Emerging role of finance managers T.

Satyanarayana Chary INNOVATIVE financial planning has become a sine qua non for companies to adapt t o the changing business environment caused by liberalisation, globalisation and de-regulation. In these competitive times, survival depends largely on an organisation's capabi lities to anticipate and prepare for change rather than just react to it. The ro le of the financial officer, thus, becomes crucial to meet these technological, economic and political, changes. Observe how these changes affect an organisatio n: Many companies have become technologically obsolete. High launching costs and sh ort product lives make it more challenging for the Chief Financial Officer to en sure cost effective operations. Today, economic changes have become major structural forces in the development a nd growth of the world economy. However, these changes have had profound effects on the developing economy creating higher competition in strategic areas, large r markets and different currency alignments. The economic changes that effect th e financial planning of a business enterprise are: Direction of trade, GNP posit ion, creation and distribution of wealth cost, price of material, etc. The changes in the distribution of wealth, raw material prices and mergers acqui sitions also affect the investment and the consequences of these for the finance managers are several. He has to juggle several variables, such as the type, per iod, locations rate of return and other conditions. Political stability is recognised as one of the vital factors for the rapid soci o-economic development of any country. Political instability and uncertainty hav e jeopardised India's economy, and disabled the corporate sector. The finance manager's role is undergoing enormous change. He is transforming fro m a steward of financial assets into an internal venture capitalist because tomo rrow's finance managers will be much more involved in deciding the future of the ir companies. He will have to assess the risks in funding these opportunities an d be prepared to justify investments based on the value they will create as opti ons in the future. Because of these challenges, a finance manager is a partner to the CEO who is ac tively involved in anticipating industry trends, launching new ventures, valuing intangible assets, and managing business options far more dynamic. Critical responsibilities Designing and fine-tuning a more responsive "Rolling Forecast" budgeting process . Breeding new economy businesses from within and releasing value through M&As, pl anning, negotiating and overseeing strategic alliances. Managing physical and even working capital will become less and less important a s the focus of finance shifts increasingly to intangible assets. How these assets are valued and nurtured will have little to do with accounting goals. Dramatic changes in resource allocation. Dynamically balancing investments between old and new economy ventures will be e ssential to fuelling growth and shareholder value.

Leading the effort to align the strategic plan with the new operating mode, chan ge the organisation structure, build the information systems and infrastructure, and develop the reporting and measures required to enable the enterprise to ope rate as smaller, independent business units. The fortification of finance is the driver of change. From safeguarding the asse ts of the company to being answerable to investors, finance is the voice of orga nisation. The meteoric growth in the use of Internet has compelled corporates to take a second look at the factors that drive their businesses. The old rules no longer work in the new arena. In the hi-tech age, one can no longer group fundamental activities and manage th em collectively. Enterprise resource planning systems provide companies with the ability to opera te, manage and control the fundamental activities of businesses as individual en tities. If the think-tanks in the domain of finance take the help of the information tec hnology, they can become the innovators in the new millennium. (The author is Assistant Professor, Department of Business Management, Alluri In stitute of Management Sciences, Warangal.)