Written by Crystal Lee
Oh, the clichés modern media has created! Consider the stereotypes that are all too common in tv and movies –
The dumb jock. The mean girl. The crotchety old neighbor. The professor who seemingly enjoys failing students. And, of course, the corporate financier who watches every penny coming in and out of a company like a hawk. We all know how this character is portrayed. They apparently have no personality – and no life outside of their drab little office. They never seem likeable, but everyone keenly understands that they keep the company financially afloat. While stereotypes can manifest themselves from some semblance of truth, it isn’t hard to identify how they are all gross reductions of a person or station. The role of finance has fallen victim to such a minimal understanding of what they do!
Perhaps in part because business itself (and therefore the role of finance in business) has advanced. Consider Integrated Business Planning (IBP). Such planning has become an invaluable strategy that top-tier businesses utilize. With businesses carefully focusing on linking demand projections with deliverability and portfolio management, not just to balance the supply chain, but to satisfy strategic targets and gain predictability, the future-oriented aspect of IBP makes the finance team a far more crucial player within a company. And, along with it, IBP slays the misconception that the role of finance is to merely monitor money coming in and money going out. Finance now rises to assist in casting the vision for a company’s future, help monitor outside forces that might challenge projections, and engage in robust scenario planning to predetermine (and prepare for) complex “what ifs”. In this sense, the role of finance may include surveillance, but with a shift in orientation! Rather than existing only to carefully monitor – and seemingly challenge – every expense a company may accrue from within, now the role of finance includes identifying and planning for outside risks that might threaten a company’s planned future.
Such a vital, stereotype-crushing role for finance within Integrated Business Planning offers an opportunity to build morale and maximize the value of every member of a company. Finance now has stake in evaluating the feasibility of business strategy, gauging the various implications of a plan, and managing any gaps between real results and the projections in IBP. This new, more valued role of finance is here to stay, and it will only make businesses healthier!