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Finance Transformation – improving performance and planning

Finance Transformation – improving performance and planning

Adam Gates, Lead Principal at Odgers Connect, talks to finance transformation specialist Surit Patel, about transforming the finance function to improve business performance and planning

Transforming the finance function is still a relatively new concept for many organisations, especially when it comes to using enabling technologies and updating legacy systems and processes. Often, there is hesitation from CFOs and Boards to invest in finance transformation when the short-term reward is more immediately obvious and tangible in other functions. However, an increasingly complex business environment undergoing rapid evolution is now driving demand for CFOs to provide data-enabled decision-making tools and real-time financial analysis. Talking to finance transformation specialist and independent consultant Surit Patel, we found out how organisations can implement the right digital initiatives and technologies to successfully transform the finance function.

Organisations have been investing in the digital transformation of their product and service portfolios; this mix of new and legacy operations has resulted in the need to constantly review how processes are organised, simplified and automated. However, resistance has come from the difficulty in quantifying the benefits and the lack of best practices to draw on; “the place to start is business processes, not replacing technology,” Surit explained, “this is the low-hanging fruit that can deliver the highest benefit at the lowest cost. You need to convince the board with quick wins around process change and then, as they see the benefits, you can get the buy-in to invest in new technologies to support these new processes”.

By transforming processes first, you’re likely to achieve efficiencies in performance management and improve the ability to make decisions across finance wide areas of the organisation. This improved business information feeds into other projects and initiatives, resulting in better performance of the organisation. For example, by redesigning the business planning calendar in one organisation, Surit ensured that processes weren’t repeated across different departments and that the business as a whole was more coordinated, with relevant information provided at the right time. It’s something that required stakeholder engagement and meant organising workshops and planning sessions across the organisation.

With business processes aligned and benefits delivered, it’s easier to convince key stakeholders – i.e. the CEO and Board – of the benefits of investing in new technology-based enablers. What’s more, with a range of technological advances, digital transformation is now a more realistic goal for the finance function to achieve; it is becoming easier for example, to implement cloud based solutions, planning tools and connectivity platforms. Combined with the availability of larger data-sets and the accessibility of algorithms and analytics methods for teams to process them, it means that a lot of repetitive and time-consuming tasks can now be digitised.

“Companies who haven’t invested in their finance function often face issues with their enterprise resource planning (ERP) systems. However, with a growth of Robotics Process Automation (RPA) systems, automating processes associated with ERP systems can now be achieved at low cost, resulting in time savings and teams being freed up to carry out more value added tasks,” Surit told me. RPA is proving an invaluable technology for finance teams. Budgeting and reporting segmentation are two areas that are often still carried out on spreadsheets but can be redesigned to be less manual and more insightful. It is these types of tasks, Surit informed me, which can easily be automated to improve efficiency. 

Other technologies show equal promise for the finance function. The data to generate forecasts and influence strategic planning and decision making lies with the CFO and can be enhanced through the use of data visualisation and analytics tools to offer real-time financial information and insights to improve business performance. This includes sales data, orders, supply chain information, product demand and market statistics. By digitally transforming the finance function, CFOs can use this information to identify hidden growth opportunities and to create predictive ‘early-warning’ models around risk planning and compliance.

Transformation of the finance function will not be an all-encompassing overhaul. CFOs can start by identifying legacy processes that can be improved at a relatively low cost in order to demonstrate the value of transformation before engaging with new technologies. This is where an independent consultant can prove to be very effective in identifying high-value targets that can be used as proof points to ease in the eventual rollout of digital technologies across the entire function. With the business environment changing faster than ever and leaders placing more value on data-driven insights, the finance function is ripe for transformation. However, CFOs will need to take the first steps in engaging internal stakeholders if their vision for transformation is to be realised.

For more information, please contact Adam Gates or one of the team on 0207 518 2629

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