Inevitably, there will be areas where we are much more in the domain of the ‘from’ rather than the ‘to’ and therefore need to address those strategic gaps. There are some organizational interventions that can actually mobilize change. For example, in terms of strategy, consider developing a new vision and brand for finance, supported by a review of its strategy and of what value-added activities you want to be in, potentially supported by some benchmarking against finance teams elsewhere. As regards structure, it may be useful to simplify it and even remove a layer. When it comes to skills, consider training/coaching, 360-degree feedback and performance management, recruitment and maybe redundancy. As for style, team-building workshops can help. And finally, in terms of systems, think about reengineering business processes and reviewing IT processes.
All of these interventions need to be properly project-managed – ideally by allocating them to a specific project manager. This would need to be managed at ‘meta-level’ – sometimes called ‘programme-level’ – almost certainly by the FD. Success will depend to a large degree on the extent to which this is communicated, explaining the ‘why’ as well as the ‘how’.
The scale of the change required modernizing finance so that it really adds more value to the organization may seem daunting but, with the right processes in place, there is every chance that in 18 months a carefully thought-through programme will be substantially on its way to delivering value.
FD should ask themselves: is there a really big prize? How difficult will it actually be? What support do I have for it and from where? Have I truly the stomach for it?
Talk about adding value. With the focus these days on customer experience and with businesses having to be customer centric, it’s important to be able to understand what we actually mean by value and what the customer sees as valuable to them.
The key benefits to a business of adding value include:
Added value allows firms to market their products more successfully,
Emphasizing strength of brand as opposed to a commodity. They can charge higher
Prices, achieve a USP and obtain competitive advantage. Higher added value
Products are less price-elastic and harder to copy
A business that successfully adds value should find that it is able to operate profitably, Remember the definition of adding value: where the selling price is greater than the costs of making the product.
Added value is important because as the added value would be increasing the business would be earning more money. All the business are striving to achieve this objective by lowering the cost of the material and increase the value of the product by adopting different marketing techniques
Dada Suraju Adefolami, Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: [email protected]; 08052043855
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