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Business services organisations and the disenfranchised Finance Director

Many larger organisations have created business services organisations which go beyond the reach of shared services through combining all back office processing and provide added value services beyond the transactional. We see legal services, debt management, business planning and analytics and even pensions advice, increasingly, these days. There are benefits. The commoditisation of these services brings operational efficiencies and performance improvements.

Control tends to be with an Operations Director and suddenly this makes that person very powerful; to the detriment of the Finance Director, who can feel and actually become, disenfranchised. The reason for this is twofold: the organisation chart might now have the FD reporting into the OD which is a clear demotion and damaging of the famous key relationship between the CEO and the FD / CFO and secondly, even if not reporting to the OD, the FD has to redefine their role to account for the loss of span of control.

Frequently there is a power struggle. Not overt, necessarily but we have observed behaviours displayed inconsistent that are with those we might expect from senior management. Politics emerge, that energy sapping phenomenon that we all hate and do our best to avoid. If you do play politics, it will end in tears for someone because there's no place in modern business for outscoring one's colleagues.

However, what's the answer for the FD? Simple - accept and adapt to the change or move on to another role where the FD is still at the top table. In the meanwhile, if you are planning to create a business services organisation, build into your plans a coping strategy for the scenario above because it will arise. It's best to recognise that early on and discuss it like adults rather than wait for the childish behaviour!
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S-M Consulting takes your finance people along the journey up the value chain from being reporters of history and considered by many as "bean counters", to highly valued and indispensable business partners helping to build the future. Ask to speak to our MD, James McColl, about this service because it adds very significant benefit. He will be delighted to share his ideas and expertise with you.
Business services organisations and the disenfranchised Finance Director
Many larger organisations have created business services organisations which go beyond the reach of shared services through combining all back office processing and provide added value services beyond the transactional. Read more
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