The Global Finance Function: Five Focal Points
Finance teams at large multinational companies can expect more and increasingly sophisticated tasks to come their way. The majority of those teams will have to perform those tasks with the same or fewer resources. Companies are focusing more on reducing overhead costs and improving operating margins, cash flow, and customer satisfaction. At the same time, demand for business services--finance, human resources, IT, and procurement--continues to rise as companies of all sizes expand into new markets and establish operations worldwide, according to a survey by business strategy consultant the Hackett Group. For finance teams, that means they probably need to become more productive. [ILLUSTRATION OMITTED] Outsourcing more services to vendors or shared services centers is one solution, especially for smaller companies. In the United States, payroll is already outsourced 46% of the time and tax 30% of the time, according to a benchmarking report by professional staffing firm Robert Half and the Financial Executives Research Foundation. Accounts payable, meanwhile, is emerging as a candidate for additional outsourcing. German consumer and industrial products company Henkel, for instance, established a global shared services unit with about 1,500 employees that works with finance, HR, IT, and procurement, as well as with individual business units, an EY report noted. The unit runs three captive centers, one each in Slovakia, the Philippines, and Mexico, and an outsourced center in India. The unit is in charge of routine tasks but also market research, customer service, and supply chain activities. "We are more efficient and flexible in reacting to changing market conditions and customer demands thanks to the standardization and simplification of our business processes on a global scale," Kasper Rorsted, chairman of Henkel's management board, wrote in the company's 2012 annual report. Finance executives at large multinational companies expect to have to deal with budget restrictions for a while, the Hackett survey found. With uncertainty and risk remaining in the global economy, they also expect to have to remain flexible and quickly respond to changing business conditions. To prepare for quick action, they prioritize planning more comprehensive approaches, according to the Hackett survey: Data analysis. External and internal data and analysis of the data were the most crucial to derive value and come up with actionable strategies. Seventy-four percent of respondents to the Hackett survey said improving the quality of the finance function's data analysis and reporting capabilities was important, and 72 % named improving analytical, modeling, and forecasting capabilities. …