Organisation – ops, sales & marketing, HR, IT & finance
The finance function:
Enables – planning, forecasting & resource allocation
Shapes how – performance management & control
Narrates how – financial reporting
CIMA 5 Ethical Principles
Integrity, objectivity, professional competence & due care, confidentiality & professional behaviour
Mendelow’s power interest matrix of power & interest is used for determining who the dominant
stakeholder is
Corporate Social Responsibility – benefits, which should increase long term profitability
Method of differentiation
Attract & retain high calibre staff
Brand strengthening
Lower costs
Identification of new market opportunities & changing social expectations
Corporate Governance – guidelines
Use of AGM
Board
Chairman & CEO
NEDs
Nominations, remuneration & audit committees
Finance activities from information to impact
Assemble – information – analyse - insight – advise – influence – apply - impact – acumen
To summarise, it is reporting, then questioning, developing & then deploying solutions
Data
Data is raw unprocessed facts & figures, by processing it we turn it into information to give it
meaning, then we can assemble & analyse it for insight.
Good information is accurate, timely, relevant, concise & cost effective
Financial data – quantitative in nature, can suffer from poor data sampling or evaluation, or it can be
inappropriately presented.
Non-financial – can be quantitative or qualitative, qualitative data requires judgement, as it’s
subjective in nature, you can attempt to transform it into quantitative data.
Types of business structure
Entrepreneurial – built around owner/managers
Functional – groups together employees that undertake similar tasks
Divisional – splits it into divisions based on their product or geography
Matrix – combination of functional & divisional
Historically finance focused on operational efficiencies & to reduce operational cost, technology
does a lot of this now, allowing them to focus more on value creation & revenue.
Shared service centres were driven by globalisation & advancements in technology, enabling the
automation of lower level tasks
Level 1 – senior finance team
Level 2 – strategic business partnering
Level 3 – digital centres of excellence
Level 4 – smart finance “factories”
Outsourcing finance operations – adv
, 1. Cost reduction
2. Shift resources from ops to innovation
3. Retained function can focus on role as business partners
4. Access superior capabilities & resources
Disadv
1. Loss of control
2. Time & cost to manage the service
3. Risk of data theft/breaches
4. Erosion of internal knowledge/skills
5. Disruption/resistance to change
Shared service centres are sometimes referred to as internal outsourcing
Level 4 – finance operations
Financial (corporate) reporting
Management accounting
Treasury management
Internal audit
Level 3 – specialist areas
FP&A
Taxation
Project appraisal
Project management
Level 2 – strategic partnering
Communicating insight to influence users
Business partnering
Level 1 – strategic leadership of the finance team
Lead key initiatives that support organisational goals
Execute & fund strategies set by the CEO
Liaise effectively with internal & external stakeholders
Cloud computing – adv
1. Flexibility & scalability
2. Cost efficient
3. Security
4. Flexible working
5. Environment
Disadv
1. Organisational change
2. Contract management
3. Security, privacy & reliance
Big data – volume, velocity, variety & veracity
Benefits of data analytics (McKinsey):
1. Fresh insight & understanding
2. Performance improvement
3. Improved segmentation & customisation
4. Better decision making
5. Innovation
6. Risk management
Data visualisation – 5 features of an effective data visualisation tool
1. Decision making ability
The finance function:
Enables – planning, forecasting & resource allocation
Shapes how – performance management & control
Narrates how – financial reporting
CIMA 5 Ethical Principles
Integrity, objectivity, professional competence & due care, confidentiality & professional behaviour
Mendelow’s power interest matrix of power & interest is used for determining who the dominant
stakeholder is
Corporate Social Responsibility – benefits, which should increase long term profitability
Method of differentiation
Attract & retain high calibre staff
Brand strengthening
Lower costs
Identification of new market opportunities & changing social expectations
Corporate Governance – guidelines
Use of AGM
Board
Chairman & CEO
NEDs
Nominations, remuneration & audit committees
Finance activities from information to impact
Assemble – information – analyse - insight – advise – influence – apply - impact – acumen
To summarise, it is reporting, then questioning, developing & then deploying solutions
Data
Data is raw unprocessed facts & figures, by processing it we turn it into information to give it
meaning, then we can assemble & analyse it for insight.
Good information is accurate, timely, relevant, concise & cost effective
Financial data – quantitative in nature, can suffer from poor data sampling or evaluation, or it can be
inappropriately presented.
Non-financial – can be quantitative or qualitative, qualitative data requires judgement, as it’s
subjective in nature, you can attempt to transform it into quantitative data.
Types of business structure
Entrepreneurial – built around owner/managers
Functional – groups together employees that undertake similar tasks
Divisional – splits it into divisions based on their product or geography
Matrix – combination of functional & divisional
Historically finance focused on operational efficiencies & to reduce operational cost, technology
does a lot of this now, allowing them to focus more on value creation & revenue.
Shared service centres were driven by globalisation & advancements in technology, enabling the
automation of lower level tasks
Level 1 – senior finance team
Level 2 – strategic business partnering
Level 3 – digital centres of excellence
Level 4 – smart finance “factories”
Outsourcing finance operations – adv
, 1. Cost reduction
2. Shift resources from ops to innovation
3. Retained function can focus on role as business partners
4. Access superior capabilities & resources
Disadv
1. Loss of control
2. Time & cost to manage the service
3. Risk of data theft/breaches
4. Erosion of internal knowledge/skills
5. Disruption/resistance to change
Shared service centres are sometimes referred to as internal outsourcing
Level 4 – finance operations
Financial (corporate) reporting
Management accounting
Treasury management
Internal audit
Level 3 – specialist areas
FP&A
Taxation
Project appraisal
Project management
Level 2 – strategic partnering
Communicating insight to influence users
Business partnering
Level 1 – strategic leadership of the finance team
Lead key initiatives that support organisational goals
Execute & fund strategies set by the CEO
Liaise effectively with internal & external stakeholders
Cloud computing – adv
1. Flexibility & scalability
2. Cost efficient
3. Security
4. Flexible working
5. Environment
Disadv
1. Organisational change
2. Contract management
3. Security, privacy & reliance
Big data – volume, velocity, variety & veracity
Benefits of data analytics (McKinsey):
1. Fresh insight & understanding
2. Performance improvement
3. Improved segmentation & customisation
4. Better decision making
5. Innovation
6. Risk management
Data visualisation – 5 features of an effective data visualisation tool
1. Decision making ability
