It’s not just about the bottom line anymore, with businesses needing to focus on other global, national and local issues too. This applies just as much to SMEs as it does to larger companies.
There’s a real temptation that organisations and economies will focus solely on financial implications, when responding to the terrible damage caused by the destructive virus COVID-19.
I truly understand why companies may think like this, but to do so may harm their reputation, as well as their overall financial health, many years down the line. And to ignore other important issues, could also affect society for years to come too.
Whatever the size of the business, it is important not to take a narrow response to broader issues, as this could be detrimental to their overall financial performance.
As a society, we are now expecting our businesses to be more ethical in their approach. We can no longer afford to ignore issues such as climate and resource constraints.
Not only are employees demanding a more ethical and purpose-driven approach, but so are customers and investors. And within an organisation, the financial wizards and leaders are not immune to these trends either.
More to the point, these trends, issues and societal requirements are becoming increasingly at the centre of a company’s decision-making process.
Performance and insight are domains that we rightly occupy. The culture of organisations is changing ‘ and that goes for small and medium size enterprises as well.
Customer-centricity requires agility, which in turn demands cross-organisational collaboration. With regards to this, the finance community is best placed to assume a central position.
Much of the finance activity has focused traditionally on reporting the historic which is, perhaps, inappropriately backward-looking in this new modern economic environment.
Finance teams need to deliver new insights in more relevant ways, in order to address the business needs of today.
In fact, a failure to do so threatens to marginalise the function of finance, and would open the door for shadow organisations and other groups to exploit the demand for this new approach.
Much attention has focused on the finance business partner: Individuals, or a group of individuals, who are considered the conduit between finance and its stakeholders.
However, what role do they play and how should they respond to this changing dynamic?
The changing role ofthe finance professional
The Association of Chartered CertifiedAccountants (ACCA) and PricewaterhouseCoopers (PwC) decided to conduct a survey to explore current perceptions of the roles and the extent of the opportunities.
This involved organising workshops and undertaking interviews with leading finance professionals.
The opportunities open to accountancy and finance professionals were reflected in six hypotheses, which suggested a future direction of travel for this community.
This has been highlighted through the contribution that these individuals have played in the context of the current business turbulence.
Having the agility to support and influence decision-making in rapidly changing times, supported by access to robust data sources, gives an organisation wide insight.
The important skills of adaptability and trust come to the fore in situations such as this because technology and data, on their own, is not the complete answer.
The survey showed that while most of the respondents claimed that finance business partnering was a proactive role, in their respective organisations, only 37% reported that it was truly embedded.
The two most valued aspects of the role were the ‘support of business strategy’ and the ‘analysis of current performance’. This suggests that finance professionals might not yet be achieving the forward-looking vision, on which the future of the finance function may well depend.
Finance businesspartnering in small and medium-sized enterprises
While larger organisations tend to have formalised teams and resources devoted to business partnering, it is important that small and medium-sized enterprises (SME) also take this role seriously.
This is reflected in the broad consistency of survey responses between those who identified themselves as working for large organisations, and those who described their outfits as being an SME.
While it has a greater level of importance for the larger entities, over half of SMEs indicated that it was either embedded or fundamental in their companies too. The result being 54% of SMEs, compared to 63% for larger entities.
The attributes of the business partner, in smaller organisations, were also broadly similar.
However, it is important to note that the analysis of current performance was a strong factor for groups of all sizes.
The challenge for SMEs is to be able to invest enough in both data and people skills, in order to achieve the level of analysis and interaction required.
The advent of more scalable software applications, which use cloud technologies, means that valuable data is more accessible for this group than ever before ‘ and that’s great news.
This creates the opportunity for an even greater development of these insights. It becomes a question of having the right talent, in combination with other key roles, to be able to generate the all-important strategic insight.
Recognise that the mind set needed to generate insight is equally vital in SMEs as it is in much larger organisations.
For medium-sized entities, it is important that partnering and insight is part of the overall mind set, but they do not necessarily require a formalised structure.
Develop an approach to insight and analysis that yields results for the SME. Accept that this might involve external parties, such as a specialist practitioner. Take note that this is especially true for the smaller enterprises.
Use technology and available data to develop a business model which supports business activities. Remember, that the ‘digital core’ of an organisation involves cloud-based applications relevant to its sector.