The finance departments that have the best relationship with their business often thrive, while those with relatively little influence inside and outside their own organisation may find the job of strategist and business partner increasingly untenable, finds a new study released by KPMG.
According to the "Being the Best: Thriving not just surviving," study, there are two key components to building greater influence: better business intelligence (the right information at the right time) and better business skills (the right people).
The study explains that business intelligence is a collection of insightful information that helps business leaders make better decisions that enhance shareholder value. "In many cases, the provision of robust business intelligence differentiates top performers from the rest," says the study.
Meanwhile, business skills enable finance individuals to take this business intelligence and bring it to life. "Unless there are high performing individuals in the finance function who understand the implications of this business information, the business information loses impact," the study says.
To build influence, the KPMG study stresses it is critical that finance understand the key drivers of business value. "Understanding key business metrics and how they drive shareholder value is at the core of building influence with leaders across the business," states the study, adding that building relationships with the research and development or sales and marketing divisions should be also seen as priority.
To develop finance into influencers of the business, KPMG says that people in finance need to focus on the external environment, and to understand economic trends, the industry and the competitive landscape in which the organisation operates.
The China Opportunity
Focusing on China, KPMG says that Chinese businesses can select from a number of strategies and approaches to develop their finance teams into influencers of the business. The first is in retaining and develoing existing talent. "Most high performing global businesses now have a training structure in place to develop their finance people as business partners," notes KPMG.
Another initiative KPMG lists is to encourage finance teams to use a wider range of external resources such as access to global thought leadership, research studies, white papers, online seminars and web casts from external providers.
KPMG says that with a larger pool of talented resource now available in the market as a result of the economic downturn, Chinese companies should leverage the experience of finance professionals from overseas or domestic competitors. "Many professionals across the world value the opportunity to work in China; this provides Chinese companies with real buying power when looking for the best talent to help drive business performance," says KPMG.
The KPMG study concludes that China's ability to compete on the world stage is proven. However, to improve the chance of success, businesses must ensure they focus on driving high performance in their back office or support functions to help enhance overall business performance.