Asking the Experts about Financial Management
 |
|
This month in our Financial Management section, we interviewed Henry Hirschel, Director of Information Technology at Club One. Although much of Henry’s background is in IT, he holds multiple academic degrees, including a master’s degree in Business Administration in Accounting/Management. We spoke with Henry about the role of finance in an organization, and what information drives financial processes.
|
The first question we asked Henry was how strategic goals of an enterprise inform tactical planning for financial initiatives. He said that to start, tactical planning of financial initiatives requires an understanding of accounting goals and processes. Accounting measures and records results to stakeholders reflecting on the health of an organization. The strategic goals become core requirements within those initiatives, and the subsequent plans used to execute initiatives. From the results one is able to determine whether you are meeting the strategic goals, or if the goals need to be reviewed in light of resources constraints or because of other factors.
The next question asked what information is most important in estimating financial costs of planned projects and programs. Henry indicated that above and beyond all other information, the first and most important piece of information necessary was the need to know what the user requirements are. He said that without knowing what deliverables were expected, you would be unable to determine what the total resource demands would be. Once you know what is expected, you could break it down into it’s components, assign costs, and then determine, both internally and with your potential customer, whether the resource requirements justify the expected outcome. This should be incorporated into the projects ROI.
The final question we asked Henry was how he viewed finance’s role within the larger scheme of the organization and why. He replied that finance was responsible for reporting the financial performance of the organization. Stakeholders rely on financial reporting to value the organization. This reporting reflects the success (or lack thereof) for each area within the organization. Finance provides a picture of the presented condition of an organization that is recognized by stakeholders. Operational performance adds an additional perspective providing a difference view of the organization. When put together, finance and operations creates a picture of performance from several perspectives providing a balance to evaluate overall performance of the organization.
.
|
|
