Finance Function emerges as enabler of innovation
In the ever changing world of globalization, there is an increased need for higher level of competency in order to even exist in the race of development. Living in such fast times can be a boon only if you are ready to embrace change and expand your horizons. The fluctuating global economy has made companies of all sizes finally take a pause and think what‘s next!
CFOs across the world are forever trying to make a mark of their own with better performance based on bigger profits. Most of the companies have specialized provincial processes to handle financial activities of their various business units. But inconsistent measurements across various operating units of an organization mean that an aggregate picture for higher synergies and efficiency will be difficult to achieve.
This also leads to discrimination in revenue and stock price growth in the management structures of a company.
Redefining the meaning of being global, business enterprises are reaching beyond setting up mere business structures in different countries and working towards establishing an integrated concept of standardized innovative finance management function to have a greater business impact.
The protocols being established for achieving this include: an enterprisewide common data definitions, standard Chart of Accounts, standard processes and globally mandated standards, as was found in The Global CFO Study 2008 conducted by IBM.
This also establishes the emerging concept of Integrated Finance Organization as defined in the above mentioned study.
It can be said at this point that in the world of business, the finance department is fast replaced by the radical concept of finance organization. Like the rebirth of phoenix from its own ashes, the finance department is fast coming out of its narrow regional scope and emerging as a standardized global Finance Organization that promises innovative contribution to business growth.
Today everyone agrees that basic tasks such as commodity and transactional activities can be performed remotely. It is strategic to outsource non-core operations. Now, companies are further increasing the scope of offshore outsourcing to include decision support activities such as reporting of various types and expert function activities that depend heavily on analytics. This is such that certain GE companies have off shored up to 40% of their finance function.
Hence with the emergence of an advanced finance world, it will be best to adapt fast and increase the purview of financial management functions and lead the race.