Financial insight: challenges and opportunities

Introduction

This report suggests ways the finance function can improve current approaches to business partnering. It proposes nine pragmatic actions to improve partnering practices anchored in three core component parts: creating the mandate, fixing the information and deploying the talent.

Acknowledgements

ACCA and IMA would like to express their sincere thanks to all the finance and business leaders who participated in our global series of roundtables in London, New York, Singapore, Hong Kong, Vancouver and Toronto. Without their support and insights the production of this report would not have been possible. We would also like to extend our sincere gratitude to the finance leaders who participated in the interviews as well as to the ACCA and IMA members around the world who participated in the survey, the results of which are included in this report.

'The most successful organisation I have seen is where finance is balancing governance with value add and combining this with the ability to speak in a language the business understands, without going native. You cannot stand on the side of the table and forget who you are.' (Finance leader roundtable, Singapore)

Foreword

Don’t believe everything you read. Finance business partnering, and the commercial ‘insight’ agenda are not new phenomena. For those of us old enough to remember, enterprises had established ‘commercial finance’ operations before the nomenclature ‘finance business partnering’ was established. Nor should business partnering be seen as a responsibility now being added to the remit of the finance department. The finance function has always had a role to play in providing information insights to the enterprise to support better business decision making. These are, however, extraordinary times. 

Today’s business operating environment is competitive, complex, nuanced, volatile, fast changing and entrepreneurial; there are broad social and demographic changes affecting how and where business is done to meet the demands of a changing global consumer population, amid the broader economic rebalancing of the world’s economy. Despite this, it is the advent of technology that is having the most profound impact on working lives. At the heart of creating competitive advantage will be technological innovation. How the business uses the data at its disposal to take more effective decisions will be the ‘make or break’ of corporate success.  

The growing digitisation of businesses, a more entrepreneurial climate, and new successful business models that meet customer needs more efficiently will drive a highly competitive enterprise landscape. These developments will also have a profound effect on the future of the finance function because, in a fast-moving, data-rich business environment, enterprise data insights will be central to creating advantage and corporate value.

ACCA and IMA see these developments as a great opportunity for the finance function, but they also present a challenge to its internal influence and reputation. This is particularly true because this study, focused on the financial insight agenda, suggests that many practices in finance business partnering are failing to keep pace with the rapidly changing environment. Essentially there are three impediments: leadership and strategic alignment of these practices are falling short; the finance department is ineffectively ‘tooled up’ with poor technology; and there remains a shortfall in capability and talent equipped to deal with this changing environment.

This report draws from:

  • data from a global survey in 2014
  • finance leader roundtable discussions in New York, London, Toronto, Vancouver, Singapore, and Hong Kong, and an accountants for business roundtable discussion in London
  • qualitative interviews with finance leaders.

The results suggest that the finance function can improve current approaches to business partnering by:

  • creating a sustainable mandate for finance business partnering practices to flourish
  • fixing and reworking the quality of data insights provided to the enterprise, and
  • deploying finance talent with the right mindset to meet the challenges.
 
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Financial insight: challenges and opportunities
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