Finance is the only department that is constant in every type of organization. Every NGO, Private, Public, Government, etc. organizations need a team that can manage the funds it has, can raise the funds it needs and effectively invest the profits and savings in good financial products. Thus, having knowledge about Finance, Banking, Capital Markets, Fund Raising, Corporate Finance, etc. has become very very important for anyone and everyone.
This is a major concern for most Engineers as MBAs are preferred for major roles, lateral shifts and promotions due to their comfort in managing finances. Another aspect that upsets them a lot is the fact that the systems that they design will be operated by them, but they will have to report to an MBA who more often than not has no knowledge about the underlying technicals/ fundamentals of it. So why do the MBAs get a better position than other graduates/ post graduates? The reason is their understanding of Finance and Capital Markets. This is primarily due to the theory that they are exposed to during college.
Now the options that engineers have is to opt for a part time MBA, which is not valued as much as a full time MBA, leave their job and do a full time MBA or somehow gain the knowledge required. This is a difficult situation for most engineers as they either have to live with this stagnation or quit their well paying jobs to pursue an MBA, which may or may not give them the desired job profile after 2 years. Option 3 is the most desirable one, but a little difficult.
So what are the topics that are necessary to build a skill set in Finance?
The most important topic is Corporate Finance. Companies have to raise funds very often. Sometimes it is in the form of working capital loans, sometimes for project finance and sometimes just to make the payments of previous loans and borrowings. Which is the best way to do this? Should you take your private company public, turn to private investors (Private Equity, Venture Capital, Investment Banks), borrow from the market or issue financial instruments like debentures? Making a decision in this regard is very very important as your decision could result in the business flourishing or going bankrupt. A lot of times companies have had to sell divisions, assets, lay off employees, be sold, change management, etc. as a result of bad financial decisions. Hence, taking the right decision here is critical. Also, being knowledgeable is not enough! Having the right connections to get favourable financing for your company is very also important.
In order to build the right connections, you either have to rely on good old fashioned cold calling to build your contacts list, or hope to be studying/ working/ networking at all the right places.
BSE Institute Ltd (BIL) has optimum short term, part time courses for working professionals interested in building their knowledge & skill base. Being located at the heart of India’s financial hub, BIL has the unique advantage of having a bird’s eye view of the various developments in the BFSI industry.
The second topic is that of reading financial statements like annual reports and balance sheets. Learning about Fundamental & Technical Analysis will equip one to understand the financial health of a company or a business. This is important as you cannot know whether you must invest in a company or not without understanding its overall picture. Analysis will help people to understand the company, its business model and most importantly a brief understanding of the business it operates in.
Being able to talk with other investors and financial gurus in terms of numbers and financial ratios is a very unique skill that most people crave for. Being able to quote numbers and suggest stcks to invest is a quality that is respected universally and it opens a lot of doors of opportunity.
At the end of the day, there are a very limited number of openings for CEOs, CFOs and Directors at companies. You have to be willing to go the extra mile to grab these positions. A normal 9-5 routine does not get you in, but if that is you goal, then an MBA is probably the best bet for you.