Contents

Author Profile
Acknowledgements
Foreword
Preface

Chapter 1: The Finance Function in the New Millennium
Facing Up to a New Agenda
Three Waves of Change
A New Vision for Finance
Moving into a New League
Best-practice Trends for Finance
Moving Ahead

Chapter 2: The Value-adding Finance Function
Executive Summary
Introduction
Nature of a Value-adding Finance Function
Case Report: Bristol & West
Searching for Key Trends
Case Report: Earls Court & Olympia Group
Cost of the Finance Function
Implications for Finance
Transformation of Internal Profile
A Stark Choice
Where Finance Staff Spend their Time
Survey Evidence
Case Report: EDS, US
Staffing the Finance Function
Finding Ways to Add More Value
Strategic Decision-making
Planning
Financial Planning
Forecasting and Budgeting
Business Process Profile
Becoming the Business’s Information Owner
Using Best Practice to Add Value
A Six-step Change Process
Conclusion
Case Study: Burger King, US
Case Study: Hertfordshire County Council, UK

Chapter 3: Driving Finance Change
Executive Summary
Introduction
Making Finance a Driver of Change
Case Report: Action for Employment (A4E)
Looking for Something New
Tools for Beyond Budgeting
To Devolve or Centralize?
Leading from the Front
The Roots of Re-engineering
Business Process Re-engineering
Building the Business Case
Resource Implications
Planning the Project
Key Initial Questions
Engineering Diagnostic
Benchmarking
Pioneering Benchmark Practice
‘Legitimate Theft’
Benchmarking the Finance Function
Securing Buy-in
Change Visions
Case Report: BNFL, UK
Successful Re-engineering Projects
Improving the Accounts Payable Process
Improving the Travel and Expenses Process
Conclusion
Case Study: H P Bulmer, UK
Case Study: Electronic Data Systems, US

Chapter 4: Shareholder Value and Capital Markets
Executive Summary
Introduction
Perils of Short-termism
Bonuses Spur Value Creation
Barriers to Value Alignment
Closing the Loop with Measurement
Strategic Focus and Planning Goals
Becoming a Chief Value Officer
Shareholder Value Analyses
Definition of EVA
Case Report: H&R Johnson Tiles, UK
EVA as a Management Tool
Research on EVA
Creating Intellectual Capital
Ways to Measure Intellectual Capital
Skandia Navigator
Intangible Assets Monitor
Intellectual Capital (IC) Index
Value Dynamics
Activity-based Costing (ABC)
What is ABC?
ASI Methodology for Aligning Key Processes with Financial Accounts
Outline of Methodology
Six Key Steps
Managing Capital Markets
The Importance of Narrative
Factors that Impress Capital Markets
Primary Factor 1: Actual Financial Performance
Primary Factor 2: Actual Financial Performance Versus Stock Market Expectations
Primary Factor 3: Long-term Stock Market Expectations
Conclusion
Case Study: DHL Europe/Africa, Belgium

Chapter 5: New Skills Requirements for the Finance Function
Executive Summary
Introduction
Change in the Financial Professionals’ Skills Set
What Finance Professionals Think Important
Case Report: Sun Life Assurance, UK
Wider Skills Required
Finance Leaders
Strategic Decision-making Skills
Functional Skills Sets
Process Management and Measurement Skills
Case Report: Electrolux, Sweden
Delivering Relevant Information
Case Report: Rolls-Royce Defence Aerospace Business Unit
Adding Value as Trainers
People Management Skills
Customer-focused Skills
Shareholder Management Skills
Partnership Skills
Managing a New World of Risk
Case Report: Halifax bank
Finding a Way to Manage Risk
Knowledge Management
Conclusion
Case Study: British Nuclear Fuels, UK

Chapter 6: Managing and Reporting Balanced Performance
Measures
Executive Summary
Introduction
The Balanced Scorecard
Background
The Four Perspectives
Evolution of the Balanced Scorecard into a Strategic Framework
Driving Corporate Strategy
The Measurement Model
Early Warning System and Tracking Development of Core Indicators
Quality Assessment Frameworks as Measurement Systems
Identifying the Benefits of Scorecards
Implementation Challenges
Strategy Deployment
Linking Performance Measures to Strategy
Case Report: SKF, Sweden
Linking Non-financial to Financial Measurements
Customer Satisfaction Measures
Case Report: Welcome Financial Services, UK
Implementation Challenges and Tools
Alignment Workshops
Performance Measure Record Sheet
Finance Adding Value
Conclusion
Case Study: British Telecommunications plc, UK

Chapter 7: Adding Value to the Finance Function with IT
Executive Summary
Introduction
The Impact of E-Business on the Finance Function
Case Report: Halifax Bank
Modern Accounting Systems
Reduced Cycle Times
Entry Procedures
Invoice Handling and Self Billing
IT and Management Information
Older Information Access Environment
Providing Information to Managers
Report Writer
Case Report: Welsh Water, UK
Enterprise Resource Planning (ERP)
Adding Value Through the Web
Employee and Customer/Supplier Applications
Purpose-designed Networks
Financial Consolidation Systems
Need for Management Reporting
Spreadsheet and Specialist Packages
Consolidation Functionality
Planning, Budgeting and Forecasting
Planning
Budgeting
Forecasting
ABC/ABM
Moving to Application Service Providers (ASPs)
Case Report: Fredericks Dairies
Conclusion
Case Study: British Airways, UK

Chapter 8: Creating a Shared Financial Services Centre
Executive Summary
Introduction
Key Definitions
Shared Services and Centralization
Individual Business Centres
Centralized Company Location
Key Differences in Approach
Why Create a Shared Services Centre?
Cost Savings
Staff Downsizing
Consolidation
Leveraging and Service Benefits
The Centre’s Value-adding Role
Composition of a Shared Services Centre
Which Functions Should be Placed Within the Centre?
Which Functions Should be Left Outside
Building a Business Case
External Benchmarks
Management Commitment
Becoming Customer-focused
Service Level Agreements (SLAs)
Performance Measures and Quality Metrics
Customer Satisfaction Surveys
Internal Councils
Initial Thinking in the Transformation Process
Key Factors
Key Elements of Strategy
Case Report: Royal Bank of Scotland, UK
Strategy in Implementation
Planning
Implementation
Pricing Issues
Barriers to Setting up a Shared Services Centre
Soft Barriers
Communication Plan
Training Plan
Case Report: HP Europe
Conclusion
Case Study: Honeywell, US

Chapter 9: Outsourcing Finance Operations
Executive Summary
Introduction
Three Kinds of Outsourcing
Levels of Outsourcing
What Finance Work Can Be Outsourced?
Why is Finance Outsourcing on the Agenda?
Benefits
The Added-value Role of Outsourcing
Outsourcing in Action
Processes Not Being Outsourced
Case Report: H&R Johnson Tiles, UK
Outsourcing and Technology
Case Report: Burger King, US
The Outsourcing Decision-making Process
The Strategic Dimension
Strategic Implications
Why Should the Company Not Outsource for Cost Reasons Alone?
Implementing Outsourcing
Necessary Stages
Communication and Contract Definition
Creating Partnerships
Case Report: TNT Express Worldwide
Outsourcing — The Pricing Issues
Transfer Costs
Case Report: British Petroleum
The Cost of Changing
The People Dimension
Career Opportunities
Pay/Pension Entitlements
Case Report: Hertfordshire County Council
Outsourcing Failure
Case Report: Reliable Stores, US
Conclusion

Chapter 10: Conclusion – A View of the Future
Introduction
The Changing Nature of Change
Finding Ways to Add Value
Looking Beyond the Budget
Creating Shareholder Value
Seeking out Intellectual Capital
Balancing the Question of Measurement
Making It All Happen
Preparing for E-Business
New skills for New Challenges

Appendix 1 – About Hackett Benchmarking
Appendix 2 – The Hackett Benchmarking Finance Group
Study
Appendix 3 – A Benchmarking Template
Appendix 4 – The Malcolm Baldrige National Quality Award
References
Index