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Should the Cfo Take the Lead or Play a Key Role in Overhauling the Firm's Performance Measurement System?

Autor:   •  April 5, 2014  •  Book/Movie Report  •  638 Words (3 Pages)  •  1,441 Views

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Should the CFO (or the finance group) take the lead or play a key role in overhauling the firm's performance measurement system?

I think CFO ( or the finance group) should take the lead or play a key in overhauling the firm’s performance measure system. A performance measurement can be defined as the process of quantifying the efficiency and effectiveness of action. It refers to the use of multi-dimensional set of performance emasure includes both financial and non-financial measures, and also includes both external and internal measure. It is important that the CFO (or finance group) to play a key role in the overhauling process, because they can effectively projected financial perfomance of the company based on the past financial date to help predict the future financial data.

Yes, the CFO or the Finance group should take the lead or play a key role in overhauling a firm's performance measurement. This is mainly because the performance measurements systems incorporate both non financial and financial measures in routinely measuring the performance of business units against the set performance targets. It is therefore imperative that the CFO or finance team be a major player in the overhauling of the system as they are the ones who give can effectively provide projected financial performance of the company based on the past financial data.

The goal of the performance measurements systems is to measure the profitability improvement in various areas n the business. The role of the financial function within an organization is not only to ensure proper financial record keeping but to also monitor and evaluate the financial performance of every unit of the business. Performances such as employee productivity, or asset returns are always expressed in term of financial measures which are often controlled by the financial team. The finance team is therefore capable of noting whether the performance measurement system is still viable with changing business climate or whether they are able to support the company's business objectives. It is therefore imperative that the CFO and the finance team be in the fore

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