{"id":8852,"date":"2022-04-05T12:22:22","date_gmt":"2022-04-05T10:22:22","guid":{"rendered":"https:\/\/www.sqorus.com\/hr-and-finance-support-functions-at-the-heart-of-african-companies-performance\/"},"modified":"2024-08-20T17:10:36","modified_gmt":"2024-08-20T15:10:36","slug":"hr-and-finance-support-functions-at-the-heart-of-african-companies-performance","status":"publish","type":"post","link":"https:\/\/www.sqorus.com\/en\/hr-and-finance-support-functions-at-the-heart-of-african-companies-performance\/","title":{"rendered":"HR and finance support functions at the heart of African companies’ performance"},"content":{"rendered":"

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This dynamism is the result of a more favorable business climate, sustained growth in GDP and export volumes, the announced implementation of the Free Trade Area (FTA), the development of e-commerce and the digitalization of certain sectors of the African economy. To cope with all these changes and remain competitive, African companies will need to be able to mobilize the right talent at the right time. <\/p>\n

They will also have to work on better capturing the flows and have a relevant analysis of their accounting and financial data with adapted KPIs and reporting. A strong Information Systems Department (ISD) and strong support function departments (Finance, HR, etc.) will enable companies to deploy the appropriate strategies. To do this, these IT departments and support functions must necessarily be the subject of investments likely to improve the performance of African companies.<\/p>\n

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The role of support functions, HR and finance<\/h2>\n

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The purpose of support functions<\/strong> is to improve the management and operation of the company or group. They provide the operational teams with indispensable logistical support. Depending on its size and sector of activity, the company has a more or less extensive organizational chart. Medium-sized organizations may sometimes choose to outsource certain tasks in the interests of efficiency.<\/p>\n

Internally, the Human Resources<\/strong> and Finance<\/strong> Departments<\/strong> are among a company’s key departments. The Human Resources Department (HRD) is responsible for recruitment and training policy. It manages employee compensation and career development. The Administrative and Financial Department (DAF) is involved in all major strategic choices. It seeks funding and participates in the evaluation of internal procedures through management control.<\/p>\n

Against a backdrop of legislative inflation, both at local level and in terms of the numerous rules laid down by major international institutions, the legal department<\/strong> also plays a central role in compliance and risk management. Working closely with the financial department, she negotiates purchase and sales contracts. The issue of personal data protection, as well as the digitization of the support function, which is growing significantly in the life of companies, tends to strengthen the position of the Information Systems Department (ISD)<\/strong>.<\/p>\n

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Support functions to improve company performance<\/h2>\n

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In Africa, as elsewhere, effective financial management is an essential prerequisite for optimizing the company’s operations. This involves setting up performance indicators (KPIs<\/a>),<\/strong> as well as accounting and financial tools<\/strong> to provide a continuous flow of data in real time. Only then will management be able to make the right strategic and operational decisions.<\/p>\n

The digitalization of the “finance” function<\/strong> is now the best way to gather useful information, analyze it and, if necessary, quickly define the necessary corrective measures. Digitization also means reduced risk and improved returns<\/strong>. A 35-45% reduction in the time spent on financial processes can be expected thanks to automation.<\/p>\n

In terms of human resources management<\/strong>, $40 billion is spent annually on this function by companies. The result of this effort is a very significant increase (double) in revenues and profits. The African continent sees 12 million young people enter the labor market each year. This generation is connected and largely feminized. This is an opportunity for the continent, which must be supported by a proactive approach to the search for new talent or by the implementation of a training policy adapted<\/strong> to the company and the specific requirements of the African market.<\/p>\n

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The main projects for modernizing the support, HR and finance functions<\/p>\n

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In a study released in 2019, Standard Chartered Bank reports strong development potential<\/strong> for African countries such as Ivory Coast, Kenya and Ghana. The West African economic zone is centered on the metropolis of Abidjan. The World Bank reports a growth rate of 7.<\/strong> 8%, which puts this region ahead of India. This success is due in particular to a calmer business climate, as well as to the remarkable level of development of physical and digital infrastructures.<\/p>\n

The economic situation is therefore likely to attract investors. This commitment is vital for the African continent in order to meet the major challenges, particularly demographic changes. However, if the trend in foreign direct investment is too limited, C\u00f4te d’Ivoire’s current sustained level of growth could be jeopardized.<\/p>\n

To meet the challenge, investors will have to ensure that they activate all the levers of optimization relating to support functions. For this purpose, it is necessary to draw up a preliminary inventory. For greater objectivity, this audit can be outsourced, using an interim manager, for example. The level of digitalization should be assessed.<\/strong> What IT tools are available for issuing and tracking invoices, managing inventory, forecasting cash flow, managing human resources, etc.?<\/p>\n

It should be noted that the introduction of performance indicators<\/strong> and the definition of internal<\/strong> operating procedures that<\/strong> are known and mastered by all the company’s players are particularly important in fast-growing, highly competitive markets. In addition, the African market is often confronted with scarcity of capital and bank credit, coupled with increased risks of default. It is therefore important to be particularly vigilant when managing cash flow.<\/p>\n

As far as Human Resources are concerned, companies must master the local labor law<\/strong> and proceed to the necessary compliance operations. Particular attention will be paid to the emergence of a corporate culture.<\/p>\n

Finally, the HR policy will depend on the company’s position in the market: in a phase of growth and conquest of new markets, an innovative or more defensive approach may be envisaged against a background of restructuring.<\/p>\n

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What tools can you use to manage your HR strategy?<\/h2>\n

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Optimize your HR strategy and discover the essential management tools you need to achieve your objectives. Don’t miss this opportunity to successfully manage your HR projects.<\/p>\n

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See also our feature on “HR strategy management tools”. <\/h3>\n

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