Posted by Ryan Senter on Thursday, January 22, 2015 - 12:58
For finance functions in organizations across the country, the frequency and intensity of business challenges are at an all-time high.
As busy as finance functions are, it is essential that they tackle these tasks in an intelligent and focused manner. The results of the 2015 Finance Priorities Survey from the Financial Executives Research Foundation and Protiviti show where the best minds are directing their attention.
In addition to the core business priorities of effective cash management, business intelligence and analysis, and forecasting, finance functions are investing significant effort in assembling talent with new skill sets. Specifically they are placing unprecedented priority on "soft skills" – such as communication, collaboration and team building – because of a growing realization that, in an increasingly agile and mobile marketplace, such skills are just as vital as technical skills for success.
Among all survey respondents, there is an emphasis on working capital management capabilities, driven by a desire to be able to respond to economic volatility with greater flexibility. Just as important, there is a focus on fortifying this capability to ensure against complacency and "loose" standards during times of prosperity.
Such diligence is evident in the response of survey participants who ranked the following among their "significant" priorities, meaning they scored a 6.0 or higher on the Priority Index: period-end close (6.9 vs. 6.7 a year ago); working capital management (6.5 vs. 6.2); accounts receivable (6.3 vs. 5.6) and invoicing/billing (6.3 vs. 5.5).
The marked increases in transactional processes, including accounts receivable and invoicing, underscore finance functions' intent to stay focused on fundamentals while keeping pace with the growing list of responsibilities related to revenue-generation activities. Shoring up these issues also enables finance to provide key stakeholders and senior management with continually updated, end-to-end view of performance, from forecasting to reporting. These days, such execution needs to be the rule, not the exception.
In terms of financial analysis priorities, survey respondents ranked as their top three: strategic planning, budgeting and periodic forecasting. All three are essential elements in helping finance achieve sharper, real-time clarity on performance, cash positions and profitability.
This year's finding that finance is placing a strong emphasis on risk management also suggests the function is increasingly working hand-in-hand with other departments to align strategy, risk management capabilities and performance management processes.
Ultimately, however, finance's mission cannot be achieved without establishing proper leadership, especially as challenging emerging issues such as evolving healthcare regulations, sustainability and globalization dominate agendas. It is becoming readily apparent that finance executives and professionals are redefining leadership by placing a hard value to what traditionally have been considered soft skills.
Indeed, what may be most noteworthy in this year's survey results are the across-the-board increases in the Priority Index numbers of organizational capabilities. For instance, “working effectively with regulators” scored 5.8 on this year's index compared with 5.1 a year ago. Meanwhile, leadership (6.4), change management (6.2) and personnel performance evaluation (6.0) ranked as the three most important organizational capabilities.
In the survey, a financial reporting director of a healthcare organization aptly summarized not only appreciation for such skills, but their immediate need: "Leadership can positively (or negatively) affect how well an organization evolves. Effective leadership facilitates effective change management – which, in turn, helps an organization remain dynamic. We need to invest in our people to make sure they are engaged with the vision/mission of our organization. That only happens when you have good managers who make time for and mentor staff."
To view the full research findings, download the 2015 Finance Priorities Survey report. You also can compare your organization's priorities with your peers’ using Protiviti's complimentary benchmarking tool.