Business Competence Vs. Technical Skills

by Chartered Institute of Management Accountants, 05 December 2011

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Finance and non-finance respondents in the CIMA study, Ledgers to Leadership, say business and commercial skills are important across the spectrum of finance roles. But there is clearly a difference in the level of importance attributed for certain roles.

Balancing business and technical competency

The CIMA Centre of Excellence at the University of Bath School of Management has found that business competency is rated as more important overall by finance professionals. However, the balance between business and technical competency shifts subtly when it comes to the exact skills needed for a particular role or set of duties.

When the roles that finance professionals fill in organisations are categorised into five ‘role types’ in accordance with the principal activities in which they engage (strategic and advisory, management accounting, systems, regulation and financial), each role type is found to have a different emphasis on the two main competencies (business and technical).

A clear spectrum runs from the strategic and advisory role (comparatively strong on business skills, less on technical) to the financial role (strong on technical, less on business skills).

This is shown by the relative positive and negative weightings attributed by finance professionals in Exhibit 1.

Click image to enlarge

Exhibit 1: Relative importance of competencies to role types

The need for technical competency is relatively weaker in the strategic and advisory role type than that for business competency, but for all the other four role types there is a relatively stronger need fortechnical competency.

As for business skills, while the need for these is relatively much stronger in the strategic and advisory role type, it is relatively weaker for all the others, especially in the regulation and financial role types.

Thus the balance of competencies is very much role dependant: each role type encompasses a portfolio of activities and a mix of competencies and skills is needed for each.

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