Arati Porwal, Chief Representative, CIMA India, extrapolates the critical role management accountants are beginning to play.

Today’s global economy calls for a paradigm shift in the role of the accounting profession across all industries. Dipping economies, global competition and the collapse of large financial corporations across the world have led to a serious re-think of how the accounting/ finance profession must play a larger role in creation of solutions for sustainable businesses, rather than dovetailing financial figures for market price determination.

CIMA’s research report – Rebooting Business: Valuing the Human Dimension, 2012, reveals that CEOs acknowledge the clear imperative to go way beyond the financials, and see this as an increasingly important issue to tackle. CEOs believe that the answers to business conundrums lie in new levels of collaboration between executive teams, external experts and other stakeholders. Whilst CEOs state that they need help to ‘connect the dots’, only 12% of all CEOs in the survey revealed that they most likely turn to their finance team as a whole to measure non-financial value. They are far more likely to escalate the request for such information to the executive team instead.

The study also clearly reveals that CEOs have an unmet need here since they have to go to multiple sources to gather this vital information. Senior managers are desperate for better information to make better decisions. This demonstrates that measuring non-financial value is not something where the finance team is regarded as having expertise.

James Singh, Executive Vice President and Chief Financial Officer of Nestle states, ‘Well, we have to move beyond the financials. We have to move beyond the numbers and become true business partners. Therefore, we have to understand our business. We must understand where the business is creating value, where it is destroying value and recommend value added options to improve.”

This is where the opportunity lies for management accountants to establish their expertise. Over the past decade, the role of accounting has changed with the entry of management accountants. Management accountants not only carry out financial performance reporting, but also manage business opportunities surrounding the company. Nonfinancial, qualitative data, prediction models, external research and environmental factors are all taken into consideration before financial decisions are arrived at in a company.

Within an organization, a management accountant is the most able person to ‘connect the dots’ to support forward-looking decisions for the CFO and CEO. In effect, a management accountant can also be referred to as a business navigator as he or she is a core supporter of the key areas of decision making that a board is responsible for. A management accountant is able to determine the integrity of information, interpret that information, and use insights to inform or make good decisions.

Management accountants are best placed to be able to convey technical terms and analysis in a straightforward, clear way, while recognizing the implications of this analysis across the business – connecting the dots.

Globally management accountants are highly regarded for the analytical and decision-making skills they bring to the table. They are not confined to working with the finance function alone, but enjoy the advantage of working across the business, joining the dots and helping the business to succeed.

Dell’s experience
Take the example of Jon Rhymes ACMA, CGMA, EMEA Service Business Development Finance Director, at Dell. Jon and his team have responsibility for large, complex bids within the EMEA region. He and his team of business development ‘pricers’ work closely with bid teams and sales colleagues to help construct deals for IT infrastructure and cloud computing services.

Rhymes’ team now works with Dell’s consulting and managed services organisation on the financial aspects of high-value deals. Sales guys at Dell welcome his team’s inputs as it helps them to sell and assists with internal approvals. His team members often attend customer meetings, says Rhymes, and management accountants are particularly well suited to customer liaison work. Their management accounting expertise has helped Dell enhance its service sales values by almost 10%. Considering average deal values being between USD 50- 100 million, this means a lot of money to the table.

In India, the entry of global conglomerates and brands has led to the increasing acceptance of the role that management accountants play in businesses. Given their ability of cross-functional navigation and coordination, management accountants have been creating path breaking processes in HR, staff management, cost management reporting, risk assessments, procurement programs, etc to bring about dramatic changes in companies’ bottom lines.

Organizations recognize its management accountants as the business navigator who map the journey through strategic and operational planning and align KPIs to outcome, while providing support to the business with effective risk management processes that allow for sustainable business growth.

Currently there are over 4,000 CIMA qualified professionals in India. With overwhelming global recognition of the skills management professionals bring to organizations, there continues to be a strong demand for this professional qualification.