Accenture has been conducting painstaking research into the factors that distinguish high-performance finance organizations since 2004. Now the global consulting and services firm has completed the latest installment of that effort, a white paper titled "The Changing Role of the Finance Organization in a Multi-Polar World: Accenture High Performance Finance Study 2008."
One section of the study examines in detail the practices of a group of companies Accenture calls "finance masters" -- organizations that scored highly across five major capability areas: finance organization management, enterprise performance management, finance and accounting operations, enterprise risk management, and corporate finance.
Among the findings:
• High performers are more focused on strategic business issues than operational details. Here’s how masters and non-masters allocate their time:
| Non-masters | Masters | |
| Managing finance and accounting operations | 37% | 25% |
| Planning and developing enterprise strategy | 15% | 20% |
| Addressing workforce effectiveness | 10% | 16% |
| Managing the performance of the overall enterprise | 18% | 15% |
| Interfacing with the board of directors/investor relations | 9% | 12% |
| Overseeing enterprise risk management | 9% | 11% |
| Other | 2% | 1% |
• They invest in advanced capabilities. Where is the extra time for these strategic contributions coming from? Quite possibly, from freeing up finance pros from time-consuming manual tasks. Finance masters were more likely to have undertaken the following initiatives:
| Non-masters | Masters | |
| Implemented advanced and integrated risk management processes and technologies | 20% | 42% |
| Implemented advanced enterprise performance management capabilities | 17% | 31% |
| Implemented or expanded their ERP systems | 46% | 50% |
| Conducted a finance benchmarking study to assess quality and efficiency compared to similar enterprises | 35% | 50% |
| Completed standardization to ensure that finance processes are consistent across the enterprise | 41% | 54% |
| Developed and implemented a finance organization strategy that addresses organization, processes, technology and alignment with organizational strategy | 55% | 62% |
• They adopt leading finance workforce practices. The study examined respondents' use of about 30 workforce practices that Accenture regards as critical, and found that high-performance firms were more likely to employ nearly all of them. Here are the five areas that revealed the biggest differences between the two groups:
| Non-masters | Masters | |
| Formal finance competency model is in place to define required skills | 28% | 62% |
| Formal finance competency model is in place to define different career levels | 24% | 58% |
| Finance leadership encourages innovation and provides employees with opportunities to share ideas | 37% | 71% |
| Well-defined talent selection process is in place | 24% | 54% |
| Individuals are encouraged to proactively seek training on new topics and technologies | 33% | 62% |
• They focus on value creation. Masters focus sharply on pursuits that are most likely to improve the organization's overall performance:
| Non-masters | Masters | |
| Managers and executive team mostly or completely have access to information they need to monitor and manage performance and create value | 50% | 92% |
| Executive team mostly or completely understands information needed to manage performance and create value | 69% | 90% |
| Managers mostly or completely understand information needed to manage performance and create value | 50% | 87% |
Accenture's analysis of best-in-class finance practices is just part of the massive research effort reported in the white paper, which also explores the major opportunities and challenges facing finance executives today and how those relate to the most powerful force impacting all businesses: globalization.
The emergence of what Accenture calls the "multi-polar world" has deep implications for every aspect of corporate strategy. In workforce planning, for example, how many companies have given serious thought to how they're going to integrate workers from around the world, and from different cultures, into their organization?
Globalization is driving companies toward more comprehensive risk management programs, too, according to Accenture. And it's not just the risks arising from the proliferating tax and regulatory compliance challenges that companies face as they venture overseas, although these are substantial -- it's currency risk, political risk, supply chain risk, and a host of other threats that are driving enterprise risk management. Companies with the most advanced risk-management capabilities are more likely to report a positive impact on their financial results from such initiatives -- 35 percent, versus 27 percent for run-of-the-mill organizations.
The multi-polar world will test finance organizations' skills and resourcefulness, but for organizations flexible enough to deploy high-performance practices, the opportunities may well outweigh the risks.