Transforming the Finance Organization in the New Decade
“When major economies are constrained, business leaders find their growth engines stuck in low gear. At times like these, financial leaders need to collaborate more closely with their operations counterparts and drive precision in performance management.” From a white paper by Bloomberg Business research Services (BBRS) that conducted a survey in the second half of 2012, http://bit.ly/YjwBgn more than half of finance executives reported that they are turning to advanced forecasting approaches and new tools to help sort through the maze of challenges posed by the current business climate. The resulting white paper provides insights, examples and recommendations on how finance professionals can collaborate effectively with operating managers to boost profit in today’s uncertain economy.
Some key findings from the survey:
- 72% mentioned the importance of increased investment in IT to reduce costs, increase productivity and uncover new revenue opportunities
- 52% are using dedicated analytical tools to enhance financial planning, forecasting and reporting
- 40% expect to speed up decision-making by using real-time reporting rather than batch-processing data
Now if we take this to the next level to make finance a truly active business partner, the best practice for organizations is to undertake a maturity assessment of innovative business partnering and benchmark to use finance in a highly integrated and predictive manner within other processes. Whether it is spend analytics, optimization of inventory carrying costs, capital restructuring or asset investment strategies, finance can play a proactive role in realizing those benefits from a finance transformation.
Incorporating the interactions of social media and events beyond the sight of the business manager on analytics and decision making results in added complexity for which any finance manager needs efficient and robust tools.
It is therefore apparent that the finance organization of the future will no longer be restricted to managing compliance, enforcing controls, and ensuring timely reporting, though these will be baseline standards for efficient financial management. In addition to these core responsibilities, the finance organization, empowered by technology advancements of mobility, analytics, and in-memory processing, will be playing an active role in collaborative decision support in the following capacities:
- Real-time decision making using:
- Advanced predictive analytics
- Mobility solutions
- In-memory processing
- Simulation and scenario analysis
- Visibility to real-time enterprise performance using:
- Virtual close tools
- On-demand dashboards and analytics
- Increased efficiency in operations using a shared services framework
- Leveraging community collaboration utilizing the power of self-sustaining community to enforce financial discipline
- Evolution of new metrics of enterprise performance using human capital financial statements outlining human impact statement and return on human capital investment
For more info, check out the white paper on the “Transforming the Finance Organization in the New Decade” that provides more insights on this topic