"If you cannot implement strategy into everyone's daily work, the strategy has failed" - strategic performance measurement framework for finance

Abstract

Finance -function has been in the center of changes during the past decades due to the increasing competition, globalisation, overall changes in the business environment and the constantly developing technology. It is noticed that internal accounting, especially CFO and controllers have strengthened their position with regards to organisations core businesses and strategy. Whereas finance is still a support function, which needs to be done in most efficient and cost saving manner. Hence, there can be acknowledged a paradox in the prevalent circumstances where finance balances between the roles of isolated routine based supporter and key strategic influencer. A strategic performance measurement framework enables organisations to consider the both roles of finance. In addition to the desired efficiency and cost savings the increasing role in organisations core businesses and strategy can be enhanced.

The research around the area of strategic performance measurement is multi-faceted and widely acknowledged. There are studies from various perspectives from designing and implementing to avoiding the drawbacks of performance measurement. Link between the measurement system and organisations strategic objectives is strongly recommended, however the link is often missing and performance measurement system is established only on operational level. In addition, the change towards team-based work and its different requirements is also acknowledged in performance measurement research.

The aim of this Master's thesis is to examine finance's role in organisation and its strategy and to construct a strategic performance measurement framework for the function. A constructive research approach was applied by combining the data gathered by interviewing 9 specialists from the area and the existing research from the phenomenon.

The construction; strategic performance measurement framework consists three different perspectives; personnel, financial and processes, from where the finance can be measured and enhanced its efficiency. Management, the main customer group of finance, is guiding the framework together with organisational strategy. In order to exploit the framework in its full potential, it is vital to first evaluate and examine the role, position and expectations of finance in an organisation and then consider the actual linkages and objectives from organisational strategy. In addition to strategic perspective, the framework can also be used for enhancing operational efficiency of finance.