Masters Of Finance

Outlook
Point of View
May 2006, No. 2

Finance & Performance Management

What the finance masters know: Mastering the finance capabilities that support high performance
By Paul Boulanger and Gordon Stewart
Paul Boulanger is an Atlanta-based senior executive in the Accenture Finance & Performance Management service line. paul.a.boulanger@ accenture.com Gordon Stewart is a Hartford,Connecticutbased senior executive in the Accenture Finance & Performance Management service line. gordon.a.stewart@ accenture.com

Facing a growing number of internal and external demands, businesses and governments are increasingly turning to their finance organizations to help them on their quest to reach high performance. They are asking their chief financial officers to spend ever-greaterproportions of their time on matters of strategy and leadership, while also intensifying their focus on finance and accounting basics in response to heightened regulatory scrutiny and transparency issues. In light of this increasing reliance on finance, what essential capabilities and competencies must finance organizations master so that they make the most significant contribution to high performance?Based on a recent wide-ranging study* conducted by Accenture of more than 200 organizations in the public and private sectors, we have identified a number of the essential capabilities that should be sought by those aspiring to be “masters of finance.”

metrics. So finance executives must be able to discern what drives current and future value, and then help make the essential linkages betweenfinancial capabilities and long-term performance. In this way, the finance organization helps decision makers understand strategic, tactical and operational levers in economic terms. This is crucial to maximizing shareholder return—and it enables the finance organization to help the enterprise respond more effectively to changing business conditions. High-performance finance organizations excel atboth the macro and micro levels. On the one hand, they are able to drive finance excellence through multiple levels of an organization and its culture. On the other hand, most high-impact finance organizations have mastered the details, as well. Few of the high performers suffer the ill effects of highly distributed back office functions or disaggregated systems environments, for example. Thissuggests that getting the fundamentals right is a prerequisite for high performance. Cleaning up operations, standardizing processes and segmenting operations into shared services are necessary so that finance can move beyond its traditional focus on statutory and compliance issues, and instead can focus on driving overall business performance.

Managing for value
Our research has demonstrated a highcorrelation between those companies that have worked to develop high-performance finance organizations and those that exceed their peers in overall business performance. The empirical evidence suggests that the best finance organizations contribute directly to the manner in which the organization as a whole maximizes its value in its industry. Such value is not measured simply as earnings pershare. In the marketplace, stock price is based on expectations of future cash flows adjusted for risk, not on traditional accounting

Essential finance and performance management capabilities
Finance mastery incorporates a framework of five essential finance capabilities. 1. A value-centered culture is one in which employees make conscious decisions about which

* Expanded case studies, as wellas the essential capabilities of finance mastery, are explored in more detail in a new book
from Accenture: CFO Insights: Delivering High Performance, by Mike Donnellan and Mike Sutcliff (John Wiley & Sons, 2006).

strategies to pursue and how to deploy resources to optimize value for multiple stakeholders. Finance masters foster a value-centered culture that motivates and enables employees...