Last week, I shared the key findings of the Accenture 2011 High Performance Finance Study. This week, I’ll talk about our recommendations for insurers as they position their finance function to deliver greater value to the enterprise.
As mentioned last week, we believe that it’s time for insurance CFOs to shift from a cost reduction approach to a growth agenda. There are four implications of doing so:
1. Several finance capabilities are ripe for maturity. In our study, finance executives were least likely to identify certain functions as “highly advanced”: workforce management, strategic planning, and performance reporting and analytics, to name a few. Insurance CFOs should find ways to improve the maturity of these capabilities.
2. As CFOs look for ways to improve, they must also ensure that their foundation capabilities are solid. Our study found that companies that excel in core accounting capabilities are more likely to have advanced capabilities in target setting, values orientation, budgeting and forecasting, and managing business risk.
3. Insurance CFOs should prioritize areas of investment. When it came to performance metrics, we observed a gap between the importance placed on that metric and the satisfaction with the organization’s capabilities. The top three priorities that emerged from our study were:
- Implementing or expanding enterprise resource planning (ERP) systems (49 percent).
- Completing standardization to ensure consistency across the enterprise (43 percent).
- Conducting finance benchmarking to assess quality and efficiency (35 percent).
4. CFOs should consider investing in areas that are important to top management. Accenture research found that internal customers are more likely to focus on mergers and acquisitions, as well as sustainability. By investing in these areas, CFOs can better meet their internal customers’ expectations and contribute to overall business strategy.
Next week, I’ll discuss the challenges facing the insurance finance function, as well as recommendations for how to address them.
To learn more, download Redefining High Performance in the Insurance Finance Function (pdf; opens in a new window).