The Financial Executives Research Foundation, in partnership with Grant Thornton, is working on a research project focusing on the how senior level financial executives need to prioritize their myriad responsibilities with the drive towards digital transformation.
In this video, FERF speaks with Chris Stephenson, Principal, Business Consulting & Technology, Grant Thornton LLP, about how financial executives and create and maintain focus during a transformation project. A transcript appears under the video.
Financial Executives Research Foundation: How would you describe the ways financial executives and IT professionals are collaborating today?
Chris Stephenson: The evolution in IT and finance becoming partners is just continuing to move forward.
As finance professionals today start at the analyst or associate level and move up through organizations, there’s going to be a lot more synergy between IT and finance because they grew up that way.
But I think in today’s environment, there’s a lot of leaders that are either IT professionals or finance professionals, and they still don’t speak the same language. It is time for organizations to get over that. I don’t see any major finance transformation initiative that does not have some sort of IT component. It’s touching the core ERP systems. It’s touching outlying systems. It’s touching changing your processes. And IT is involved in all those conversations.
FERF: What are the biggest risks to a large transformation project?
Stephenson: A lot of transformation projects start as one or two areas of focus. Then it continues to add scope and add scope, which adds time.
And by the time that project is launched, there’s a great risk of failure, but there’s also a great risk that it’s been too long. It’s already behind the curve. I see transformational projects as more of a behavior now. A bunch of small mini projects that grow in a portfolio with a common vision as opposed to going for that big one transformation initiative.
I think the second risk is lack of buy in.
The employees can be a very powerful stopping point if they’re not brought on. Departments can be a very powerful stopping point. So, getting global buy in or at least go into awareness that initiatives are happening, tying it back to strategy, and making sure there is buy in the second important thing.
I think the third is that a lot of companies are getting caught into what is the technology of the current moment. There are more and more technologies out there.
Transformation is no longer a binary thing. Companies are going to continue to evolve, and businesses are going to continue to evolve. And so, getting that mindset that transformation doesn’t have a starting point and a stopping point, but rather continuous reprioritization will allow you to have smaller projects, multiple successes, and move a lot faster than one big project.
FERF: How can financial executives maintain focus during a financial transformation project?
Stephenson: During any transformation, there will be a lot of decisions that need to be made. And there will be a lot of decisions that have data that will require looking at both and unknowns in front of them.
Remembering why you created the project in the first place is for bottom line efficiency.
FERF: What are the industries that are most advanced on their journey towards financial transformation?
Stephenson: I think the industries that are on the cutting edge of overall technology fit into this bucket.
Software systems are on the cutting edge of financial transformation. I see biotech a lot, because they’re finding the next cures to the next diseases so this is just a natural thing for them to want to be on the cutting edge.
Also, with some of the change in the infrastructure spend and some of the tariffs that are being discussed – as well as deregulation — I think there’s some new industries that can to step into new transformation. Professionals should be looking not at what their industries have done in the last 20 years, but what some of the industries I just mentioned and competing industries have done for the last 20 years.
For example, I think manufacturing is something that’s going to have to be figured out very quickly because there’s a lot of potential for growth. Are they ready? Do they have the systems, the processing, the people the place?
Also, I think healthcare has a lot of high end technology and in a lot of ways doesn’t. I think healthcare learned from some of the other best practices.
In addition, you have real estate and the leasing business that are out there. This includes all the financial services businesses, especially with Current Expected Credit Loss Standard for ALLL (CECL) coming around the corner and all the promised deregulation. I think many companies are going to shifting from being Dodd Frank compliant to what we call Dodd Frank efficient, and looking at how the proper processes in place and look more towards value customer activities again.