CIMA E1 - CHAPTER 6
TRANSFORMING THE FINANCE FUNCTION
RECONFIGURATION/ BUSINESS PROCESS RELOCATION BUSINESS
REARRANGING RE-ENGINEERING PARTNERING
(BPR)
Offshoring
Changing the structure & Ac9vi9es that Developing successful, long-
• relocation of a business
organisa0on of the finance are ordered in process to a country that las0ng strategic partnerships
a certain way usually has a lower cost base within the organisa0on or
func0on depending on
to achieve a Nearshoring with external par0es
task.
• offshoring to a nearby
business organizational country
environment strategy Finance acts as a business
Outsourcing partner to other
BPR is the analysis & design of
the op0mum processes to • delegating part of a process departments through
organizational life cycle to an external provider
structure stage rethink how organisa0ons
operate in order to make An
P Reduces costs. individual
drama0c improvements to
P Improves quality.
Main reason for performance. P Known fee.
reconfiguring/rearranging is P Management can focus on
cost reduc0on and the best the core of the business.
way to do it is through a OR
shared service centre.
Ñ Lack of control.
Ñ Dependent on an external
provider. Mul9-
Ñ Lose internal exper9se. disciplinary
Ñ External party has less teams
Taking finance teams from
divisions around the understanding of the
organisa9on & bringing business.
them together in one Ñ Loss of confiden9ality
OR
central department
BPR brings about
• Automa9on
• Improvement in speed
• Improvement in quality of info A mixture
• Reduc9on of error of both
• Ensure compliance with law &
regula9on.
This is usually achieved Changing Role of the CFO
through deployment of & Business Partnering
sophis9cated systems More complex,
which can be expensive require higher
and have a significant skill levels,
Pros Cons impact on staff.
BeLer to
outsource these remain inhouse.
• Technology is allowing
the more repe99ve
tasks as they are tasks to be automated.
simple, • Info about financial
shared expertise
lack knowledge of straighNorward & posi9on is more
divisional business readily available.
central control needs don’t require
wide knowledge • Finance func9on can
errors in work
Lower costs of business. move more towards
y
Takes control awa planning & decision
from divisional
s
organisational focu manage rs
making.
• CFO works closer with
the CEO to set
strategies.
TRANSFORMING THE FINANCE FUNCTION
RECONFIGURATION/ BUSINESS PROCESS RELOCATION BUSINESS
REARRANGING RE-ENGINEERING PARTNERING
(BPR)
Offshoring
Changing the structure & Ac9vi9es that Developing successful, long-
• relocation of a business
organisa0on of the finance are ordered in process to a country that las0ng strategic partnerships
a certain way usually has a lower cost base within the organisa0on or
func0on depending on
to achieve a Nearshoring with external par0es
task.
• offshoring to a nearby
business organizational country
environment strategy Finance acts as a business
Outsourcing partner to other
BPR is the analysis & design of
the op0mum processes to • delegating part of a process departments through
organizational life cycle to an external provider
structure stage rethink how organisa0ons
operate in order to make An
P Reduces costs. individual
drama0c improvements to
P Improves quality.
Main reason for performance. P Known fee.
reconfiguring/rearranging is P Management can focus on
cost reduc0on and the best the core of the business.
way to do it is through a OR
shared service centre.
Ñ Lack of control.
Ñ Dependent on an external
provider. Mul9-
Ñ Lose internal exper9se. disciplinary
Ñ External party has less teams
Taking finance teams from
divisions around the understanding of the
organisa9on & bringing business.
them together in one Ñ Loss of confiden9ality
OR
central department
BPR brings about
• Automa9on
• Improvement in speed
• Improvement in quality of info A mixture
• Reduc9on of error of both
• Ensure compliance with law &
regula9on.
This is usually achieved Changing Role of the CFO
through deployment of & Business Partnering
sophis9cated systems More complex,
which can be expensive require higher
and have a significant skill levels,
Pros Cons impact on staff.
BeLer to
outsource these remain inhouse.
• Technology is allowing
the more repe99ve
tasks as they are tasks to be automated.
simple, • Info about financial
shared expertise
lack knowledge of straighNorward & posi9on is more
divisional business readily available.
central control needs don’t require
wide knowledge • Finance func9on can
errors in work
Lower costs of business. move more towards
y
Takes control awa planning & decision
from divisional
s
organisational focu manage rs
making.
• CFO works closer with
the CEO to set
strategies.
