“Finance Masters” Find Driving a Value-Centered Culture Most Critical to Success
NEW YORK; FEB. 3, 2005 – There are five common characteristics among companies that master the finance function to achieve enhanced business performance, according to a new study released today by Accenture. Of these characteristics, the creation of a value-centered culture is considered by CFOs to be the most critical element for success.
The study, based on in-person interviews with 40 chief financial officers of leading global organizations, was designed to identify distinctive characteristics of leading finance organizations.
The CFOs were asked, among other things, to select from a list of 20 finance competencies that they considered most important in terms of contributing to shareholder value. More than half (56 percent) of the CFOs said that a value-centered culture is one of the top three finance competencies contributing to shareholder value, and one-third (33 percent) rated it as the most important competency. In addition, nearly 40 percent said that a value-centered culture is one of the top three competencies they plan to invest in over the next two years.
“We found that companies with high-performing finance functions make those functions the driver of a value-centered culture — a culture that instills policies and procedures throughout an organization to help employees make decisions that create value for the company as a whole,” said Michael Sutcliff, global managing partner of Accenture’s Finance & Performance Management service line. “This research shows that high-performing businesses integrate finance executives throughout the company, where they can use their expertise to help employees generate more company value.”
The study also found that in addition to possessing a value-centered culture, companies with superior finance functions share four other characteristics. Specifically, they:
- Invest in business analytics tools related to enterprise performance management, which are solutions that help executives make better decisions about resource allocation to demonstrate a company’s short- and long-term value to shareholders.
- Implement technologies such as enterprise resource planning systems that improve basic finance operations, such as the reporting and management of an organization’s incoming cash.
- Stress the importance of strong capital stewardship, which comprises policies and practices that enable companies to invest cash efficiently and effectively in order to provide investors with maximum possible return on investment.
- Take a broad view of enterprise risk management, with policies and procedures that help them identify and manage financial and insurable risks, as well as non-financial risks, across the enterprise.
About the Research
Designed to identify distinctive characteristics of leading finance organizations, the study involved in-person interviews with more than 40 chief financial officers from leading companies from around the world, as well as an extensive benchmarking study in collaboration with the Hackett Group. For the CFO interviews, Accenture used a shareholder value analysis to identify common traits among companies that have mastered the finance function. Quantitative and qualitative questions were designed to understand: (1) the relationship, if any, between finance mastery and leading companies; (2) whether a relationship differed across industry, business model or growth expectation; and (3) common capabilities that finance functions at leading companies share and how businesses can determine where they should be investing. For the benchmarking study, Accenture used the Hackett Group’s global finance database of companies to perform analysis and compare finance mastery of leading businesses to non-leading businesses.
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 100,000 people in 48 countries, the company generated net revenues of US$13.67 billion for the fiscal year ended Aug. 31, 2004. Its home page is www.accenture.com.