5 Steps of a Holistic Financial Transformation

Finance top performers focus on talent, understand analytics, drive for quality, eliminate non-value-added tasks, and optimize finance delivery in the finance transformation process. The rewards – such as less than a 1% error rate, a three-day-faster close, and 40% lower cost - can be significant.

During a recent presentation at the March 2019 FEI Committee on Finance and Technology (CFIT) meeting, Accenture’s Brad Gelber explained that there is no single path to finance transformation that is right for all organizations. But reducing self-inflicted complexity is a critical early step in a every transformation journey. It is also important to balance “Finance for Finance,” which is oriented towards operational productivity, agility, and effectiveness, with “Finance for the Enterprise,” which is oriented towards the generation of added value to the enterprise and is client-facing. 

The key concepts for finance transformation are: eliminate, simplify, standardize, automate and consolidate. These concepts are not applicable to all organizations, but each should be investigated carefully to discover how they can move the enterprise forward in the digital age. For example, when you have multiple staff performing a piece of a task, whether implementing shared services and taking on pieces of work from the business or implementing end-to-end process ownership, suddenly there are linkages that didn’t exist before. In this case, two things can happen:

• Work is duplicated and creates inefficiencies
• Work is not done and tasks fall through the cracks

It is crucial to rethink a process step-by-step and challenge it. Also, not every process change requires a significant investment in dollars or people. Sometimes companies will jump to the conclusion that if they automate, their costs will go down and everything gets better. However, automation is not the answer to all process change.

As tasks are automated and require less processing, the skill sets of your employees change and roles become more focused on enterprise supported activities – planning, analyzing, advising.  The finance work force of the future will be digital and adaptive. Can you reskill your staff for other roles such as Digital Tax Advisor, Market Master or Financial and Social Data Integrator?  A new workplace strategy will take hold, using this adaptive workforce, to increase organizational flexibility. This strategy relies more on freelancers, agencies, and part-time talent.      

The benefits of being digital can be substantial. The following can be used to improve effectiveness:  

• Value-added tasks: more time spent on value added activities
• Planning, budgeting and forecasting: iteration reduction
• Formalized data supply change: formalized data governance & enterprise data architecture
• Predictive information based on analytics capabilities

The following can be used to improve efficiency:

• Increase in productivity
• Reduction in cycle times
• Human mistakes eliminated through automation
• Digitalization of finance function could yield lower cost

These three digital imperatives will drive the next wave of transformation

1. Eliminate manual intervention to accelerate results and improve efficiency

• Touchless finance: eliminate manual processing through digitization and automation primarily for tasks and activities that can be scaled and drive high value, freeing up capacity and time for finance resources.
• Digital finance core: create digital finance foundation with ERP extended by transactional robotics and machine learning to accelerate processing, eliminate reconciliations, and perform allocations in real time.

2. Power real-time decision making to improve performance

• Analytics powerhouse: move from reporting the past to intelligent forecasting and harness the power of financial analytics to drive real-time decision making. Find competitive advantages and identify risks and opportunities for business growth with actionable visibility to trends and simulations of new business models.
• Enabling business strategies: enable end-to-end mergers & acquisitions strategy, deliver real-time intelligent insights, reduce risk, and accelerate integration and value capture to improve overall deal confidence.

3. Unleash future workforce to improve value

• Boost finance talent: reorient capabilities of the finance organization from accountingand controlling to planning and advising by developing analytical skills, hiring data scientists and infusing new talent with an analytic mindset
• Structure/Org/Roles: evolve form shared services to an intelligent back office with control tower functions to ensure accounting accuracy and an innovation office based on continuous improvement. Finance professionals collaborating with business and operations to protect financial value of business strategies.

The digital landscape is changing rapidly every year. Emerging and cutting-edge technology that were new and exciting a short time ago is now foundational, easy to put in place, and less expensive. Now that this technology has matured, it has become required, not optional.

It is incumbent on finance leaders to take the right initial actions to shape a positive future for the business and the finance workforce. Here are five steps to get you started on your way towards finance transformation:

1. Set a future-state vision, based on what automation will mean for the business, the finance organization and the individual worker.
2. Create a digital workforce strategy and agile implementation plans that take future talent requirements, automation potential, and the need for new roles into account.
3. Identify opportunities to automate finance tasks, based on value potential and effort. Select one or two areas for pilot programs to demonstrate value.
4. Make the finance organization change-ready. Define a new operating model and roadmap. Explore opportunities to form an adaptive workforce.  Refine jobs/roles, and establish new governance, leadership and performance management practices. Establish a culture aimed at continually enhancing the workforce experience.
5. Implement business automation and augmentation plans more broadly. Transition to an adaptive workforce and build skills, as needed. Establish new talent pools, platforms and development programs, and identify new metrics (beyond cost and efficiency gains).