one finance - cima · by technology, shared services or business process outsourcing (bpo) centres....

ONE FINANCE

Building tomorrow’s talent strategy

– a discussion paper

CGMA REPORT

Supporting partner

ONE FINANCE – Building tomorrow’s talent strategy2

Two of the world’s most prestigious accounting bodies, AICPA and CIMA, have formed a joint venture to establish the Chartered Global Management Accountant (CGMA) designation to elevate and build recognition of the profession of management accounting. This international designation recognises the most talented and committed management accountants with the discipline and skill to drive strong business performance. CGMAs are either CPAs with qualifying management accounting experience or associate or fellow members of the Chartered Institute of Management Accountants.

Acknowledgements

Our thanks to Hays, a leading recruitment expert, for supporting this CGMA programme, and to all the finance and management executives around the world who have participated and generously shared their time and insights via the roundtables and interviews.

For more information on how Hays is powering the world of work by recruiting experts worldwide please visit www.hays.com

Join the conversation about #CGMATalent on the @CGMA Twitter feed

1

FOREWORD

“During the last few years there have been transformations in IT, working practices, statutory requirements and also changes in the expectations of support from the finance department. This has had a significant impact on talent management and succession planning as employers adjust their expectations of both team sizes and individuals’ responsibilities.

The burden of facilitating organisational change is shared across the employer, employee and the professional institutes. It is of equal importance to all three groups that the development of future talent meets the demands of the changing environment.

This report highlights the impact that outsourcing, shared service centres and technology has had on finance roles within an organisation. It is now more important than ever for organisations to efficiently manage career development for their staff and ensure all existing employees have the necessary

training and development required to adapt to the changing environment.

It is the employees responsibility to ensure that the experience and training gained from their employer and professional body is of long term benefit to their career, whilst enabling them to build new skills to be adaptable to any future change. A good exam record and positive references are no longer sufficient on their own to ensure a competitive edge when applying for new jobs.

We are delighted to contribute to the ongoing work of CIMA and the AICPA in supporting the Chartered Global Management Accountant (CGMA), and are committed to helping to develop tomorrow’s finance talent pipeline.”

Mark Sheldon Director Hays, Recruiting experts in Senior Finance


INTRODUCTION

In this challenging operating landscape, finance has a broadening remit of responsibilities which, in turn, demands a more diverse skill set and capability. In order to deliver optimal business support, finance needs to work as a unified function, leveraging the full talent pool in developing the skills and capabilities required.

The finance mandate – efficiency, decision support, impactMany leading organisations have already transformed their finance functions to better meet these challenges by evolving new finance delivery models and structures. They have increased the efficiency of their accounting operations by outsourcing and forming shared service centres to achieve economies of scale.

Systems have been standardised and processes streamlined. They have taken advantage of developments in information technology to generate better management information.

In doing this, firms are also liberating their finance capability to focus more directly on a management supporting role. They have developed management accountants with commercial skills and deployed them as business partners directly supporting the wider business. This new role is about applying professional objectivity to help improve decision making and performance management in the long-term interests of stakeholders.

All these services remain important and must be provided ever more efficiently. However, finance is also expected to provide management information, analysis and insight to inform decision making and help to drive impact in the organisation’s performance.

The ‘one finance’ concept For many firms, this evolution is taking place in the context of globalisation and the decentralisation of finance across different units and regions, the impact being that finance has to deliver on this broadening remit increasingly across different functions and business units as well as geographies and cultures.

Finance expertise is not limited to central corporate functions; it is being leveraged outside the centre, directly supporting operating business units and functional areas such as sales or marketing. It can also be located in shared service or outsourced centres, more detached from the corporate centre. The individuals and teams delivering this finance expertise continue to be members of the finance function, whatever their location.

So while these changes in how finance is structured can offer organisations a more agile, efficient and effective way in delivering the broadening services required from its finance expertise, they can also pose challenges. The need to ensure a unified finance capability remains, to avoid possible silos and cultural differences, while ensuring shared best practice. A ‘one finance’ approach can ensure the collective finance expertise is aligned and works as one to deliver on supporting the firm’s strategic objectives.

A fragmented management approach within the broader finance function can also impact on a firm’s ability to develop its talent pool effectively. A unified finance talent management strategy allows organisations to better plan for and develop their talent pipeline to meet both short-term and longer-term needs. Considering the requirements and actions for the development, retention and deployment across the full finance talent pool, can ensure the best return on human capital investment.

Organisations are operating in an increasingly complex environment. They are faced with financial and market volatility plaguing the global economy, increased and more complex regulatory demands, an intensifying competitive landscape and the impact of globalisation. In this environment many organisations have increasing expectations of finance and its leadership to help deliver the strategy, and support the wider business.

3

In order to understand the risks and opportunities several questions emerge:

• What does this evolution mean for the development of tomorrow’s finance talent pipeline, in light of the changing finance operating models and structures?

• Is the ‘one finance’ approach evident?

• Are organisations fully leveraging and developing their global finance talent pool?

• Are the current finance talent management strategies effective?

To answer these questions, and provide Chartered Global Management Accountants (CGMAs) with guidance, CIMA and the AICPA conducted global interviews and senior roundtables to understand the issues at play. The insights from the senior professionals that have participated in this programme, together with our own research, have allowed us to identify some of the challenges and opportunities that organisations and the finance leadership need to consider. These form the basis of this discussion paper.


Talent – the competitive advantage?

THE IMPACT OF CHANGING DElIvERy MODEls ON TAlENT MANAGEMENT

Talent and capability requirements diversifyingFinance has a critical role in supporting the sustainable success of the organisation by understanding the cost, risk and value drivers, and being able to connect the dots across the whole organisation. Successful development and deployment of the full global finance talent is therefore critical in supporting organisational performance.

over athirdof c-suite respondents agreed that the ability to attract, retain and deploy the right talent is ‘the’ main competitive advantage for their firm

Source: Talent pipeline draining growth, CGMA. July 2012

over athirdof c-suite respondents agreed that the ability to attract, retain and deploy the right talent is ‘the’ main competitive advantage for their firm

Source: Talent pipeline draining growth, CGMA. July 2012

43

Achieve financial targets?

40

Ability to innovate?43

Achieve financial targets?

40

Ability to innovate?

43% of respondents claimed that their organisation had not been able to achieve financial targets due to human capital inadequacies, and 40% saw a reduction in their ability to innovate.

A recent report for CGMAs based on a global survey of executive directors, ‘Talent pipeline draining growth – connecting human capital to the growth agenda’, highlighted the critical nature of human capital management for the success of the organisation.

Another recent report for CGMAs, ‘The fast-track to leadership’, explored the capability and skills requirements within finance. The report discussed the increasing remit and broadening responsibilities within finance that are, in turn, driving a need for a more diverse set of skills and behaviours – summarised in the proposed model, Figure 1, opposite.

5

“Finance has come to the fore, and not just because of the rigour we bring, but also for the value of the information and analysis that we provide to the business. Fundamentally in a fast moving volatile market businesses need quality information instantly and people with the ability to interpret it. The CEO demands concise financial information with the options and risks clearly identified because in tough times a business cannot make material mistakes and survive.

I want my best finance people as close to the business as possible, providing the insight to operators so we can make quick decisions and drive profitability. But I also need a finance function that does all the transactional processes and reporting quickly and to a high quality. Operational finance requires a real skill and we shouldn’t underestimate it, for example there is a real skill in being a great credit controller and we should value that.”

– Paul Venables, Group Finance Director, Hays

CURI

OSI

TY

INTEGRITY OBJEC

TIVITY

PASSION

Forward-looking strategic vision

Leadership and talent

management

Finance specialism, the fundamentals

Information and insight for action

Commercial and business acumen

Communication and collaboration

Strategic initiatives and

projects

Local and global perspective

FIGURE 1: Finance leadership capabilities and behaviours – a suggested model

Knowing where the numbers come fromFor the executives that provided input into this discussion paper there was overwhelming agreement in the need for the diverse skills, experience and behaviours captured in this model, and that it is important for finance professionals to have this broad palette of skills. They need people with exposure to and experience of the different areas within finance – including the more traditional operational and transactional areas that are increasingly executed by technology, shared services or business process outsourcing (BPO) centres.

“For BAT, in a high profile market like Russia, a key challenge is finding the right people with the talent and capabilities to support business growth. And it is crucial for organisations to have a robust talent management pillar deeply embedded in the business strategy. It is not just about training, it is about coaching and mentoring at all levels.”

– Daniel Foggia, Finance Director, BAT Russia


This is reinforced by CIMA’s previous research and underlines the need to have an understanding of where the numbers come from, to be able to effectively challenge them. These core technical finance skills are deemed to provide credibility and financial integrity, alongside the wider capabilities as illustrated in Figure 1, while certain roles retain a stronger requirement for accounting specialism, in some cases becoming even more technically specialised, driven by growing regulatory activity for example.

There was, however, agreement that providing exposure to the transactional and operational areas of finance is becoming more difficult, especially in larger firms where the finance delivery includes shared services and outsourced business models. So while the organisation still needs to undertake those activities more efficiently and effectively, the finance group retained at the corporate level has a decreasing exposure to them, impacting on the skills available to understand the end-to-end processes and activities.

“Senior finance professionals need broad finance experience. However, the level of exposure to the transaction building blocks will really depend on the role you are doing, the maturity of the organisation and even the industry. You could argue that if you are not trying to reconcile the balance sheet month in month out then you don’t need to have experience of the transaction process in support of that. However, this can be a dangerous assumption if you are a finance director, and that task is not being done well and suddenly you have a five million hole in your balance sheet. Then you have difficult questions to answer, such as ‘Why didn’t you spot it?’ The issue is that providing experience of those transactional areas, especially in the large firms, is becoming more difficult.”

– Anne Parris, Vice President Accounting,

Control & Compliance EMEA, DHL

But given the increasing focus on developing the finance pool within the corporate centre to collaborate with and support the wider business, does this really matter?

For the majority, it does indeed matter. While most reported that the level of transactional and operational finance expertise within the retained group has changed, and in many roles less is required, it remains a must-have. The senior executives highlight the need of these skills, and some experience, to understand the full context and thus be able to challenge the numbers. They flagged the loss of credibility as a potential risk when professionals do not have such grounding.

Many organisations that use external delivery models claim to have some difficulties already in providing staff with the exposure to these areas, although overall it is not yet a major concern as the pipeline in the short to medium term is considered relatively healthy.

There is, however, also agreement that over time this issue will increasingly impact on how finance talent pipelines will be developed, as executives do not see any retraction of the services delivered by shared service or BPO centres. In fact, it is likely to be a challenge that affects more and more organisations as the use of shared services and outsourcing expands, especially within mid-sized organisations:

• A recent report¹ by HfS highlighted expectations of 15% annual growth in total F&A BPO expenditure over the next two to three years. The report highlights that 13% of enterprises are now intending to move into an F&A BPO model over the next year, with strong motivation coming from mid-market organisations (those having $750m – $3bn revenues).

1. The F&A BPO Market Landscape in 2011: Re-emerging from the Recession, Re-focusing on Business Outcomes – HfS Research

7

Finance talent development – a global or a silo approach? For the most part, the executives that have input into this paper highlighted some disconnect and misalignment in human capital development, especially for those in shared services and outsourced centres. Many highlighted a lack of apparent mobility from these areas, and a higher focus on the development of the finance pool that remains within the corporate centre in general.

It appears that those professionals deployed in shared service centres do not always have the same development opportunities or mobility into the central finance function or wider business. Focus in some organisations may have been directed more on developing the business acumen and commercial skills within the retained finance function.

While most of our participants see the benefit of leveraging the talent within shared services or BPO centres, there is agreement that these staff currently largely lack the broad set of skills required in the corporate centre. As such, our senior group concurred that mobility within this talent pool is likely to continue to lag behind for a few years.

Yet, as it becomes increasingly difficult to have expertise of the end-to-end processes that we have discussed above, the pipeline from these external centres is likely to gain traction and have more demand. This is where a unified talent management strategy becomes critical for effective planning and development of these professionals so that they are fit for purpose.

“Segregation in finance is happening. There are finance people in many markets that have been working and running these huge shared service centres, they have experience and training and there is definitely now a career path in the shared services industry. Crossover back into the more general finance roles from shared services does not seem to happen much, though, at the moment.”

– Anne Parris, Vice President Accounting,

Control & Compliance EMEA, DHL

The benefit for the organisation seems clear. In this way it has a larger and more effective talent pipeline of professionals with the combined finance and transactional experience, together with knowledge of the business. Integrating training and development plans and activities to equip them with the broader, more commercial skills that the modern finance function requires, will result in a more effective role to support the business.

Changing finance operational and delivery models, such as implementing shared services, must not lead to a silo mentality and a divided finance function. All the different finance operations — whether retained, offshored or integrated within the business — remain part of finance; it is ‘one finance’.

Organisations need to focus on the development of end-to-end capability throughout the whole of finance — across geographical boundaries and functional areas, ending any divided or laissez-faire approach in how outsourced talent is up-skilled and mobilised across the function and the business. Without such focus at the core of the finance talent management strategy, the organisation risks failing in leveraging the best talent and in achieving ROI on its finance human capital investments. This may lead to retention issues, ineffective knowledge sharing and cultural conflicts within the overall function. Ultimately, it may impact on and hinder the overall performance of finance in supporting the business to execute its strategy.

For many, this may require a different and unified approach to talent management and development strategies. Firms need to focus on connecting talent management strategies throughout all retained and outsourced functions to align understanding of the business and its strategy, and optimise sharing best practice.

“Outsourcing to shared services and BPO have very much helped bring change to the table in terms of the skills you need to be in the finance team. What we tell businesses which are outsourcing certain parts of the function is that what’s left behind is a centre of excellence. The roles which are being outsourced are still yours, you still have the ownership.”

– Dan McCue, Senior Vice President F&A BPO,

Sutherland Global Services


“I think what we will see continue is the development and growth of a more diverse candidate pool. However, it will take some time before those people coming from emerging markets – namely those places where finance has developed as a skill since the emergence of BPO and offshore centres – have the kind of broad skills we have identified as being necessary to fulfil the demands of the modern-day finance function.”

– James Parsons, Chief Financial Officer,

Sound Oil plc

A more flexible and diverse career development path For the senior group that provided input to this paper, there is also some consensus that organisations need to increase flexibility on talent development within finance, focusing on building teams with the diverse and broad range of skills required that we discussed earlier in this paper, rather than following more homogenised traditional routes where large numbers of staff follow a set route. This could include placements within the shared service centre for business partners and stints within retained finance for the transactional people – as well as exposure to the wider business outside finance.

Equally, there was agreement in the need for developing more expertise across the functions. This may mean a narrower set of skills but with a high level expertise in a certain area, be it transactional, tax, risk, etc. For our senior group, it is clear that such experts are in high demand and will continue to be valued.

“Finance people no longer need to all follow the same path. Traditionally, it was like a conveyor belt whereby everyone followed the same route. Now, you can very early decide which area of finance you want to specialise in, and focus on developing your knowledge there.”

– Dan McCue, Senior Vice President F&A BPO,

Sutherland Global Services

“The key in terms of finding the talent and skills for the modern finance function requires a focus on building a team with the broad range of skills you need, rather than having all individuals following the same finance career path as perhaps would have been the case in the past.”

– Graham Baker, Vice President Global Finance

Services, AstraZeneca

“If you have 100 people across the global finance function, don’t worry about all 100! Identify those who have already built a track record for delivering value, work hard and want to develop their career. Pick the winners, evaluate them, listen to them and ask them what they want to be doing in three to five years time. We need to be more selective in where and how we develop talent.”

– Paul Venables, Group Finance Director, Hays

So this will mean that there is more flexibility in how talent is developed and what career paths are available. While all agree that some exposure to the transactional areas is important for all finance professionals, only those that go into that area of the business and wish to progress in that sector will need to develop a high skill set or substantial experience going forward.

9

CONClUsION – ONE FINANCE, ONE TAlENT MANAGEMENT sTRATEGy

The finance machine has been evolving in the way it is structured and delivers services within the business, to effectively fulfil this broadening remit. Organisations are using technology and external service delivery models to achieve economies of scale and standardise and streamline processes, in tandem liberating management accountants to take on more collaborative and supporting roles in the wider business to provide insight and improve decision making.

In turn, this increasing remit and changing mandate demands a finance talent pool with an equally diversifying skill set and capability.

Firms are increasingly finding it difficult to provide retained staff with exposure to and experience of the transactional areas of finance in central functions, especially where activities are delivered by shared services and BPO centres. Yet, there is strong agreement of the need for all finance to have an understanding of the end-to-end finance processes to effectively manage and be able to challenge the numbers. As an increasing number of organisations change their service delivery models, and the use of shared services and BPO increase, the future talent pipeline may be compromised.

Organisations are operating in increasingly complex, volatile and competitive conditions. In turn, they require finance to retain their fiduciary and operational responsibilities, while supporting and partnering with the wider business to improve decision making and implement and deliver on the strategy for the long-term interests of its stakeholders.

Many firms may be missing an opportunity in not considering the full global finance population and talent available. Many appear to isolate the strong skilled talent base within shared service and BPO centres, restricting its mobility around finance and the wider organisation. There is also an apparent disconnect in some organisations for this area of finance from the overall finance training and development strategy and plans.

The impact of such a disconnect can be widespread; poor ROI on talent development investment, reduced mobility and opportunity leading to attrition of skilled staff, and the risk of developing a silo culture across finance. Ultimately, this disconnect may impact on finance’s ability to effectively fulfil its broadening remit.

Firms need to focus on connecting talent management strategies throughout all retained and outsourced functions to align better understanding of the business and its strategy, and optimise sharing best practice. This may require a different and unified approach to talent management and development strategies. In some cases it may require a cultural and mindset change in actively living the ‘one finance’ concept.


The Time Warner story:

“At Time Warner we started external delivery at the transactional level, and now we have started pushing higher level work and more reporting to them. The question is: if there is a detachment from the business, at that point where is the value?

The real value comes when you are actually within the business and you are actually talking to the FD and talking to the MD and when everybody is working towards a cohesive strategy. Where you get the challenges is where certain parts of the business are completely disjointed or disintegrated, not ingrained within that process. Then you might get people pitching in, but they are not necessarily working towards the common goal and that’s where you get the challenge on strategy. So you might be keeping your costs down, but you are not delivering the strategy.

For me, it is all about how you look at delivering services and outsourcing. You need to transition with the partner or centre. It’s not a case of an opportunity to dump work on them. Where that happens you are going to get issues and challenges. In future, I believe that we are not going to have the lower transactional level skill set, because we have lost it all as it has all been pushed out. So for me it is about how you work

together. Sometimes I hear that outsourcing is ‘them and us’. I think that’s the wrong way to do it. It is all about integration of the retained and outsourced finance so you don’t lose that skill set.

Do you see them as a partner or do you see them as a supplier? You know, at the end of the day, if you want to develop a well-rounded finance team, bring them in-house and create that integration. Today, we have a number of implants from Poland and India within our division but I don’t treat them as implants, I treat them as finance employees.

In our building in the US alone, we have 800 finance people in from India. You come to our UK office and we have about 200 also from India. At the end of the day some of these kids are so intelligent and so bright, and they are in an environment where it’s competitive and they want to get to the top of their class. They are incredibly mobile, willing to leave their families and try and progress their finance career in another country. When you bring people in like that and you get them to think about the common strategy, the common objective and the common goal, then you can better achieve them together as a team.”

– John Mahtani, Vice President Finance,

Time Warner

lEADERsHIP lEssONs – A vIEW FROM THE TOP

11

“There’s little doubt that the role and responsibilities of the finance function at AstraZeneca have broadened in recent years. Today, the business is increasingly looking to our teams to take the lead in ensuring we can successfully navigate the challenges and seize the opportunities that lie ahead.

It’s now more important than ever that we achieve the ambitious goal we set ourselves – to become the best finance function in the pharmaceutical industry. This means we not only need to become more efficient and effective as a function, but also challenge ourselves to find new, innovative ways to deliver the quality of service, governance, strategic input and business understanding that our customers need. It also means that we need to ensure we can continue to attract, retain and develop the very best finance people in our industry.

As a finance function we are moving towards a greater specialisation with three main groups – operational transactional finance, business partnering, and specialist teams such as tax, treasury and investor relations. As you would expect, the technical skills of people across these groups differ considerably. However, I also believe that there is a core set of common skills which all people need to demonstrate – this includes rigour, objectivity, business insight and financial analysis combined with an approach that is ethical and responsible.

I started out in tax, spent ten years business partnering and am now leading our transactional and operational team. I would never have imagined when I started out that my career would take that course, and it’s certainly helped me build an appreciation of how the different parts of the finance function can come together to drive business value. While there are still people who look to build deep technical knowledge in one area, I believe it’s becoming more frequent for people to move into other areas of finance as they seek to broaden their experience and range of skills.

As the needs of our business evolve, we recognise the value of building a team with a broad range of skills and experiences. Encouraging individuals to gain hands-on experience of other areas of the finance function is not only a great way to build these

skills, but also helps to increase collaboration and networking across the business.

Over recent years we have implemented a range of networking and development programmes designed to give people the opportunity to get ‘taster experiences’ outside of their own area. Our people have really embraced this opportunity, and the feedback we have received has been overwhelmingly positive.

As we seek to deliver more efficient services, many of the ‘traditional’ processing roles of the finance function are now carried out in offshore shared service centres. However, we also operate a retained function, so this means there is still plenty of scope for people at the start of their careers to build these basic and fundamental finance skills. It’s also worth noting that as we seek to find more ways to improve the quality of our transactional and operational services, we have been able to create new opportunities for our most talented people.

As we look to the future, I believe that we will see more of the finance function moved to a shared service centre model. We know that it’s becoming increasingly important to ensure our finance business partners are focusing their time and resources where they make the most impact – on delivering our business strategy. To support this, we are looking closely at developing centres of excellence that can take on some of the management information roles traditionally delivered by the business partners. This service goes beyond the traditional transactional roles and requires skilled people that are well equipped to understand, interpret and package data into the timely and accurate management information that our business needs.

Historically, our business was focused on the US, the UK and Sweden. However, the rise of shared service centres and centres of excellence has certainly helped raise finance skills levels in new regions. As a result, we are seeing a geographical change in the finance talent pipeline, with Asia-Pacific in particular providing a lot of exciting talent prospects.”

GRAHAM BAKER – vICE PREsIDENT GlOBAl FINANCE sERvICEs, AsTRAZENECA


“The change in the skill set required to be a successful finance person today has been driven by a number of issues – technology, shared services, the need to be a more influential business partner, the need to help drive the business and the more complex global business environment.

Put simply, years ago we didn’t have the global aspect, and finance was decentralised. Today, it is a global role and it is tightly tied to the wider business.

For me, what finance professionals need today is increased managerial skills. These larger teams operating with much more complex processes and greater volume require the ability to be a manager.

In addition, there are a number of other crucial competencies. You have to inspect what you expect – really analyse what you are doing and pay great attention to the detail. You have to dot your i’s and cross your t’s; in other words, detailed-oriented. You also have to have great communication skills. And finally, you need to be a leader, because if you don’t lead, you end up being led. I run shared service centres, and when I am recruiting people those are the skills I am looking for.

Accounting skills are still very important and you need to underpin your skills set with those. But those four broader attributes are what today’s good finance people need to have. If you want to go into the accountancy profession, then you need those competencies. However, what I would add is that finance people no longer need to all follow the same path. Traditionally, it was like a conveyor belt whereby everyone followed the same route. Now, you can very early decide which area of finance you want to specialise in, and focus on developing your knowledge there.

Outsourcing to shared services and BPO have very much helped bring change to the table in terms of the skills you need to be in the finance team. What we tell businesses which are outsourcing certain parts of the function is that what’s left behind is a centre of excellence. The roles which are being outsourced are still yours, you still have the ownership. So you must retain the leaders within your centre of excellence,

managing the entire process. To do that they have to have other skills. To begin with you need to know how to communicate effectively with people 5,000 miles away. You need to be able to understand the processes from start to finish, to be a leader and to work in large, diverse teams. If you have those skills, then that is where you can really add value.

In terms of which skills and which roles go to offshore centres, I think it’s fair to say that those continue to be the process tasks. However, I do think it’s fair to say that skill sets are on the up in offshore centres. Nowadays, some of the managerial skills I talked about earlier are starting to come through. As a result, some of the more complex tasks are going to these centres – but it’s happening slowly.

What offshore centres can do for businesses is take away some of the recruitment headache. Finding the right people for finance is always difficult. Even if you have a great supply, you’ve still got to find the people within that supply and that’s not always easy. Part of what BPO can bring to the table is the ability to do that for you, and this should not be overlooked by firms.”

DAN MCCUE – sENIOR vICE PREsIDENT F&A BPO sUTHERlAND GlOBAl sERvICEs

13

“In my role as global head of transactional processes and shared services, we are certainly going through a big exercise at the moment of which talent is a major part. There are currently three main attributes that we are looking for: the ability to get on well with and build a strong relationship with the BPO provider, to be self-confident with internal customers, and the ability to drive continuous improvement and process simplification.

Those three attributes within transactional processing are very important today and I don’t think they are skills that traditionally we would have looked for, so there has definitely been a shift there.

We invest in developing these skills in our own people in a number of ways. We encourage our staff to take up qualifications programmes such as CIMA, which help them develop broader competencies, and we have a talent programme within Pearson. Of course, all of that is underpinned by making sure our people have the required technical and core skills that mean we are not too generalist in our thinking.

We have typically moved across more routine transactional activities to our BPO provider, such as preparation of reconciliation activities, for example. We have retained some of the judgemental review activities in-house and we have not pushed the boundary particularly far in terms of business analysis work. What we have tried to say to those retained in the function is that this frees you up to be able to do the much more value enhancing activities that really influence the way in which we do business.

When we recruit people, who have done three years of professional training and qualifications, we do not want them to be a spreadsheet junkie and someone who is just here to process numbers. These are clever people who can contribute a lot more and, to be honest, will get pretty bored if they are not allowed to do the things they enjoy. Mobility is important.

If I look ahead to our BPO activity and where that might go from here, I do not necessarily see us moving more roles to BPO. There were two reasons we went down the BPO route. One was arbitrage and the other was productivity. Over time, I think

the arbitrage issue will become less compelling as inflation equalises salary costs, while there is a finite limit to the productivity benefits that can be achieved, and hence the reward curve becomes much less. So if anything, I can actually see us more likely to bring roles back rather than move more of them to BPO providers, unless we are able to move further up the value chain.

In terms of the people we are bringing into the organisation today, I would say that candidates are tending to have broader skills capabilities beyond finance. For example, there is a greater interplay between finance and project management and also between finance and technology. The stereotypical trained accountant with a quite narrow range of capabilities is being replaced with far more rounded individuals.

Finding candidates with this broad skill set requirement is a challenge. Retaining your good transactional processing people and those in the classic accounting roles is also a challenge, because if they are good, then people will often try to tempt them away into more commercial roles. So there are challenges around retention as well as recruitment.”

JOHN AsHWORTH – GlOBAl HEAD OF FINANCE TRANsFORMATION AND BPO, PEARsON PlC


“In today’s far more commercial, much more front line and more exposed finance function, we are a kind of deputy CEO combined with technical knowledge and expertise.

Of course, there remains a need for the core financial skills, and finding a balance is essential. The challenge as a professional starting out is when you step out from the core skills and move into a broader, more general-management skills set. I was fortunate enough to come through the Shell graduate scheme which gave me two years to complete my CIMA exams before I was sent out to gain international experience, cycling round jobs for 18 months, which exposed me to real breadth and depth.

Having that firm accounting grounding is absolutely essential if you want to remain in finance – and then you can go off and get that broader range of skills for the modern-day finance function.

To a certain extent, it is easier for finance professionals to develop these competencies today because we all tend to move around a lot more. That means you can really target roles which will allow you to develop a specific competency before moving on to another role.

Of course, the emergence of shared service centres and BPO mean a lot of the traditional grounding roles have moved away from finance teams. The good news is that it frees up those working in finance functions to really gain experience in and knowledge of the more exciting, influential and commercial roles.

The bad news, of course, is that you still have to equip your more junior players with those skills, so how do you do that? For me, it comes down to the individual, who needs to be saying ‘I need these core skills so I am going to work in a role where I can get them’ or ‘I’ll go and spend some time in a shared service centre to get them’.

I believe that with outsourcing we have now found the balance of where we want to be, and I don’t think we will see many more roles moving away from the finance function. I believe the distance from the core business functions to the key decision making process is as great as you would ever want it to be. There are

some things which are natural for outsourcing – such as back-office accounting and central treasury units – but as soon as you are into business decision making, and finance leadership roles, those are going to stay with the business and rightly so.

What I think we will see continue is the development and growth of the more diverse candidate pool. However, it will take some time before those people coming from emerging markets – namely those places where finance has developed as a skill since the emergence of BPO and offshore centres – have the kind of broad skills we have identified as being necessary to fulfil the demands of the modern-day finance function.

At the moment, the people coming through those markets are very much pure accountants. What you need today is someone who can do accountancy, but is also able to take on a much broader role with a much wider understanding and view. That’s particularly important in small cap organisations.”

JAMEs PARsONs – CHIEF FINANCIAl OFFICER sOUND OIl PlC

15

“The skills and experiences required to be a finance professional have changed dramatically. Until a few years ago, many organisations, including Unilever, were developing generalists from many different streams – from manufacturing, from sales and marketing, from finance and so on. What was required was someone who could lead the business and drive the business. The functional expertise was not something that was really called upon.

That has changed. Because corporations are becoming bigger – they are seeing an increase in their footprint but also in the expectations laid upon them by the different business units and geographies – the functional expertise required from all functions, including finance, has risen considerably. Companies are now looking for people who are larger experts on finance but also understand the business equally, if not better, than the people already there – and who can translate business requirements into a functional agenda and partner the business.

Historically, finance had a role of recording, reporting and controlling. Today, these areas are not so arduous. Reporting to a large extent is becoming standardised; recording is now aided by technology and systems which can do a lot of it for us. So these roles are coming down in significance, and that creates space for finance people to focus much more on being a business partner.

The requirement for skills today is not about telling me something can’t be done because it’s in the rulebook. It’s about finding a creative solution to move the business forward, and these things need a very different skill set. It’s no longer just core accountants that we are looking for – it’s finance leaders who can partner the business. The core accounting roles, and the basics, will always have to be done, but these can move to the offshore centres and be looked after there – all of the time being managed at the retained function. If you want to be an architect, you don’t necessarily need to be a master bricklayer. The technology which eases the workflow combined with management at the retained function is sufficient.

I do not feel that moving the focus of our finance people towards business partnering and becoming leaders is to ignore or diminish these core skills. In fact, because these people will be using the information coming from these processes in an even greater capacity – to drive the business – they will have to understand them and how they are compiled just as well.

Raising the skills levels and changing the skills sets to meet these new finance demands today will not happen overnight, of course. It is a journey to train your existing people and recruit new people. It is the same as the journey the HR function went through when it moved from a personnel function (using the rulebook to tell people what they can’t do) to a business partner which looks for solutions. It takes time and it is about changing the culture as well as the skill set.”

UDAyAN DUTT – HEAD OF HR UNIlEvER sRI lANKA


• Talent pipeline draining growth: Connecting human capital to the growth agenda, CGMA, 2012

• The fast-track to leadership: The challenges, opportunities and action plan, CGMA, 2012

• New skills, existing talent: The new mandate for finance professionals in supporting long-term business success, CGMA, 2012

• Defining the profession: How management accounting creates sustainable success, CIMA, 2012

References and further reading

• Rebooting business: Valuing the human dimension, CGMA, 2012

• The inside track; partnering for value, CGMA, 2011

• From ledgers to leadership, CIMA, 2009

• The F&A BPO Market Landscape in 2011: Re-emerging from the Recession, Re-focusing on Business Outcomes – HfS Research

17

Distribution of this material via the internet does not constitute consent to the redistribution of it in any form. No part of this material may be otherwise reproduced, stored in third party platforms and databases, or transmitted in any form or by any printed, electronic, mechanical, digital or other means without the written permission of the owner of the copyright as set forth above. For information about the procedure for requesting permission to reuse this content please email [email protected]

The information and any opinions expressed in this material do not represent official pronouncements of or on behalf of AICPA, CIMA, the CGMA designation or the Association of International

Certified Professional Accountants. This material is offered with the understanding that it does not constitute legal, accounting, or other professional services or advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information contained herein is provided to assist the reader in developing a general understanding of the topics discussed but no attempt has been made to cover the subjects or issues exhaustively. While every attempt to verify the timeliness and accuracy of the information herein as of the date of issuance has been made, no guarantee is or can be given regarding the applicability of the information found within to any given set of facts and circumstances.

© 2012, Chartered Institute of Management Accountants. All rights reserved.

SM

The Association of International Certified Professional Accountants, a joint venture of AICPA and CIMA, established the CGMA designation to elevate the profession of management accounting globally.

Africa Office address: 1st Floor, South West Wing 198 Oxford Road, Illovo 2196 South Africa Postal address: PO Box 745, Northlands 2116 T. +27 (0)11 788 8723 F. +27 (0)11 788 8724 [email protected]

Europe 26 Chapter Street London SW1P 4NP United Kingdom T. +44 (0)20 8849 2251 F. +44 (0)20 8849 2250 [email protected]

CIMA has offices in the following locations: Australia, Bangladesh, Botswana, China, Ghana, Hong Kong SAR, India, Ireland, Malaysia, Nigeria, Pakistan, Poland, Russia, Singapore, South Africa, Sri Lanka, UAE, UK, Zambia, Zimbabwe.

American Institute of CPAs 1211 Avenue of the Americas New York, NY 10036-8775 T. +1 2125966200 F. +1 2125966213

Chartered Institute of Management Accountants 26 Chapter Street London SW1P 4NP United Kingdom T. +44 (0)20 7663 5441 F. +44 (0)20 7663 5442

978-1-85971-766-0 (PDF)

www.cgma.org

October 2012

South East Asia and AustralasiaLevel 1, Lot 1.05 KPMG Tower, 8 First Avenue Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan MalaysiaT. +60 (0) 3 77 230 230/232 F. +60 (0) 3 77 230 231 [email protected]

Middle East, South Asia and North Africa356 Elvitigala Mawatha Colombo 5 Sri LankaT. +94 (0)11 250 3880 F. +94 (0)11 250 3881 [email protected]

North Asia 1508A, 15th floor, AZIA Center 1233 Lujiazui Ring Road Pudong Shanghai, 200120 ChinaT. +86 (0)21 6160 1558 F. +86 (0)21 6160 1568 [email protected]

one finance - cima · by technology, shared services or business process outsourcing (bpo) centres....

Documents