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The 2011 Accenture High Performance Finance Study set out to explore whether the finance function has the capabilities to help the organization it supports achieve growth.
The research included the ASEAN (Association of South-East Asian Nations) region, and this article explores the findings as they reveal the current status of the finance function there.
During the recent financial crisis and subsequent global economic downturn, the finance organization—perhaps more than any other corporate function—took center stage in helping enterprises shape and implement their responses to a vastly changed business environment. Many CFOs enhanced the standing of their finance organizations through the leadership they provided in very challenging times.
Today, the finance organization faces a new set of challenges in its quest to help the larger enterprise achieve its strategic goals and achieve high performance. But does the organization have the capabilities necessary to do so notwithstanding its success during the downturn?
The 2011 Accenture High Performance Finance Study was designed to explore this topic. It was based on comprehensive surveys of more than 530 finance executives and approximately 300 C-level executives at large, global organizations, as well as in-depth interviews with finance executives and chief operating officers at leading companies. Included in the study were 47 finance executives representing companies from the ASEAN region.
ASEAN finance executives were markedly less satisfied with the performance of their functions in the five key areas of finance: risk management; enterprise performance management; finance and accounting; finance function management; and corporate finance.
ASEAN finance executives believe continued market and economic volatility and attracting and retaining top finance talent are having the greatest impact on their finance organization.
45 percent of ASEAN finance executives (and 50 percent of global executives) said their focus remains on cost cutting—but 34 percent believe the finance organization will focus on growth in the future.
The best-performing finance organizations—those we call “finance masters,” are more likely to be focusing today on an even split between growth and cost control (39 percent, versus 26 percent of non-masters).
In the next 12 months, masters plan to strengthen the focus of their finance function on a balance between cost control and growth (54 percent), while only 12 percent believed they would be focused on cost control.
Overall, advanced finance capabilities were less prevalent in ASEAN companies than in companies globally, leading ASEAN executives to be less satisfied with the performance of their finance organization than their global counterparts.
Compounding the issue of lack of maturity in finance capabilities are significant environmental challenges facing ASEAN companies—including new and changing regulations; continued market and economic volatility; attracting and retaining top talent; and managing the avalanche of data being generated. These challenges add up to more complexity for the finance organization to address.
Given the current environment, ASEAN CFOs may have to rethink their focus on finance cost reduction and selectively invest in capabilities to respond to challenges, meet the expectations of their internal customers and deliver greater value to the enterprise.
Finance masters excel in the capabilities and practices that help the larger enterprise grow in a volatile global economy.
The lessons derived from the past few years—as well as from our research— are clear. A high-performance finance organization can be an essential catalyst in a company’s or government’s pursuit of high performance overall, and is highly valued in the C-suite as a key enabler of enterprise performance.
The relative success of the best finance organizations in the past three years is largely the result of effective cost and risk management. While these will remain essential capabilities, they will not be enough to ensure continued high performance. As markets stabilize and growth opportunities return, finance must balance its focus on cost and risk with additional capabilities to capture the opportunities and meet the challenges of the next few years.
Based on this research and its experience, Accenture sees seven themes driving the finance agenda for 2012 and beyond:
Support a growth agenda.
Develop a flexible and responsive finance operating model.
Attract and retain top-flight finance talent.
Translate data into insight.
Continue to focus on operational excellence.
Assure regulatory compliance.
Ensure optimal cash and capital allocation.
March 26, 2012
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