Financial executives say they're more focused than ever on planning and cost cutting. What's surprising is a reluctance to adjust the finance function's structure.
All eyes are on corporate-finance departments as they are asked to cut costs, re-assess risks and cope with the deep uncertainty generated by the current economic crisis. In this survey, we asked finance and other senior executives how their finance departments have changed since the crisis began; what new challenges these departments are facing; which activities are taking up more, and less, of their time; whether their centralization or outsourcing plans are being modified; and how the CFO's focus has shifted.
The results suggest that, at least so far in the current economic crisis, not many companies have made the kinds of structural changes that could most help the finance organization boost its performance. Few respondents report that their companies have modified the organizational structure to give CFOs formal responsibility for more activities through solid-line reporting relationships. Fewer still report any increase in the degree or pace of centralization. Moreover, few respondents report plans to increase the outsourcing or offshoring of finance activities.
What does finance do?
We defined four possible roles for the finance function in a corporation. At one end of this spectrum, the function focuses primarily on reporting and compliance, with most of its time devoted to transaction management in financial accounting.
At the opposite extreme, finance serves as an integral part of the management team to support the creation of value by identifying opportunities and providing critical information and analysis to make superior operating and strategic decisions. The largest group of respondents report that in their organizations, the finance function falls into the latter category, though--not surprising--the function's role varies considerably across industries.
CFOs in manufacturing, for example, are significantly more likely to be value managers than those in the financial services industry, where the finance staff focuses more on transactions.
Respondents note a marked increase in the amount of time CFOs are spending in areas that are critically important during a crisis--particularly, financial planning and analysis, financial-risk management, strategic planning and credit decisions. These areas of responsibility are quite consistent with the most pressing challenges that respondents say finance staffs face: forecasting business results for upcoming periods (31%), implementing cost-saving measures (27%) and freeing up cash from working capital (18%). CFOs are spending less time on responsibilities more easily left to others.
The full article can be found on the link above. Here is a great opportunity for HR & Finance to really partner together in these very difficult times.
