Role of Finance in Business Management

Extreme speed of globalization, availability of huge data and tools and customer rights, environmental sensitivity, sustainable business growth and work force trends and preferences necessitate the establishment of a very strong finance function.

Mastery of the financial principles and decisions by the senior business management and financial assurance of right business decisions are now crucial for the shareholders, investors, employees and  customers to make financially sound and well managed corporate decisions.

 

With understanding and utilization of the basic financial planning and reporting principles and tools, corporate leadership can better plan and manage the profitability, solvency, efficiency, risk and overall performance of their organizations and thus satisfy the requirements of their key stakeholders.

  • Financial reporting should provide information that is useful to, current and potential, investors and creditors and other users in making rational investment decisions
  • The information should be comprehensive to those who have a reasonable understanding of business and economic activities and are willing to study the information with reasonable diligence.

The information should reflect a true and fair value of the company activities

Finance therefore fulfils two roles:

 

  • Compliance/Fiduciary Duty
    • Transparency to investors
    • Legal, Regulatory and Tax compliance in jurisdictions the company operate in
    • Record keeping
  • Business Support
    • Translate strategy into financial goals
    • Financial budget planning & forecasting
    • Support management decision and control
    • Management Reporting
    • Ad-hoc analysis of resource allocation proposals

For the Business Support role, finance is one of the four key set
of business fundamentals in the Balance Scorecard:

 

In cooperation with KnowledgeTrack, Swiss Business Institute Sarl will deliver a one-hour free webinar on january 28th, at masteringknowledge.com in advance of a 2 full day live on-line training 

This free webinar will help you to:

  • Emphasize the criticality of using the same language in finance
  • Understand basic concepts and terminology of accounting and finance
  • Become familiar with basic financial statements
  • Be able to use analysis tools in evaluating financial performance and investment proposals
  • Better understand financial implications of business decisions
  • Improve and master financial planning process for business

This course is developed to equip non-finance corporate leadership with the required financial concepts, tools and techniques through a model of seminar, pre- and post-training reading and assignments and exercises.

Neem een fictief bedrijf, maar op basis van daadwerkelijke bedrijfssituaties. Een bedrijf in de nutssector, Util. Fictief maar met echte uitdagingen.

Util heeft aansluitingen naar huishoudens in beheer, waarbij het heel nauw luistert waar die aansluiting precies de woning binnen gaat en waar hij op de centrale leidingen aansluit. Verkeerde registratie kan voor een hoop onnodig graafwerk (en dus kosten) zorgen maar kan bovendien ook aanzienlijke schade opleveren. Deze informatie is cruciaal voor Util, maar privé wat de bewoners van de panden betreft, dus privacy regels moeten strikt nageleefd worden.

Utils beleid is erop gericht een excellente dienstverlener te zijn. Om daarop te kunnen sturen is passende informatievoorziening nodig, maar daar wringt de schoen. En niet zo’n beetje.

De aansluitingen info staat in een geografisch informatiesysteem dat op verouderde technologie draait die niet makkelijk benaderbaar is buiten de muren van het kantoor van Util. De planningsgegevens van de onderhoudsdiensten zitten in een onderhoudspakket. De klantinformatie zit in een CRM systeem, de contracten in een apart contracten pakket. En natuurlijk gebruikt Util een financieel pakket, van waaruit de facturatie plaats vindt, wat om foutloze koppelingen tussen de systemen vraagt. Sommige applicaties zijn zelf geschreven, andere zijn gekochte pakketten, waaraan vaak toch weer specifieke aanpassingen voor Util zijn bijgebouwd. Util heeft nog een eigen rekencentrum, maar de meeste systemen die nog door de eigen beheerders van Util onderhouden worden, staan in een extern rekencentrum waar Util infra diensten van afneemt. Intussen neemt Util veel kantoorapplicaties al af als SaaS dienst.

Naast de eisen die de maatschappij aan Util stelt zorgen regelgeving van de overheid, plannen van verschillende afdelingsmanagers, ontwikkelingen bij het rekencentrum, updates van de SaaS leveranciers en aankondigingen van nieuwe releases door pakketleveranciers ervoor, dat de IT afdeling alle kanten uit wordt getrokken zonder te weten hoe ze hun kwaliteit van dienstverlening kunnen handhaven. En dat begint ermee dat niet helder is gedefinieerd hoe bedrijfsdoelstellingen worden vertaald naar afdelingsdoelstellingen en op welke manier de informatievoorziening dat moet ondersteunen.

Deze problematiek is oplosbaar. Wat ontbreekt bij Util is goed ingericht en effectief opererend Functioneel Beheer. Niet dat er niemand rondloopt met een titel die lijkt op functioneel beheerder, maar dat is dan óf een key-user binnen een specifieke afdeling of een technisch beheerder die aanpassingen in de eigen gebouwde software kan doen.

Functioneel Beheer (FB) is de dienst die als olie in de machine bewaakt dat de beleidsdoelen van de organisatie effectief worden ondersteund door de juiste informatievoorziening. FB werkt naar behoren als het de lange termijn doelen van Util kent, de daarbij behorende informatiebehoeften van de diverse afdelingen in kaart heeft, continu afstemt met de key-users van elke afdeling om zowel huidig functioneren als toekomstige behoeften van IT te bewaken, de inhoud van de leverancierscontracten en SLA’s bewaakt en up to date houdt in relatie tot die behoeften, het geheel afzet tegen de vigerende overheidsregels m.b.t. privacy en dergelijke, zorgt voor de juiste opleidingen voor en training van eindgebruikers in het omgaan met de IT-middelen, enzovoorts enzovoorts. 

Functioneel Beheer kan op deze manier overkomen als het schaap met de vijf poten, maar dat is het niet. Het is een multidisciplinaire dienst waar een breed scala aan competenties van wordt gevraagd, wat automatisch inhoudt dat het een mengeling van functionarissen met zo breed mogelijke vaardigheden moet zijn die deze dienst invullen, zodat ze elkaar zowel aanvullen als overlappen qua competenties.

Wie weet zouden we allemaal eens wat dieper in het onderwerp Functioneel Beheer moeten duiken om te zien op welke manier het onze eigen organisaties stappen vooruit zou kunnen helpen in het effectief inzetten en benutten van onze informatievoorziening.

Meer weten over het toepassen van functioneel beheer?

Schrijf je in voor het gratis webinar op vrijdag 5 februari!

De Functioneel Beheerder wordt steeds meer de spin in het web. Hoe u daar concreet invulling aan kunt geven, leert u tijdens dit gratis webinar.

Henjo Ummelen (Directeur De Zuit) en Robert Borkes (Kennismanager) nemen u mee in deze wondere wereld. Die na het volgen van dit webinar ook voor u open zal gaan!

Coherance of Finance Metrics

 

  • Can we grow and still be profitable in times of uncertainty?
  • Can we innovate and achieve our financial goals as well?
  • What is actually profit? Is it the same as cash?
  • How can we make our stakeholders happy? By the way, who are the stakeholders?
  • What is our long-term strategy and short-term operational objectives? Are they in line?
  • Does every member of our team understand the strategy? Do they know what they should do to support it?

While many organizations will struggle to define and communicate these fundamental and vital questions, others will be proud to refer to their annual reports, investor analysis and internal memorandums and prove that these fundamentals are well thought and documented, at least by senior management. But we know that senior management is aware of only 4% of the problems in the organizations, middle management about 9% and only the operating levels know them all.

So, it is imperative that any organization that decides and documents on their financial fundamentals that will help make the strategic objectives but it is even more crucial that all the troops also understand and support them and aligned to make them.
When the CEO declares ‘’our focus is growth and sky is the limit’’, the supply chain planner understands more units to ship, sales rep understands more prices to cut, accounting understands more reports to reconcile, treasury understands more forward contracts to engage, etc. And how all these different looking and crucially metrics are defined and reconciled.

Half of the Fortune 500 companies on the 1954 list don’t exist at all today. Not because they did not have a greatstrategy! Global organizations have become so big and complex that congruence of the financial metrics have become even vital than ever. Congruence of the financial metrics mean; all troops speak the same financial language meaning they are all aligned and working in the same direction.

It has been observed that, contrary to the general belief ignorance level of the organization about the problems that exist, is like an iceberg and the higher you are in the organization, the less you are informed, particularly about the financial metrics.

Whether you are a global business or an NGO or a public organization, of different size and scale, you will have a purpose of existence. What finance does is to translate your business objective and plans into a financial plan that includes all areas like planning, budgeting, pricing, cost management and financing your operations with the appropriate financial metrics that are planned, measured and managed realization if which will also help you to achieve your business objective.

So, information should be from top to bottom and from bottom to top in a coherent and consistent way and “speaking the same language”, especially in financial terms and metrics (profit, cash, return on investments, budget/actual rate, dividend, expenses/costs, etc.)

In cooperation with KnowledgeTrack, Swiss Business Institute Sarl will deliver a one-hour free webinar on january 28th, at masteringknowledge.com in advance of a 2 full day live on-line training 

This free webinar will help you to:

  • Emphasize the criticality of using the same language in finance
  • Understand basic concepts and terminology of accounting and finance
  • Become familiar with basic financial statements
  • Be able to use analysis tools in evaluating financial performance and investment proposals
  • Better understand financial implications of business decisions
  • Improve and master financial planning process for business

This course is developed to equip non-finance corporate leadership with the required financial concepts, tools and techniques through a model of seminar, pre- and post-training reading and assignments and exercises.

Translate financial information into valuable knowledge

Do you and your organization speak the same language on a strategic and operational level, so you can successfully translate your vision into implementation and thus achieve policy goals? Knowledge management for financials is about developing a coherent governance model which rises the value of knowledge for your organization. To improve the added value of your organization and achieve a higher return on information you learn literally to Translate information into knowledge. Based on a conceptual framework you will learn to recognize the power of mutual language between finance and the enterprise.

The corporate business management has never been so challenging due to the extreme speed of globalization creating very complex dependencies and risks, the availability of huge data and tools to measure the business performance and new kinds of strong trends and risks in areas like customer rights, environmental sensitivity, sustainable business growth and work force trends and preferences. These trends and developments necessitate the establishment of a very strong finance function as well as mastery of the financial principles and decisions by the senior business management. The financial assurance of right business decisions is now part of having ‘’business acumen’’. All the stakeholders including shareholders, investors, employees, customers, etc. now need financially sound and well managed corporations.

With understanding and utilization of the basic financial planning and reporting principles and tools, corporate leadership can better plan and manage the profitability, solvency, efficiency, risk and overall performance of their organizations and thus satisfy the requirements of their key stakeholders. Besides the quality of financial systems and team structure, it is equally critical that all the management, finance teams and all the stakeholders speak same language in terms of financial goals and concepts.Necessary checks and systems should be put in place to ensure the coherence of financial language in all the organizations.

In cooperation with KnowledgeTrack, Swiss Business Institute Sarl will deliver a one-hour free webinar on january 28th, at masteringknowledge.com in advance of a 2 full day live on-line training 

This free webinar will help you to:

  • Emphasize the criticality of using the same language in finance
  • Understand basic concepts and terminology of accounting and finance
  • Become familiar with basic financial statements
  • Be able to use analysis tools in evaluating financial performance and investment proposals
  • Better understand financial implications of business decisions
  • Improve and master financial planning process for business

This course is developed to equip non-finance corporate leadership with the required financial concepts, tools and techniques through a model of seminar, pre- and post-training reading and assignments and exercises.