Managing any company or business in today's business environment is challenging and tougher than ever before. We are living in an era, where business is getting more and more competitive, globalization has made world one big family and events in one economy has impact on other nations more significant than ever before, each and every industry today is becoming more and more technologically driven and influence of technology on every aspect of our life is increasing day by day. Entry barriers are becoming less and it gets easier for others to compete with you. There are unprecedented opportunities to create new wealth, new products, new companies, and new fortunes that never before existed. Every economic activity has finance involved in it. Finance is the backbone of modern business.
If you are running a business, managing an IT project, designing or improvising any business process, it’s very much likely that you will have to deal with financial concepts and financial lingo. Modern processes are integrating every aspect of the business from in receiving, warehousing, inventory control, production, sales, delivery, billing and collection, in fact the entire suite of accounting and management. Irrespective of your particular area or process specialization, you have to deal with finance processes and diverse background is exactly what is being demanded more and more of today's professionals.
Managers in companies large and small, including directors, vice presidents, and general managers, are finding their particular specialties aren't going to carry them to the finish line as they might once have and they need to master three key skills Functional Skills, Domain Knowledge and Leadership skills. Now in today’s world finance and accounting are having an impact on many companies in ways never before thought of by managers outside the financial department. It is a well-established norm now in industry that financial incompetence, or lack of integrity, could not create a good career for you. Today’s integrated processes demand basic financial understanding from every professional, and it is a key skill to keep their current jobs. However, to advance in their careers, financial acumen in a perquisite.
Professionals now need to delve into the reports they have routinely received for years to a degree never before contemplated. They need to understand financial terminology and accounting methods they might previously have taken for granted. CEOs now need to be completely aware of what their people are doing and the financial ramifications; because they will no longer be able to credibly say they didn't know. And finally, managers within a company, whether large or small, are going to need to understand the rules of accounting and the boundaries of proper finance well enough to avoid getting into trouble just because they were aggressively trying to meet their project goals. As for those who aspire to become managers, they might not even get started up the ladder until they can demonstrate this kind of financial knowledge.
As you start growing in your career ladder, your leaders expect you to manage more and more finance and accounting; it becomes so integrated in your day to day responsibilities that you have to master them. For example, consider the new manager who is given the responsibility to run a project for the first time. The first thing he will be asked to deliver is an estimate and budget for his or her project so that organization can release the funding for the project.
Sounds familiar, well how do you begin your budget? How do you anticipate your hardware costs, software costs, vendor expenses, salaries and wages and the biggest objectionable chunk that is travel and living expenses? Well, how about the timelines? How do you start with what you hope you can deliver? What you're sure you and your team can achieve? What your team delivered last year or last month? What will management believe?
And this all needs to end with the biggest question, what is the cost benefit analysis? What are the returns from your program both short term and long term? What you hope you can get approval to spend? Do you actually know what it will really cost? How do you decide how much money or staffing you'll need to reach the goals you want to achieve or that your boss wants you to achieve?
