The term itself finance transformation is loosely defined and is hardly a new phenomenon. For now, let’s agree that finance transformation is about changes made to people, process and technology that provides an improvement in the performance and effectiveness of the finance organisation and that it is a continuous journey.
Companies go through this journey for many reasons including:
- Cost reduction
- Improve performance
- Enhanced control
- Integration & migration
There is a magnitude of finance transformation literature available anywhere you look, however most of the information available focus on the drivers or the deliverables of finance transformation and not on the challenges involved. As a company embarks on a finance transformation journey, there are a number of challenges that it will encounter across all levels of the finance function. A well-defined, integrated approach will help companies overcome these challenges.
Finance transformation is about changes made to people, process and technology
A constant journey of improvement
It is important to understand that finance transformation is a constant journey of improvement.
A summary of the challenges during a transformation rollout can be defined as:
1) Lack of executive sponsorship
A clear tone from leadership is imperative when trying to see a transformation effort through to completion. Senior management’s buy-in cements the transformation’s legitimacy and verifies it is not an ad-hoc initiative but rather a journey to achieve a well-planned, desired outcome.
2) High costs
Any organisation redesign is costly, especially systems. A detailed business plan will ensure transformation efforts stay within scope and budget. Establishing a clear roadmap will keep the end goal in sight.
3) Lengthy timelines
Implementing systems, designing new processes and training employees require significant time. Prioritising transformation efforts and setting tangible, short-term goals keeps employees motivated and establishes check-ins to evaluate progress.
4) Intimidating process
Announcing a full-fledged transformation can overwhelm employees and cloud priorities. A precise approach aligned by process or department allows the organisation to focus on pain points, avoid transformation fatigue, and realise a faster return on investment.
5) Lack of agility
Engrossing a business in a two-year transformation project may limit its ability to adjust quickly to changes in the market. A more pointed approach to transformation will allow the business to adjust course if needed.
6) Poor communication
Transformation teams need clear, firm direction around what they are attempting to install, create, consolidate or eliminate, otherwise transformation initiatives can be perceived as offloads from management. Communication is not merely an array of emails, but rather tracking, managing and communicating progress — and celebrating the small successes
7) Misaligned talent
While it is beneficial to have internal personnel invested in a transformation effort, it is critical to understand the strengths and weaknesses of the project team so external resources can be brought in to supplement as necessary. Internal expertise combined with fresh, external perspective will drive the best chance for transformation success.
The finance transformation journey can be quite rewarding for those organisations who succeed through by having a sound strategy with a well-defined approach. Successful transformations elevate finance to be a valued, capable, and trusted “partners” to the rest of the business, with deep institutional knowledge. To achieve this, the finance organisation must align to business strategy and then identify the most cost-effective way to accomplish an optimal balance between governance. efficiency and insight.
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