Balanced Scorecard for Finance.
After 22 years in the finance function across disciplines, industries and countries, I am still daunted by the question of effectiveness of the function. What determines effectiveness of the finance function in contemporary organisations? How can we create a KPI dashboard to measure this effectiveness? Like me, most CFO’s grapple with this question and understandably so. It’s not easy to quantify and metricise the value the finance team in any organisation brings on the table. Paradoxical isn’t it? Aren’t we the function that talks numbers and metrics to help business take optimal decisions? Why can’t we measure our own function’s effectiveness? In the following sections, we will look at a framework for finance function to measure its effectiveness and create a balanced scorecard for itself. Let’s start with the role of finance in a typical organisation, which has a value chain characterised by brands, innovation, manufacturing, selling and delivery.
