Adding up the sums of the parts
We keep hearing that companies can no longer afford to keep their financial managers in the back office, but it seems that most are still a long way from achieving adequate financial communication across the whole organisation. For example, the NAO has just released figures showing that the price paid by UK public-sector organisations for a loaf of wholemeal bread ranges from 32p to £1.10 (which makes you wonder where they shop!).
IT firms are quick to offer integrated “solutions” that will enable companies to track all expenditure from the head office down to the lowliest temp, but no accountant, no matter how zealous or how stringent their budgets, can control all spending from above. Ironically, according to two former IT managers in City banks who have now set up a course to train IT managers, IT departments are often guilty of similar extravagances – many IT managers still don’t believe they need to know the business, many don’t adequately understand licensing agreements and maintenance contracts and some are unaware that they are expected to negotiate outsourcing contracts. Given that they estimate that the cost of a single workstation, software and hardware in an investment bank can start at £100,000 (with each licence for specialist software costing a possible £120,000), surely finance teams should be pushing for more financial training for non-financial managers in all departments?