Finance must excel now, more than ever: with continuous business volatility now a fact of life, the CFO must have a finance organization that can help to drive adaptive decision-making and overall company performance – Advertisement – Brief Article
The current plague of corporate scandals only serves to underscore this point. A finance organization that effectively leverages its financial and operational information can provide powerful strategic decision support to the CEO and business unit partners, meet the new demands for transparency in financial reporting, and ultimately contribute directly to shareholder value.
Unfortunately, the typical CFO has not yet achieved this goal. A recent study by Cap Gemini Ernst & Young and CFO Research Services confirms that while CFOs are actively pursuing transformational changes in their finance functions, they remain concerned about their finance groups’ ability to meet new challenges. CFOs are now under intense pressure to provide more financial transparency and better forecasting accuracy–all at an accelerated pace. But our survey results paint a picture of finance bogged down by financial transaction processing–a problem caused by poor or decentralized processes and a lack of an underlying, integrated technology foundation. CFOs fear that if their finance groups can not excel at these basic financial management tasks, operating managers will revert to the age-old view that finance does not deserve to be treated as a group of value-adding business partners.
“Not so long ago, finance was transaction-oriented and focused only on the basic finance building blocks and related process efficiencies,” says Rich de Moll, Vice President in Cap Gemini Ernst & Young’s Finance and Employee Transformation practice. “Today, CFOs must help their companies to defy the economy by providing executives with insightful financial and operational information to make effective decisions. CFOs need to build CEO and Board support for a transformation blueprint that will enable finance to adapt to meet immediate demands, as well as to prepare for what’s to come.”
Finance Transformation Drives Shareholder Value
CGE&Y believes that the finance transformation blueprint should be focused on driving shareholder value; integrating value metrics and business drivers in financial processes; and leveraging new, integrated financial management tools. At a minimum, the blueprint should include the following actions:
1. Develop a strategy for growth, cost management, and capital allocation based on the linkage between shareholder value and key intangible, financial, and operational drivers.
2. Develop an integrated approach to planning, budgeting, forecasting, reporting, performance analyses and measurement that is based on a financial/operational driver framework, and delivered through a partnering relationship with internal business customers.
3. Develop a comprehensive plan for transforming transaction processing through the use of web-based, collaborative technology; shared services; or process/ application outsourcing.
CGE&Y Finance Transformation Solutions
CGE&Y has three finance transformation service offerings to assist companies in addressing both short-term and longer-term demands.
Value-Creation Model.
This offering focuses on the impact of financial, operational, and intangible drivers on share price. By understanding the causal relationship between drivers and shareholder value, companies can better allocate capital to those initiatives that will have the greatest value-creating impact.
Management Insight.
This offering focuses on the approach that finance needs to take to obtain new and timely insight from corporate financial and operational systems. By integrating the planning, budgeting, forecasting, consolidation, reporting, measurement, and analysis processes through the use of measurement frameworks, linked inputs/outputs, and the latest technologies, finance organizations will be better positioned to focus on the value-added aspects of the processes.
Transaction Transformation.
This offering focuses on the transformation of financial transaction processing across an organization–and collaboratively with customers and suppliers–to increase efficiency and service levels. Through an integrated approach to shared services, web-based technology, organizational structure, and business process outsourcing, a company can realize maximum gains quickly.
Download your free copy of “CFOs: Driving Finance Transformation for the 21st Century,” at www.us.cgey.com/transformfinance.
For information about CGE&Y’s finance transformation services, please contact: Rich de Moll at 917.934.8820 or richard.demoll@cgey.com
CGE&Y Finance Transformation Solutions Drive Improvements in Shareholder
Value
Shareholder Value
1. Prioritize measures and Value Creation Model[TM]
related initiatives to drive
shareholder value
2. Incorporate measures into Management Insight[TM]
management processes
3. Streamline transaction Transaction Transformation[TM]
processes to reduce costs
and improve service levels
4. Continue to Re-Assess Adaptive Finance Transformation
CFOS: DRVING FINANCE TRANSFORMATION FOR THE 21ST CENTURY
This comprehensive study from Cap Gemini Ernst & Young and CFO Research
Services captures what CFOs and senior finance executives are talking
about today.
Learn what over 265 CFOs and finance executives told us about:
[ ] Allocating resources to drive long-term growth– can finance departments meet the challenge?
[ ] Time and resource demands for transactionprocessing — what can be done about it?
[ ] Accounting scandals, recession and reportingtransparency
[ ] IT systems as roadblocks to financetransformation
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