The Changing Role of the Finance Organization in a Multi-Polar World

Foreword
By Dan London
For companies seeking high
performance, these are indeed
challenging times. While globalization
has presented enterprises with new
growth opportunities in previously
unserved or underserved markets, it
also has substantially increased the
complexity, pace of change and risk
executives must confront. In fact,
dealing with the ramifications of
today’s multi-polar world—a world in
which economic might emanates from
multiple points around the globe, not
just from traditional centers of power—
has become one of the most pressing
strategic concerns of companies
everywhere. In most enterprises,
significant responsibility for helping
guide the enterprise through these
largely uncharted waters falls on
the chief financial officer (CFO). Far
from merely acting as a company’s
“head accountant,” today’s CFOs face
a broad set of challenges they must
address to help keep their companies
on the road to becoming a highperformance
business.
In our work with clients around the
world, Accenture has experienced
these challenges firsthand. We know
how CFOs must continually work to
strike the appropriate balance between
managing the company’s finances
while providing the strategic guidance
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to the enterprise that chief executive
officers increasingly expect from them.
We see CFOs diligently striving to keep
a tight rein on costs while helping
the business create greater value for
customers and shareholders. And we
witness time and again CFOs’ efforts to
infuse greater organizational flexibility
and responsiveness so their companies
can act quickly in the face of the rapid
change that has become the hallmark
of a truly global economy.
These experiences led Accenture to
embark on a comprehensive research
effort to not only shed further light
on the challenges CFOs face, but
also to identify the practices that
“finance masters” are employing
to help position their companies
to achieve high performance. Our
research included an in-depth survey
of hundreds of finance executives
around the world, as well as deeper
interviews with other CFOs who have
led or are leading successful initiatives
to improve critical aspects of their
finance organization.
What did our research reveal? We
found most finance organizations
are neither performing at a high
level nor focused on developing the
capabilities they need to address key
operational and strategic challenges.
We further found that while finance
executives consider attracting and
retaining talent to be one of their
biggest challenges, most companies
are lagging in practices they consider
critical to building and sustaining
an effective finance workforce. And
we discovered that many finance
organizations do not have a full and
accurate understanding of their total
cost structure, making it difficult for
them to determine how and where to
concentrate improvement efforts.
Conversely, our research also identified
a number of companies in which the
finance organization understands and
invests in those capabilities required
for high performance in both the
finance organization and the business
overall. They have a strategy and
execute it skillfully. These organizations
recognize that mastery of the finance
function does not require one to be
the best at everything, but rather, only
in those areas that count. In other
words, they focus on building superior
capabilities that enable the company
to excel in areas that are critical to
driving value for both shareholders
and the enterprise.
As a result of this approach, masters
are much more likely than their peers
to have generated a more positive
impact from their finance-improvement
initiatives, as well as to be more
satisfied with the performance of the
finance organization across myriad
dimensions. And as Accenture’s ongoing
research on the characteristics of high
performance has confirmed, the tight
alignment of finance strategies and
capabilities within the larger enterprise
strategy is a key factor in a company’s
ability to achieve superior financial
results consistently over time.
On the following pages we explore the
results of our research in detail. We
hope that our findings inspire useful
dialogue among executives on the
role of both the finance organization
and finance executive in the larger
enterprise. We also trust that the
insights herein will help provide
valuable direction on the key initiatives
finance should undertake to build the
capabilities that optimally support a
company’s pursuit of high performance
in a multi-polar world.
Dan London
Managing Director
Finance & Performance Management
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