Finance in Government and the Private Sector (Same or Different?)
By Chris Young, Executive Director at Parbery Consulting
Finance professionals and accountants tend to be a pretty adaptable bunch. We’re used to having to come to grips with the complexities of different industries, cultures and often different countries. But there’s one divide that seems to baffle many of us – that between the public and private sector.
Having been on both sides of the divide – I’ve worked for IT start-ups, large multinationals and, most recently, with the Federal Government – I thought I’d try to outline some of the key points of difference and, crucially, similarity between the two worlds.
Let’s look at the differences first.
It will come as no surprise that Government processes can, to the independent observer, seem a little, well, ponderous, whereas in the private sector, the same tasks often seem to be achieved much more speedily. This is largely due to differences in context and environment – specifically, differing drivers and decision-making processes – which ultimately means that pieces of work that might have to be done in 2 weeks in an IT start-up, are often given a much longer time-frame in Government.
I actually thought this would be a real problem for me when I made the switch, and dreaded having to wade through the treacle of Government bureaucracy. However, whilst these frustrations are there, there is an upside: you have much more time to do a thorough and comprehensive job.
There are times when private sector work can seem slightly rushed – there are so many competing demands on your time – so it can be good to have a reasonable amount of time to concentrate on doing a really great piece of work.
The other big difference is environmental: Governments are under different regulatory regimes to private companies and have different priorities and concerns. In the private sector, the idea of ‘value’ can usually be expressed in terms such as net present value (NPV), whereas in Government, the concept is less easy to define; for example, you usually can’t really calculate the NPV of a benefits program or new warship.
This last difference actually also highlights a key similarity. Although it may be expressed in different ways, a finance professional is really concerned with the same things in most environments: ensuring financial data is accurately and timely reported, that key financial controls are in place, that a financially optimal decision is made, etc.
Many of the seeming differences are actually language related. A Defence Chief may not talk about revenue, but they may talk about capability; “How will I get the best capability for Defence per dollar invested?” And the EL2 (Senior Manager) at Centrelink might talk about ensuring eligibility compliance; but that’s not massively different from private sector financial controls work.
At the end of the day I’ve found the public sector to be just as rewarding as the private sector, while concerned with similar, but different, things. Everyone, in any work situation, needs financial fidelity and input into decision making.
It’s just another way that we adaptable finance people can add value. So what are you waiting for?