Business partnering, business intelligence, benchmarking, outsourcing, talent management – just some of the solutions put forward to develop effective finance functions. Sometimes they help and sometimes they don’t.
We believe that greater confidence in selecting the best course of action can only be achieved by carefully analysing finance functions and the unique contexts within which they operate. In this report we propose a framework which helps managers carry out this analysis.
The framework of finance activities and the drivers that shape their implementation (‘the framework’) is shown in Figure 1. The framework is summarised and discussed in Section 1, which also covers the practical implications of our work and proposes some next steps. For those interested in more detail and the supporting evidence for the report Sections 2 to 6 provide a guide to the framework. These sections can be navigated using the references on Figure 1.
The report is based on discussions with senior finance professionals, a wide-ranging review of the relevant literature and our own experience.
Our work aims to support finance staff and their advisors in their role of contributing to organisational success. In order to achieve this aim a broad understanding of finance functions and the contexts they operate in is vital. This understanding will help managers anticipate and adapt to change as they attempt to build effective finance departments. In doing so it is important that we are realistic about the limits of the contribution that finance departments can make to performance, and also that we acknowledge that finance activities can be carried out successfully outside of the finance department. This report also serves to highlight the relationships between finance activities and the inherent tensions and challenges faced by finance staff. Developing our understanding of finance functions is an ongoing process which the framework helps to facilitate.