Want a career as a Financial Consultant

There’s a brand new career on the block, and it’s perfectly suited for anyone who has a combined interest in accountancy and IT.

It’s the career choice known as financial management consulting, and it’s booming, with demand far exceeding supply.

Becoming a financial management consultant is appealing for a number of reasons:

 

– The pay is excellent, with the potential to earn significantly more abroad;

– There is substantial market demand for such consultants; and

– It’s a hybrid position; the best of both worlds where finance and IT expertise merge to enable business intelligence (BI), enterprise performance management (EPM) and regulatory compliance and governance

 

From finance to IT

The people best suited to the world of financial management consulting are those with accounting or financial backgrounds and qualifications; and an appreciation of technology. While an IT person can move into financial management consulting, it is typically harder to achieve.

An accounting or financial background fosters a unique empathy with clients. The knowledge and understanding of matters financial engenders an immediate and unspoken bond.

Interest in and appreciation of both IT and finance bridges the gap between the two worlds and enables the practice of true BI and EPM.

 

Demand for skills

According to the Economist Intelligence Unit’s fifth annual CEO Briefing survey, a lack of local talent will be the single greatest barrier to growth for companies that operate in emerging markets over the next three years. The 1 006 executives surveyed believe that in developed markets, the high cost of labour is the primary barrier to growth.

An article published on IOL Technology (www.ioltechnology.co.za) states that South Africa will be unable to fill more than 100 000 IT jobs by 2009, as indicated by independent research firm IDC.  IOL Jobs (www.ioljobs.co.za) reports that the Independent Regulatory Board for Auditors (IRBA) had warned that a looming financial skills shortage could severely undermine South Africa’s growth ambitions.

This undeniable shortage of skills translates into a demand for financial management consultants who can command top dollar while fulfilling the market need for effective and efficient EPM, BI and corporate governance compliance.

Besides being unable to effectively adopt BPM and BI due to the skills shortage, organisations also struggle with compliance issues relating to King II, Basel II and Sarbanes Oxley. All of these reports and regulations require companies to perform financial reporting and consolidations faster, more accurately and more visibly. Having the right financial management consulting skills makes you an invaluable tool and asset to countless organisations.

 

What to expect

Financial management consultants report to the CFO. It is a business-critical issue, which means it is dealt with at board level.

As a financial management consultant, you need a clear and demonstrable understanding of business, finance and technology. You must appreciate the value of everything BI and BPM, including the role that customer relationship management (CRM) and enterprise resource planning (ERP) play in the whole process.

Travelling, locally and internationally, is necessary and you must possess excellent personal skills to develop solid customer relationships. But above all, you must be able to deliver.

The world of a financial management consultant involves exposure to a variety of diverse environments and organisations. It involves tremendous networking, putting you in the right place, at the right time, to demonstrate your skills. In such a place, opportunities abound and you’ll be spoilt for choice in deciding which offer to take first in your journey up the ladder to success and financial freedom.

Advertisements

6 tough questions to ask your EPM vendor

Enterprise performance management (EPM) technology today extends the power of performance management across the enterprise, helping companies align their corporate strategy to core business processes and results. But EPM success depends on a several factors.  I  suggest you ask your vendor the following questions:

1. What is the track record of your EPM offering?

EPM is not a tool, nor is it about achieving higher performance through installing technology-centric solutions. The real value of EPM is that it enables the development of consistent, actionable decision-making processes, while breaking down internal barriers to improving the financial and operational performance of the organisation as a whole. Ask the vendor if they have implemented EPM systems for large corporates – organisations with many millions in annual turnover. Can they demonstrate that these implementations have transformed complex organisations by enabling them to align and measure individual and group behaviour against high-level strategy and corporate goals? Can the vendor prove that they have paved the way for enhanced efficiencies, strategic changes and enterprise-wide value add?

2. Who are your clients and are they referenceable?

Does the vendor have satisfied clients with sites that are referenceable on request? What experience do they have with various aspects of EPM implementations? A rich source of referenceable customer implementations is the ultimate indication of the vendor’s expertise and commitment to ensuring a smooth, cost-effective implementation that adds value to the organisation.

3. Do you have sufficient people to implement the offering? What is their track record, and do they lean to the business or technical side?

Cross-functional skills are key. Does the vendor have a highly diversified team that comprises both business knowledge and technology skills, with members who come from accounting and IT backgrounds, for example? This is a fundamental characteristic of any EPM vendor that can offer a complete business solution.

Does the team demonstrate extensive experience in EPM implementation, enabling them to understand a client’s business processes and know what they are aiming to achieve? Are they committed to understanding, evaluating and streamlining a company’s existing business processes? This exercise must include: assessing a company’s unique structure, standardising management processes, reinforcing a common performance language, and placing value on data quality and integrity.

4. What is your relationship with the software vendor?

While EPM is not a tool but rather a disciplined approach, the relationship between your vendor and the software provider is critical. A solid, two-way relationship ensures that the vendor can tap into a vast knowledge base so that any questions, issues or problems that may arise can be resolved quickly.

5. What is your approach to EPM implementations?

EPM is about designing and implementing pervasive systems that touch all the right groups and integrate the most meaningful processes. As a result, a methodical approach is required, beginning with the development of a comprehensive understanding of the clients’ business requirements and then applying EPM best practices.

6. How would you facilitate the knowledge transfer to us, the client?

It is vital for the EPM vendor to work with the client as much as possible. Dedicated resources from the client enable the facilitation of knowledge transfer through working together closely. Ensure that your vendor commits to documenting the entire EPM rollout and providing you, the client, with all supporting documentation. It is the duty of the vendor to ascertain that the client is fully conversant with the solution at the time of handover.

3 REASONS YOU NEED PERFORMANCE MANAGEMENT

What short memories we seem to have. Roughly every seven years the market goes into a serious downturn, and every time it happens, people seem surprised, even shocked. Yet the cycle is relatively predictable – even certain.
Consider the most recent downturns: 1987, 1994, 2001 … and  2008. It certainly feels worse this time, with the subprime crisis leading to a knockon loss of confidence in world markets, and the collapse of at least one major US financial institution and one in the UK.
But cast your mind back to 2001. Where we now have Bear Stearns and Northern Rock, then we had Enron, Global Crossing and WorldCom, to mention three. Where we had major lapses of corporate governance then, we now have over-reaching of eager investors over a period of years, willing to bet entire banks’ – and countries’ – future on the potential for the future value of loans to exceed their current book value.
We went through a recession, or no more than a correction. What we do know is that the compliance world is going to change, and dramatically as oversight and regulatory bodies try and ascertain how they got it wrong again.
As an example, Basel II was supposed to help companies and entire industries profile their risk, in particular their capital adequacy when it comes to allowing a critical mass of customers to have access to their cash. Yet a run on Bear Stearns showed the bank to be short of cash, creating a self-fulfilling prophecy as large numbers of account-holders, spooked by rumours, sought to withdraw their investments.
History shows that intervention by authorities brought the US financial system back from the precipice, but the next two years will be tough. More than ever, organisations will need to implement enterprise performance management (EPM) to help them get through this period. Here are three key reasons:

1 Regulatory compliance. This was a clear and compelling mandate before; now, as all markets struggle to make sense of their current and future state, there will be ever greater scrutiny of company accounts, accountability and the processes and data that support them. There will be more frequent and detailed reporting, and poring over books, with accompanying accountability and consequences. If Sarbanes-Oxley disrupted business back in 2001 (as it still does), imagine what the next wave of regulatory burden is going to bring.
2 Greater visibility into corporate performance. Only companies with the firmest of grip on their operations will come through the next three years unscathed. Apart from the spectre of a recession, there are such issues to cope with as high oil price, high inflation, weaker commodity prices, rising interest rates, soaring electricity costs and diminished availability, higher water and property rates, cautious corporate procurement officers … the list continues. Only companies which can bring a razor-sharp focus on the detail of their activities, from activity-based costing to reporting, from budgeting and planning to financial consolidation and the balanced scorecard, will pull through unscathed. Even then, it will be a close-run thing.
3 Enhanced competitiveness. Not every company will grasp the imperative to improve their processes and supporting data through this period: it will be a minor miracle if even half of them do! So those which do so today, focusing on detail and digitising their core processes through the principles which make EPM work, will be in a potent position to take market share, acquire their competitors, and generally outperform the market. Harvard Business Press reports that over time, companies which have digitised their business processes are far more competitive, profitable and able to accommodate change. This change takes the form of new regulatory compliance, merger and acquisition, entry into new geographies, new IT systems, and more.

Almost alone, EPM has the potential to fulfil all of these requirements. So there’s never been a better time to embrace this most strategic of business disciplines.

Gain Insight into Human capital with PM

Every organisation in the world depends for its success on three pillars: process, technology and people.

It is pretty much common cause that most organisations have their process and technology taped. The work done by Big 5 and other consultancies over the last two decades has seen to that.

In particular, the consultancies have applied the precepts and principles of business process management and enterprise architecture to make sense of their processes and technology, respectively.

Which brings us to the third pillar of organisations: people. Two axioms suggest themselves: People are the lifeblood of any business; and people are the greatest cost centre of any organisation.

It was the father of capitalism, Adam Smith, who first coined the term “human capital:. He identified four types of capital that comprised a company’s fixed assets: 1) useful machines, instruments of the trade; 2) buildings as the means of procuring revenue; 3) improvements of land and 4) human capital.

Ironically, most companies implementing an enterprise performance management (EPM) suite will focus on the first three, while ignoring the final one. EPM in this case is defined as a set of management and analytic processes, supported by technology, that enable businesses to define strategic goals. Yet human capital has much that needs to be managed and measured, and which if not made part of the EPM suite, will undermine the overall value delivery.

People provide the business with some of its leading, rather than lagging indicators. As happy customers are a consequence, in part, of happy employees, employees are a critical leading indicator to the performance of any company.

In making human capital part of the overall EPM process, a company should be looking to answer questions such as these:

  • Is there a detailed, rigorous process and structure for human capital? It should include an organisational chart, job descriptions, selection process, regular performance appraisals and comprehensive evaluation, training schedules and reward and recognition.
  • How many employees do you have, by position, are they ideally deployed, and are there critical positions vacant?
  • Are employees productive in their specific positions? If not, why not, and what can you do to amend the situation?
  • Are employees focused on critical metrics such as quality and delivery on time?
  • Are your employees happy, and can you judge what constitutes happiness? To quantify this, it’s ideal to conduct regular employee satisfaction surveys – at least twice a year.
  • Are your customers happy with your employees?
  • Your employees expect feedback – in all likelihood it was promised to them. Are you delivering in line with this expectation?
  • Are your employees being properly trained? Is their training in line with SAQA requirements? Are you claiming back your input costs? (Tip: You are almost certainly losing many thousands, if not millions a year, through not claiming against your training levy.)
  • Does every employee have a growth path? Has this been identified, or are there square pegs in round holes?
  • Is your selection, identification and recruitment process scientific? Is it traceable, answerable and auditable?
  • What progress are you making towards BEE targets, across the multiple pillars of the Codes of Good Practice? What is BEE returning to your business, if anything?
  • Given that people are your greatest cost input, do you know your staff attrition rates? Do you know why they left, is there a pattern, and given the cost of people, can you identify a commonality in why people left, and could you have persuaded them to stay?
  • Are your people easily able, and with some degree of automation, to report via the Balanced Scorecard?
  • Can you measure productivity, such as sales and profit per employee, gross margin per employee and margin per hour worked? Each of these provides a good metric for your organisation’s productivity.

Chances are your company is like most others, and you will not be able to answer these questions in the affirmative. If this is the case, you would be well advised to consider implementing the human capital-centric components of an EPM suite.

It will close the loop that links your process, technology and people, and ensure that human capital benefits from the integrated, single-version-of-the-truth management process that is EPM.

Steps 9 and 10 to BPM Success

9 Make IT part of your team. There is a temptation to view an EPM project as the preserve of business: it deals, after all, with corporate measures and issues: budgets, actual, variance, reporting, financial consolidation and planning, to name a few. But in every case the data and platforms which will be used to deliver EPM will come from IT, and without the direct, explicit and engaged involvement and cooperation of IT, the EPM project will not succeed.

In this regard, it is ideal for the project champion to be high-level enough to straddle IT and business and ensure they form a unified team.

10 Build a quality implementation team. Such a team must be composed of high-quality external consultants along with the best and most qualified internal users. The consultants will be responsible for designing and delivering the EPM system to specification, within budget and on time. They will spend time with the internal project manager and system administrator to ensure an orderly transfer of responsibilities and duties, with the ultimate aim being sufficient knowledge transfer and ownership of the new EPM system to the internal team. There can be no long-term dependency on the consultants, as this hinders return on investment and increases total cost of ownership.

The steps identified above, in conjunction with those nominated in the previous posts, will significantly boost your chances of EPM project success.

8thM@nC0n5ult1ng

Steps 6-8 to BPM Success

6 Bring the right partner on board. EPM is not something lightly tackled, and without the right partner you could find yourself down a skill-strapped creek without a paddle.

There are people who do this every day, morning to night. It’s what they know, and what they do, and with the best will in the world you simply can’t replicate that experience – and neither should you want to. A consulting and implementation partner can help you improve your chances of success and reduce the time and cost taken to implement it.

But do be extremely careful in selecting your EPM partner: not all have the same level of experience, and you will need successful referral sites, with a proven track record of delivery.

7 Set an end-date for the implementation, and ensure deadlines are met, and that all has been delivered within the time constraints. Your EPM project office is vital here. Critically, ensure that achievable goals were set right up-front, and that they were met and can be measured. Then, knowing the business will always want more, set your sights on the next set of EPM applications. After all, EPM is a lifelong journey, not a single destination. You may begin with financial consolidation, but then rapidly progress towards budgeting, planning and scorecarding.

8 Nominate the users and ensure they are trained properly. There can be nothing more dispiriting for an executive to commit his name to an EPM (or BI) project, allocate money, time and effort to it, and then find a year later that users are not using it in significant numbers and not making it part of their daily lives.

The way around this is to identify which users will derive most value and then train them properly. And do note that training is not a one-off: users need frequent auditing to see if they are making use of the new EPM application; where there is a shortfall of knowledge; what value is being derived; and corrective action.

It may even be necessary to involve very high-end consultants to ensure users are happy, that the right ones are using the system, not building parallel structures in Microsoft Excel, and that ongoing training matches that of the future roadmap.

STEPS 3-5 TO BPM SUCCESS

In this installment, we will look at the steps 3-5:

3 Deliver the project in phases. It has often been said that the best way to eat an elephant is a bite at a time. Similarly, BPM is best implemented a phase at a time. Deliver one phase, show short-term value, and let internal word of mouth drive broader acceptance and takeup. It is a time-honoured approach, based on the concept of the virtuous feedback cycle, where one success drives word of mouth, which leads to increased demand for services. This cycle becomes self-sustaining for a period of time if delivery is maintained. Each phase should also be viewed as an opportunity to deliver enduring value, on its own, but within a grander scheme of things. In other words, start small, but aim high.

4 Assume ownership. The organisation owns and will always own the data, the supporting applications and the processes and must take control as soon as possible, and not relinquish it, even if it outsources aspects of its deployment and management. Control should commence at the analysis and design sessions and continue for the duration of the project. It might be tempting for an organisation to depend on external consultants for project success, but rapid and sustained skills transfer must take place while the project is in its infancy, to completion.

5 Keep the lines of communication open. It has often been said that having a great product and no way to tell the world that you have it is like blinking at a gorgeous blonde in the dark. You need to create an internal capability to tell those in your universe about the successes you are achieving. Not only that, you need to be able to communicate to the broader community: as noted, success breeds success in a virtuous cycle.

In the next installment we will focus on steps 6-8.