3.2 Contemporary transformation of the finance function Flashcards
1
Q
The updated information to impact framework shows (pg 62):
A
- Tech and automation will play an important role in all activities of FF but will have largest impact on assembly and analysis activities
- This will free up FF resources to focus on advising and applying / executing activities
2
Q
The FF will need to develop it’s competencies:
A
- firstly, so that it is able to use the up to date technology
- secondly, so that it has the necessary skills to provide influence and impact required
3
Q
The FF is well positioned to meet this change:
A
- it has a unique end-to-end view of the org and understands every activity has a financial impact
- its accounting info is trusted and credible
- it already provides a framework for performance management
- it bring professional, evidence based objectivity to decision making
4
Q
Due to globalisation and technology the shape of the FF is changing from: (pg 63)
A
- a hierarchical triangle (traditional shape) - contains a broad base of finance workers reporting upwards to a series of narrowing management levels
- to a segregated triangle (last 20 years) - globalisation and technological advances meant much of the routine processing could be carried out by a shared service centre (bottom half of triangle)
- and finally the diamond shape (today’s digital age) - the triangular base has been eroded due to automation of many of basic activities
5
Q
The traditional hierarchical triangle in terms of the roles of the FF:
A
- Enabling - at the bottom of the triangle there is a broad base of finance workers carrying out the operational enabling roles of planning, forecasting and resource allocation
- Shaping how - in the middle there is a narrower set of management level finance workers who are reported to from the level below and carry out the shaping how roles of performance management and control
- narrating how - at the top is a narrower set of senior finance staff who are reported to from below and carry out the narrating how role of financial reporting
6
Q
The traditional hierarchical triangle is evolving into a diamond shape as follows: (pg 65)
A
- Tech automation has eroded the traditional triangular shape with much of the lower level assembly and processing tasks now being automated
- The central bulge is due to many of the higher value services now being offered by centres of excellence (shared service centres) where finance professionals will work as part of a multi-disciplinary team
- The flat top shows a move to a collaborative finance leadership approach with the CFO working alongside CEO
7
Q
The four levels of the diamond shape: (pg 67*)
A
- Level 1 (top) - Senior finance team - Lead the finance team to achieve the desired org impact
- Level 2 - Strategic bus partnering - work with internal and external stakeholders to influence and shape how the org creates / preserves value
- Level 3 - Digital centres of excellence - Specialists generate further insight about value creation and preservation in areas of specialism
- Level 4 - Smart finance factories - assemble and extract data to provide info and preliminary insight
8
Q
Three main reasons why the shape of FF is changing:
A
- The changing mandate for finance - shift in focus to level 2 strategic bus partnering (results in bulge)
- Technology - automation of many of management information processes and much of reporting at level 4 and has increased the need for skills at levels 2 and 3
- Finance function capability - The above two reasons have changed the competencies required (level 2 is the focal point for these changes and another reason for bulge)
9
Q
The FF will continue to evolve in response to changing roles of FF:
A
- There will be an increasing emphasis on professional level roles requiring support and management skills
- There will be a continued emphasis on specialist knowledge leading to formation of multi-disciplinary teams who will become members of finance team
