Finance transformation initiatives are often introduced to improve service delivery and information quality all while keeping costs in line. Realizing the full benefit of a transformation effort is rare. Finance staff get distracted with day-to-day issues and miss the first step critical to achieving transformation success—establishing a vision for the future. Organizations have a better chance of achieving the benefits in transforming their finance organization by following the steps below to create a clearly defined vision.
The first step in creating a process improvement vision for finance transformation is to define the processes which make up the business of the finance organization. Identifying core work processes and critical activities completed within each piece of the process will help determine areas of focus for the transformation initiative.
For example, companies categorize activities surrounding budgeting/forecasting, financial close and consolidations, cash management, and financial reporting into the record-to-report core work process. While the record-to-report business process may be commonly recognized, each company will have a slight variation for logically grouping functions and critical activities into overarching business processes.
Once core work processes are defined, leadership should identify subject matter experts for each business process. These subject matter experts should collaborate in a series of process improvement workshops. The workshops utilize a cross-functional team to identify where critical finance activities and functions intersect with other work streams and detect current issues and challenges with how the finance organization operates.
When conducting process improvement workshops, gain an understanding of both common industry and unique company issues found within each core work process. Then, have workshop attendees collaborate with the other subject matter experts to pinpoint where the pain points and obstacles exist within the finance organization. The workshop output should include documentation prioritizing issues which exist within each core work process.
Based on the workshop output of issues, the executive leadership team is challenged to establish goals and objectives for the finance transformation initiative. Questions such as, “What key issues do we want to address?” and “How do we align the identified issues with our company’s strategic short and long-term goals?” are important to ask when establishing the goals and objectives for the transformation initiative. This information will help create the vision for finance.
It's also important to consider any quick-win action items, which may not be critical or of high priority but can be addressed quickly to have a positive impact on people, processes, and technology. Any quick wins to assist in achieving the desired future will allow the initiative to maintain momentum.
The subject matter experts in finance are then tasked with pairing the challenges and issues identified during the process improvement workshops with action plans to align with the goals and objectives set forth by the executive team. To be more effective in defining what capabilities to include for the future state, break down the list of improvements into easily digestible categories, such as people, process, and technology. Examples might be:
Once capabilities are defined for each core work process, process owners should work together to prioritize which items to address in the short term vs. long term. During prioritization, it's important to account for the impact upcoming changes will have on the organization. First, identify the communication, training, and resources needed to deliver each improvement.
Establishing a vision for finance for the future is critical to the success of transforming the finance organization. Creating a vision defines the role of finance in the improved future-state operating model across core business processes.
Trenegy is a non-traditional consulting firm helping businesses transform their Finance organizations. To learn more, email [email protected].
