Message from the MD
The end of the year. Always a time for reflection if you can find time.
Over the last year, I have attended a number of conferences. In the duller presentations, I find myself reflecting on all the talk about outsourcing, payment factories and shared service centres (SSCs). There seem to be some more general themes emerging.
So what are they? In many ways we are listening to new versions of the old centralisation/decentralisation argument or the debate between the virtues of economies of scale offset by the inefficiencies that emerge as tasks are moved away from the business. Just because they are called payment factories does not change the underlying business rationales. But this is perhaps too cynical and I would suggest two newer themes that are emerging.
The first is the use of technology and, in particular, web infrastructure to achieve some of the benefits of both centralisation and decentralisation or, to put it in modern words, the creation of virtual payment factories or virtual SSCs. Technology is being used in new ways to undertake basic functions.
The second trend is that many companies are getting to grips with ERP systems (or at least getting much better management information). This enables the finance function to extend its influence over more parts of the organisation and to genuinely add value by influencing and facilitating how the business is run. Not that this is news to the many CFOs, FDs and Treasurers that have already trodden the finance path to more senior management.
But more and more finance and treasury functions are finding that, once the accounting and cash management is organised and automated and the banking arrangements have been reviewed, the best way to add value is to review the business processes in the wider organisation, not in the finance and treasury function. The problem is that the internal politics of many organisations make this a difficult or impossible task.
How will you be adding value to your organisation in 2002?