Components of Commercial Value Chain
Introduction The concept of the value chain was introduced by Michael Porter. The concept helps categories’ activities undertaken by enterprise to deliver a successful product to a customer. The concept since its introduction in 1980s has become a forefront in developing strategies around customer delight and commercial success. The value chain is series of activities…
Communication Systems and Groupware – Information System Concepts that Apply in All Functional Areas of Business
Introduction Information systems can be defined as set of co-ordinated network of components, which act together towards producing, distributing and or processing information. Information systems in conjunction with information technology have various applications in today’s business environment. Communication System The process of transmitting information from one place to another is called communication. The transfer of…
The Changing Face of Business Environment
Introduction The last decade has shown rapid development in the information technology and its application. This has helped changed the way we look at the world as well as the way business is conducted. Both business and trade have gained under the wave of information technology with improvement in efficiency, productivity and bottom line. Productivity…
In the modern global and competitive business world, it is very important to the companies to enjoy financial success. This financial success can be achieved through financial discipline, goal setting and periodic reviews. Companies which have enjoyed financial success are likely to see that trust among employees have increased; profit has improved, and employee turnover has decreased. These three factors contribute a lot to stability in company which in turn is the cradle for growth.
Finance intelligence is a combination of art as well as science. Finance intelligence talks about empowering employees with basic finance knowledge so that they can make a sound business decision. Finance intelligence is a skill set which every senior executive needs to have. Finance intelligence help employees’ right question for a business decision.
Finance intelligence is skill set comprising of the following four competencies; understanding the foundation, understanding the art, understanding the analysis and understanding the big picture. All the four competencies need to be put into practice and implemented for whole hearted success of finance intelligence. Finance is the business language recognized and used across all organizations. It is common denominator on which all the organizations are measured.
Organization needs to build on strong foundation for its non-finance manager to understand the concept of finance. The foundation requires basic understanding of income statement, cash flow and balance sheet. Non-finance managers should not be baffled when presented with an array of numbers. The purpose of finance intelligence is to ensure that when non-finance managers are presented numbers, they should be competent enough to make business sense out of them.
Finance as well as accounting is considered science and art. Both the discipline tries to quantify what cannot always be represented as numbers. This quantification of concept is based upon rules, assumption and principles. Non-finance managers should be able to apply this art/science to scenarios and make financial sense out of them. By doing this, they are prepared for any challenging scenarios.
Once the basic idea of finance and its utility is formulated, the application part comes from the picture. Numbers presented to non-finance managers can be better understood, right questions can be asked, and further analysis can be done around that. Finance intelligence equips managers to make sense of various ratio analyses, return on investment, etc. The new understanding helps them make informed and calculated decisions.
It has been observed that the financial numbers alone do not tell the complete story about what is happening within the organization. A financial result or analysis needs to be understood from top level or broader perspective. A financial result should be analyzed considering the macro environment under which the company is operating. The macro factors which influence financial results are competitive environment, government regulations, changing demographics, evolving technologies, etc.
Understanding the finance concepts and finance intelligence competency are first steps in gaining broader financial knowledge. It should prepare managers to look beyond the finance numbers with an analytic eye and make informed decisions.
Article Written by
Himanshu Juneja, the founder of Management Study Guide (MSG), is a commerce graduate from Delhi University and an MBA holder from the esteemed Institute of Management Technology (IMT). He has always been someone deeply rooted in academic excellence and driven by a relentless desire to create value. Recently, he was honored with the “Most Aspiring Entrepreneur and Management Coach of 2025 (Blindwink Awards 2025)” award, a testament to his hard work, vision, and the value MSG continues to deliver to the global community.
Article Written by
Himanshu Juneja, the founder of Management Study Guide (MSG), is a commerce graduate from Delhi University and an MBA holder from the esteemed Institute of Management Technology (IMT). He has always been someone deeply rooted in academic excellence and driven by a relentless desire to create value. Recently, he was honored with the “Most Aspiring Entrepreneur and Management Coach of 2025 (Blindwink Awards 2025)” award, a testament to his hard work, vision, and the value MSG continues to deliver to the global community.
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Communication Systems and Groupware – Information System Concepts that Apply in All Functional Areas of Business
April 3, 2025
