Andrew Mosely, Deputy Managing Director, writes on design and business analysis
Yesterday I spoke at the third event in our Tomorrow’s CFO seminar series. Over the last year, Metapraxis has run these events in partnership with the Chartered Institute of Management Accountants (CIMA). These seminars are CPD accredited, and we have been fortunate enough to welcome finance leaders from some of the most complex and most interesting companies operating in the UK today.
The seminars provide us with an opportunity to share the results of our latest research and development work, on analysis methodology and technology. Moreover, they provide our clients and friends with an occasion to share the challenges they have been tackling over the preceding few months, and gain insight from their peers on it. Many find this an extremely valuable forum, and some regular attendees have brought different members of their team to successive events.
Yesterday’s seminar focused on the use of analysis to improve performance, and we were very pleased to welcome speakers from our clients Premium Credit Limited (PCL), and WSP Parsons Brinckerhoff (WSP PB).
Andrew Chapman, Head of FP&A at PCL, a leader in insurance premium finance, discussed the challenges of communicating the real drivers of value to a variety of business stakeholders. He demonstrated how a detailed variance analysis can be used to define the causes of short-term margin fluctuations, and isolate those that can be controlled from those caused by external factors. This allows management to make gains by focusing on a few specific areas of performance improvement –a principle that can be applied successfully in any type of business.
John Doyle (Financial Systems Manager) and Mark Curtis (UK Project Accountant), of global engineering consultancy WSP PB, gave a fascinating demonstration of how and why a finance team should test the accuracy of their sales pipeline forecasts. John and Mark illustrated the value of analysing past forecasts in the context of actual historical data. Doing so allows the finance team to verify that their predictions are historically accurate, which can make it much easier for the rest of the business to make decisions based upon them.
Although the two challenges we discussed yesterday are very different, they are similar in one respect – they are both challenges of communication, and that is something our clients ask us to help with on a regular basis. Better analysis should not simply afford finance teams greater insight into the business’s performance, it should also allow them to communicate more of that insight to the leadership of the business. Even business leaders whose background is in finance may struggle to see the underlying messages in the monthly figures, when they are not involved with the detail of their preparation. Better analysis can highlight those messages, and identify those that are most important. Ultimately, that makes for better decisions, and a higher performing organisation.