Before Embarking on Finance Transformation, Consider These 5 Things
Because the role and scope of the finance function accelerated and diversified in the aftermath of the 2008 financial crisis, it has become increasingly difficult to justify costly, multinational, multiyear projects of the kind popularized in the early 2000s. As finance tries to navigate change while juggling competing priorities and agendas, undergoing a large transformation program is significantly riskier.
Like an expert surgeon making only the most efficient incisions, organizations must focus on smaller, incremental interventions that target operational excellence. Finance executives should consider thinking of finance transformation as “finance refinement,” to set a tone for a more targeted, less daunting approach. As you embark on a more agile approach to finance transformation, consider these five steps to ensure that the transformation is purposeful, organized, and communicated company-wide.
All finance transformation projects should begin with the big question: Why? Setting a destination vision provides a target that articulates not only what finance wants to be, but also how it will support and meet business, corporate, and regulatory obligations. With this vision, finance can identify the full menu of change requirements. Then, through a prioritization maturity matrix, the organization can select the most valuable projects based on cost and return metrics.
Communicate the vision.
Setting a vision is central to getting everyone on the same page, and effective communication and collaboration skills are paramount to pulling this off. Two-way communication is critical to avoiding mistrust and gossip that are common to a high school cafeteria, but have no place in a business.
Engage the team.
Conversations surrounding a transformation effort can have a material effect on a project’s perceived and actual ability to deliver its intended value. Management should create engagement in the process by reminding team members that transformation has the potential to be a rewarding creative journey for the finance function as well as the business. Skepticism quickly turns to excitement as key resources debate and arrive at conclusions.
Welcome, capture, and evaluate employee feedback.
Once priorities are set, it is imperative that everyone across the business and finance functions understands that input continues to be welcome after the process commences. Any internal dialogue must be properly captured and evaluated. Comparing feedback from both the business and finance communities can provide valuable insight into the perceived versus actual performance of the finance function.
Rely on a clear project plan.
Feedback coupled with a proactive approach to planning is key. Project plans often look impressive but have not taken all necessities into consideration. Ignoring a problem will not make it go away and the price paid will be reflected in the level of value achieved.
Robust plans with clear project management protocols provide the level of transparency required to manage key stakeholders’ expectations. Champions across the business and finance need to drive change by applying tact and emotional intelligence to deal with blockages and resistance. Rather than ignore issues and allow change projects to stagger on, a strong mechanism is needed to respond to roadblocks that can hinder momentum.
Transformation delivery is most impactful when members of the finance and business organizations are engaged at all levels. A tactical approach to transformation means there should be as much of an emphasis placed upon planning as there is on communication, with both efforts feeding into each another for a successful implementation of change.