Transforming the role of Finance to a Strategic Business Partner

1. A
Speaker: Irelan Tam, DBA,FCMA,CGMA
Date: Nov 5th, 2014
Finance Transformation
The Role of Finance becomes a Value-Adding Business Partner
©CIMA 1

2. Transforming the role of finance into a strategic business partner
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The role of finance from “Steward and Controller” towards “Business Partner”
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Dual focus on driving costing efficiency towards supporting decision making and value creation
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Embracing broad ranges of ‘business competency’ in business planning and analytics towards long term business sustainability
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Implementing a journey to Value Creation
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Explore how business analytics driving growth strategies and profitability
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How about Business Partnering in SME?

3. “THE SHIFT FROM COST EFFICIENCIES TO VALUE CREATION DOES DEMAND A BROADENING OF SKILLS FOR FINANCE PEOPLE… DOMINIC P MOORHEAD, PRESIDENT EUROPEAN OPERATIONS, CARIS LIFE SCIENCES 2011
The role of Finance evolves from focusing on cost and process efficiencies and the catalyst in improving business performances to becoming the business partners to create further value. ©CIMA 3

4. ©CIMA 4
Finance Transformation -The Changing Role of Finance
CIMA(2007) Improving decision making in organizations – the opportunity to transform finance

5. Finance Transformation -Drivers of Change
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Environmental Changes
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Technology Changes
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New Regulations
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Increased Competition
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Social Pressure ©CIMA 5

6. 50% Business Analytics and 20%
Decision Support
20% Management Reporting 10%
20% Transaction Accounting 50%
10% Management Control 20%
IBM 2010 CFO study
*Best Benchmark
SME Study
CIMA2011 Finance Transformation
SME study

7. What are the Challenges for Business Partnering?
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8. Challenges for Business Partners
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We want our finance staff not just understand the numbers, but also know what it takes to grow and manage the business.
Dan Crunb,
CFO, Kansas City Chiefs
We need people who can strategically influence the business segments they support. They need honed communication skills so they can provide insights in a concise and impactful manner to non- finance people…..
Gary Rourke,
VP Finance, AstraZeneca
Finance professionals are often viewed as historians…. but we are working towards a more value added approach: towards a trust-based relationship getting magnified and strengthened as we move up the business cycle….
Anne Lloyd,
Executive VP, CFO and Treasure
Martin Marietta Materials

9. ©CIMA 9
Addressing the Skills Gaps
CIMA(2009) Improving decision making in organizations – the opportunity to reinvent finance business partners,

10. Finance Transformation towards Value Creation
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Understand the motive for change in business organization
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Dual focus – from efficiency initiatives to performance management and business analytics to support decision making for planning and growth strategies
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Pursue finance transformation towards value creation on driving growth and profitability ©CIMA 10

11. How Business Partnering Support Business
©CIMA 11
CGMA(2012), From Ledgers to Leadership- a journey through the finance function

12. Journey to Value Creation
©CIMA 12
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Automate ,standardize and streamline processes
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Analyze information in identifying risks and opportunities
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Use fact-based data to support decisions
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Emphasize the theme of getting positive outcomes towards achieving company objectives
MAXIMISED
Efficiency of
business
operation
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DRIVE Analytics
IMPROVE
Decision
Making
ENABLE
Value
Creation
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3
4

13. Business Analytics ©CIMA 13

14. Focus on Analytics ©CIMA 14
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Metric and Dashboard reporting
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Historical Trending
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Rolling Average Forecasting
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Scenario Planning
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Predictive modelling

15. Focus on driving Growth Strategies and Profitability ©CIMA 15
Supply Chain metrics
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LIFR, OFR, discounts % and Price % Promotion effectiveness Channel effectiveness
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Key growth platforms
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Products and customers profitability
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Market growth /Market Shares

16. How about Business Partnering in SMEs? ©CIMA 16

17. 50% Business Analytics and 20%
Decision Support
20% Management Reporting 10%
20% Transaction Accounting 50%
10% Management Control 20%
IBM 2010 CFO study
*Best Benchmark
SME Study
CIMA2011 Finance Transformation SME study

18. How well is the SME Finance function supporting decision making and infusing greater value for business? ©CIMA 18

19. What are the challenges? ©CIMA 19

20. What are key priorities for SME? ©CIMA 20

21. Business Partnering in SME
©CIMA 21
CGMA(2012) , The Inside Track; Partnering for value

22. Role of Management Accountants ©CIMA 22
CIMA(2014) Global Management Accounting Principles Consultation Paper

23. Value Creation
©CIMA 23
Three Major Principles:
 Data Analytics to create tactical plan for execution
 Scenario Analysis in identifying risks and values of opportunities
 Engagement with stakeholders to drive better decisions about strategy execution at all levels
CIMA(2014) Global Management Accounting Principles Consultation Paper

24. “HOWEVER, BUSINESS PARTNERING ROLES PUT THESE VALUES UNDER STRESS, WHICH IS WHY THESE ROLES REQUIRE MATURITY, STRENGTH OF CHARACTER AND SKILL IN DEALING WITH BUSINESS PARTNERS. DOMINIC P MOORHEAD, PRESIDENT EUROPEAN OPERATIONS, CARIS LIFE SCIENCES 2011
The role of Finance evolves from focusing on cost and process efficiencies and the catalyst in improving business performances to becoming the business partners to create further value. ©CIMA 24
Dominic P Moorhead, President European Operations, Caris Life Sciences – CIMA’s ‘From ledgers to leadership’ report

25. As a Management Accountant, we need to understand the business drivers, strive further towards the development and implementation of the partnering role with increased focus on management efficiency and value creation. ©CIMA 25

26. THANK YOU
©CIMA
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