue,
- DMarketing and product management divisions must reduce their CAPEX budgets significantly to
Explanation
Establishing a financial control function that produces high-quality reports directly addresses the identified root cause of the CAPEX planning team lacking the data required for due diligence.
Common mistakes.
- B. Requiring CxO-level staff to hold deep technical knowledge while explicitly not trusting technical staff creates an organizational trust deficit and removes subject-matter expertise from decision-making, which would worsen rather than resolve any of the three identified root causes.
- C. Adopting organizational models for ROI accountability targets the incentive and accountability cause but does not supply the underlying data infrastructure that the planning team needs to perform due diligence, leaving the most operationally critical gap unresolved.
- D. Arbitrarily reducing CAPEX budgets for specific divisions does not address the root causes of poor planning processes, data deficits, or misaligned incentives, and could restrict legitimate investment without any improvement in decision quality.
Concept tested. Corporate cultural change for effective CAPEX governance
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