The topic and concern for enhancing the effectiveness of financial management has been around for decades. Despite the length of time this matter has been on the stage, many leaders still are concerned and frustrated with assessing and enhancing their organization’s Financial Management Effectiveness. PMCC Ventures has been dealing with this issue for 30+ years and offers some insights on why the issue is still front and center- and what practical things a business can do to enhance its financial management capabilities.
To us, the fact that the issue is still front and center is a good thing. We believe that the role of finance and hence its actual effectiveness will always be in a state of change. The challenge for many companies is that in this constant state of flux and change- they are seeking insights for solutions in many of the wrong places. Insights for meaningful change don’t likely exist within the organization- they are sourced by changes the business undertakes, changes in competitive situations, government or regulatory changes and the economic climate and its impacts.
In many companies, the finance organization is buffered from dealing with shifts in strategy, changes in market conditions, and emerging issues. This is particularly true where the traditional role of finance has primarily been to efficiently process transactions and accurately prepare compliant financial reports. Plenty of new survey material suggests that the role of finance is changing and expanding, and the most recent economic situation has caused the overall organization to be more dependent on the effectiveness of finance- throughout the company- not just in the “finance department”.
In today’s environment the source of enhanced effectiveness will likely be developing new capabilities- or dramatically enhancing existing capabilities- not just doing the same things incrementally better.
To gain more insight on the subject, review PMMC Ventures’ brief presentation on Enhancing Financial Management Effectiveness- Seeing what is missing.