Finance transformation is a buzzword that’s been thrown around a lot recently – but what does it actually mean, and how can your business do it?
When you think of the impetus that drives business growth, it’s unlikely that the picture coming to mind will be of the company’s finance department. Unlike marketing, sales or development teams, the financial team isn’t typically associated with new business development or strategy.
With that said, the facade of finance is beginning to change – financial departments are still acting as reactionary gatekeepers for the business while developing their own strategy. This move towards a strategic redevelopment of the team is known as financial transformation.
What does financial transformation entail?
Upon first glance, the concept of improving your finance department might seem cost-based – after all, this particular area is primarily focused on the monetary concerns of the business. However, there’s much more to it than that. According to OpenView Labs, finance transformation is typically structured around improving one (or more) of the following areas:
- Scale: If the business is growing, so should the financial department.
- Governance: Improving this area entails looking at budgeting, compliance, accounting and generally minimising costs to the organisation.
- Services: Through analytics improvement, the finance department can better deliver insights to internal customers.
Financial transformation is more than just counting coins.
Though every organisation’s approach to financial transformation will be different, there are a few integral aspects that apply to every situation. It’s important for organisations to have a clear goal in mind when undergoing a transformation – without something tangible to work towards, the endeavours will flounder, according to Sue Tindal, CFO of Auckland Council.
Like a caterpillar becoming a butterfly, a finance department’s metamorphosis doesn’t happen overnight.
Secondly, businesses must give the process time. Like a caterpillar becoming a butterfly, a finance department’s metamorphosis doesn’t happen overnight. Finally, make sure the transformation is broad enough and encompasses multiple projects, otherwise it will be too difficult to see the individual achievements as they happen.
How can my business transform?
Enabling your finance department to improve can be difficult, and transformations often fail. According to finance author David McCann, this can happen because the process is too cost-focused, too customer-focused or too finite – luckily, there are ways to make sure your business succeeds.
At 16, we are dedicated to elevating human potential and helping finance teams optimise themselves. With our help, you can transform your business and enhance your capabilities, starting with the financial department. For more information about how Reo can change your organisation, reach out to a representative today.
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