One of the most important support functions in any organization is the finance function. After all, this position maintains relationships with all organizational units and simultaneously operates at the management team level. Therefore, it is important that this position transforms into a High Performance Finance (HPFF) position so that it can lead the transformation of the organization into a High Performance Organization (HPO). Becoming an HPFF is important anyway because the organization is placing increasing demands on the finance function, as the need for high quality real-time management information and strategic analysis is increasing in the present day. That is why management expects the financial function to make an explicit contribution and to provide more added value.
“When the finance function asks its internal customers how satisfied they are with the finance function, what criteria should that assessment be based on?“
Based on a study of the scientific and (particularly) professional literature, we have made a list of:
Both lists are listed in alphabetical order, so not yet according to importance or effectiveness. Finance experts ranked the list of performance criteria by “importance” based on their experience, with the most important at the top and the least important at the bottom. “Important” means that a certain performance criteria, according to the experts, measures an activity of the finance function that, if the finance function performs well on it, can help the internal customer itself perform better. In addition, we asked the experts to assess the effectiveness of the list of relationship promotion campaigns. In other words, which action will most promote and improve the relationship between the finance function and the other departments within the organization so that the satisfaction of those departments with the finance function will be increased. For the sake of clarity: this is not a question of interpreting the much-mentioned ‘business partnership’ of the financial function, because it generally concerns the implementation of what the financial function itself must do towards the rest of the organization. Relationship promotions are about what both the finance function and the other departments can do in reciprocity to promote their relationships together. Performance criteria or relationship promotion actions can be added to both lists, which the experts encounter in practice but are missing in the first lists.
The table below lists the fifteen qualitative criteria against which the performance of the finance function, according to both the internal customers (the managers from the business) and the financial professionals, should be assessed, given and explained. The most important criterion has been put at number 1. The performance criteria are ranked in order of importance as indicated by the managers. For the sake of completeness, the ranking of the financial professionals is also given, to illustrate the high degree of consensus between the two groups.
|Ranking managers||Performance criteria||Ranking Finance Professionals|
|1||The finance function understands the business and its needs.||1|
|2||The finance function advises on which parts of the organization to focus on in order to create more value.||2|
|3||The financial function provides timely insight into how the organization is doing.||3|
|4||The finance function is explicitly involved in strategic decision-making in the organization.||5|
|5||The finance function explicitly contributes to achieving the objectives and results of the organization.||4|
|6||The finance function brings financial expertise into the discussions that take place in the organization.||6|
|7||The finance function is able to explain financial matters well to the managers.||7|
|8||The activities of the finance function are explicitly linked to delivering added value to the organization and achieving the organizational objectives.||8|
|9||The finance function responds quickly to the needs of the business.||11|
|10||The finance function is explicitly involved in the operational decision-making in the organization.||10|
|11||The finance function supports management in propagating the leadership vision and how organizational performance can and should be achieved.||9|
|12||The organization’s control framework (internal control) is well set up and maintained by the finance function.||12|
|13||The finance function helps build consensus across the organization about the organization’s key risks, opportunities, and priorities.||13|
|14||The finance function helps the organization deal with and work well on business challenges.||15|
|15||The finance function is part of and actively participates in the management team of the organization.||14|
The following table lists the ten most effective relationship promotion actions, again ranked in order of effectiveness as indicated by the managers. For the sake of completeness, the ranking of the financial professionals is given, to illustrate the high degree of consensus between the two groups.
|Ranking managers||Relationship promotional activities||Ranking Finance Professionals|
|1||Jointly develop and interpret performance indicators and management reports together, so that there is mutual understanding about what the important issues within the organization need to be managed.||1|
|2||Ensure that the business has a good understanding of finance, so that the business and the finance function speak more of a common language, which prevents misunderstandings and misunderstandings and also ensures that the management reports are better used within the organization.||2|
|3||Carry out important processes together, so that both financial and business expertise are present within these processes and both groups get to know each other better and can complement each other.||3|
|4||Make clear what the added value of the finance function is by explicitly linking its activities to where and how added value is created within the organization.||4|
|5||Carry out joint improvement projects, programs and training, so that both financial and business expertise are present within these projects and programs and so that both groups get to know each other better and can complement each other.||5|
|6||Organize regular cross-business and cross-functional meetings with the finance function and the business to jointly discuss what is going well and what could be improved in the organization.||6|
|7||As a financial function and business, jointly discuss and manage the end-to-end processes in order to jointly keep an eye on the ‘big picture’.||7|
|8||As a finance function, decide together with the business on the content of the business partner role of the finance function so that it closely matches the needs of the business.||8|
|9||Ensure that the finance function is emphatically present and actively participates in organizational decision-making so that the finance function and the business have a strong joint presence at every step of that decision-making process.||10|
|10||As a finance function and business, create a shared understanding of the roles, responsibilities, challenges and needs of the finance function and the business.||9|