IMA’s Vice President of Research & Policy and Professor-in-Residence, Raef Lawson, Ph.D., CMA, CSCA, CPA, CFA, partnered with MyCFO (http://www.mycfo.in), India’s largest and only implementation-and-result focused CFO services firm, to conduct a survey of finance and accounting professionals regarding the state of enterprise performance management (EPM) in India and the role played by management accountants.
Among the key findings:
- The role of the Finance function is evolving in India, as elsewhere in the world, with new responsibilities being balanced with more traditional ones.
- Planning, forecasting, and providing business insights are high priorities of Finance.
- Finance is most effective in its traditional areas of responsibility.
- There is a low level of satisfaction with companies’ performance management systems (PMSs).
- There are similarities between the evolution of the accounting profession in India and other developing countries.
Key challenges for the Finance function in India, as in other places in the world, include poor IT infrastructure and nonstandard Finance processes. Also cited were poor internal relationships with other functions. This makes it difficult for Finance to be considered a strategic business partner.
Comparing results of this study to prior IMA studies yielded cross-comparisons between the evolution of the Finance function in India with other developing countries like China. For example, while regulatory compliance is the number one priority of Indian companies, it is a much lower priority for companies in China and elsewhere around the world.
Today in India there is a great focus on activities related to business financing. But there is a strategic imperative for companies to develop accounting and finance professionals with knowledge of management accounting principles. Forecasting, planning, and strategy are increasingly becoming priorities and newer management accounting techniques such as activity-based costing (ABC) are being adopted by many organizations.