Finance Evolution: Ledgers to Leadership

by Chartered Institute of Management Accountants, 16 October 2011

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Human Capital Management

tags:
business competency business partnering finance function Professional Development talent management technical skills

CIMA’s report, Finance Transformation: The evolution to value creation, concludes that finance functions in today’s organisations are transforming into business partners with other parts of the organisation via a process of evolution.

Such a role requires much less of an emphasis on cost-efficiency and back-office duties, and much more on finding ways to be outward-facing and a creator of value. It makes new demands on finance professionals while still requiring them to be both technically competent and in a position of independence.

The report highlights that finance functions require a portfolio of roles and finance professionals with a diverse range of competencies and skills. Both business-oriented competency and technical competency are indeed seen as being crucial to the business-partnering role for the finance professional, but their importance is not restricted to this role. Instead, business competency is vitally important across all finance roles, independent of the adoption of business partnering.

Paradigm shift

The findings show that there should not be an expectation of a ‘typical’ finance professional, as finance professionals will continue to be extremely diverse in their capacity to undertake new types of roles.

CIMA also reported that the changes taking the finance function towards the business partnering role do not necessarily encompass the elimination of more traditional roles, such as transactional processing work, since developments in IT have meant that this is far less onerous a task even than ten years ago.

And due to virtual collaboration, neither do they require physical relocation of finance professionals to the business units they partner. Instead the key changes are those that really create value via improving internal processes and focusing on products and services.

CIMA’s consultations indicate it is possible that, having become involved in these changes, the finance function may continue down the evolutionary path and proceed to the next step: being a true business partner with a stake in, and responsibility for, those strategic and operational decisions into which it has an input.

It is therefore possible to see that identifying the type, and developing and then maintaining these business competencies as a priority for finance professionals, involve a shift in paradigm similar to the move towards business partnering itself.

Indeed, it is even wider reaching, since all finance professionals, both business partners and finance specialists, will require better business and commercial skills going forward to provide the value that organisations expect from the finance function of the future.

You can even have leadership

Submitted by James Loftcraft on 19 December 2011 - 3:32am

You can even have leadership classes today that will teach you to overcome certain aspect of your CEO personality in order to improve the kind of decisions that you have to deal with everyday. Creativity plays an important role, but also being professional and knowing your limits.

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