Tackle common problems by adopting innovative solutions

Creating a world-class finance function recognises that there are significant challenges involved in achieving world-class status. The Report deals with each capability in depth to get to grips with the underlying issues and provide innovative ways of turning them to corporate advantage.

On business partnering
A sceptical business will need convincing that finance really can add value to its operations. This was the starting point for finance at Purolator Courier: managers equated finance with information overload. Following a far-reaching change programme, finance was able to reposition itself as a valued business partner by:

• Adopting a consultative, customer-based approach
• Establishing exactly what managers wanted from finance
• Ensuring the relevance of financial reports and information

Find out how other companies changed the structure of their organisations to integrate finance with the management team – one of the success factors for Carlson Companies was to appoint a CFO in every business unit to ensure that finance operates as part of the top management team.

On budgeting
The focus of growing dissatisfaction because of its inflexibility and declining relevance in a world of rapid business change, the traditional annual budget lingers on as a fixture in most corporate calendars. By contrast, world-class companies are discovering better ways of setting goals, allocating resources and tracking performance. The Report shows how to improve budgeting by:

• Realigning the budget with external, rather than internal, targets
• Replacing negotiated rewards with team-based, competitive
• Making budgeting a continuous, rather than, annual process
• Integrating the budget with the scorecard and other performance management frameworks
  

In some cases, companies are using rolling forecasts in parallel with budgeting. Learn how Boston Scientific improved its ability to compete in a volatile market by introducing quarterly budgets that increased its agility and competitive performance.

On compliance
Most companies see the need for compliance with the recent surge of regulations on reporting and governance, ranging from Sarbanes Oxley to the UK’s Operating and Financial Reporting requirements and EU directives, as nothing more than unwelcome burdens. Those that take the view that they represent a competitive opportunity to make quantum improvements in performance can turn the agenda round. Creating a world-class finance function explains how to turn compliance to advantage through:

• Using compliance implementation to reengineer processes and achieve major benefits in the bargain
• Take the opportunity to generate a better, cleaner data that will enable them to make decisions more quickly
• Standardise systems and processes to meet or exceed compliance criteria
  

The Report also explores the tensions for finance, including the trade-offs between an entrepreneurial, risk-taking approach to business partnering and the responsibilities of corporate governance.