Four Ways To Transform Finance In Your Organisation

Civil Service College researcher Celia Lee shares tips on how finance’s transformation can be catalysed.
Four Ways To Transform Finance In Your Organisation

Instead of simply being “bean counters” and performing back-end functions such as processing payments and claims, finance leaders in public sectors worldwide are taking on more strategic roles in their organisations. They are increasingly involved at the earlier stages of business planning, for instance, helping senior management prioritise and allocate resources, so that financial resources are managed more strategically.

Governments find that finance leaders’ involvement in the early stages of planning helps better inform decision makers of the costs, risks, value and returns of projects. This leads to more efficient and effective service delivery, reduction of risk exposures and fraud, and maximises public value.

To look at how finance officers can contribute and add value to their organisations, the Ministry of Finance and the Civil Service College undertook a study on “Value of finance leaders in the public sector”.

Through our interviews with finance leaders, we uncovered four ways in which agencies could transform the role of finance in their organisations:

1. Elevate finance’s position

Change starts from the top for finance transformation. Findings from literature and interviews suggest that senior management should send strong signals by allocating enough manpower and IT support for finance transformation initiatives. The Permanent Secretary or Chief Executive will also have to communicate clearly to the staff on the need to embrace the changes in their daily operations and responsibilities that arise from the transformation. The changes include involving finance officers in strategic planning and cross-functional project teams at a much earlier stage than before. This means teams will work alongside finance officers in formulating policies and evaluating projects and funding proposals.

2. Foster finance talent

Hiring the right people matters. Agencies that want to build sophisticated finance functions must attract new talent and invest in the current workforce to build their capabilities. Besides developing technical skills in IT systems, treasury management and financial accounting, today’s finance officers also need to be able to raise the performance of agencies in areas such as governance and ethics, costing and data analytics. In addition, finance needs soft skills such as communication, negotiation, persuasion and emotional intelligence to exercise its voice in decision-making processes and to pursue improvements that cut across departments. Public sector leaders can identify capability gaps and develop training programmes through classroom instruction, inter-agency assignments or staff rotations to enhance skills and knowledge. Having the right combination of monetary and non-monetary incentives helps to attract and retain high-calibre finance professionals from the private sector.

3. Cultivate a resource- and risk-conscious culture

To establish a resource- and risk-conscious culture, there will be a need to revisit incentives and performance management policies for senior management. For example, performance reviews could specifically include KPIs that are linked to the judicious use of resources. To ensure that fraud and misconduct controls remain effective and in line with standards and regulations, resources should be allocated to anti-fraud efforts and senior management should be held accountable for compliance violations as part of their KPIs.

4. Pilot new finance systems in phases

One way of freeing up finance staff to engage in value-added activities is to invest in technology to streamline routine processes. However, the duration of implementing new systems tends to extend over a long period of time and there could be significant risks for operations. Therefore, agencies could split, pace and pilot these implementations on individual business units, instead of the whole agency. This builds momentum by fine-tuning the systems at paced stages to achieve perfection at gradual steps and also enhances finance’s reputation, which encourages other business units to launch similar initiatives.

Celia Lee is a researcher at the Civil Service College’s Institute of Public Administration and Management. She was part of the team that wrote Finance Leaders in the Public Sector: Value, Roles and Responsibilities. Her other publications include Forensic Data Analytics: Fraud Detection and Prevention in Public Sector Procurement and Talent Management in the Public Sector: A comparative study of Singapore, Malaysia and Thailand.

    Jul 2, 2014
    Celia Lee
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