In our previous blog, Part 1: Identifying the Real Obstacles Leaders Face with Finance Transformation, we identified those transformation obstacles finance leaders face within their organizations. In this blog, we’ll identify how finance leaders can master transformation. It’s essential for them to recognize successful approaches because they often take the lead in introducing new ways of thinking to leverage available solutions such as technology, data, and automation designed to drive ROI, efficiency, and increased revenue. These components are critical in successfully addressing challenges finance leaders face in the supply chain and uncertainty in hyper-competitive markets. Leaders must identify and design steps to embrace change and ensure their teams are equipped with the right tools and proper training to bring about successful change.
Delivering Successful Transformation Outcomes
It’s no secret that finance leaders and their teams play a vital role in their organizations. With opportunities to take the lead and champion advanced thinking around technology, data, and efficiency, finance leaders must establish themselves as data-driven decision-makers and position their departments as profit centers.
According to Gartner’s Hallmarks of Winning Finance Transformations, 85% of projects built in unison with in-house talent and resources result in an organization’s quantitative and qualitative benefits. When initiatives are entirely outsourced, only 56% achieve the desired benefits.
While many finance leaders have taken the lead in driving innovation in their companies, too many remain idle. Not only can finance leaders identify and deploy a technically savvy workforce, but they can also build a foundation of advanced technologies that enable the entire finance team to leverage data-driven insights critical for actionable insights.
Finance transformation never begins in a siloed environment. True change must involve other areas of the organization, as those areas are influenced by finance or collaborate with finance to maximize their value and impact on the organization. Organizational stakeholders include IT, HR, operations, marketing, and sales. Finance transformation can affect these areas, and the resulting positive impact can enhance how organizations attract and retain staff, engage with customers, and go to market.
Where an organization is, where it desires to go, and the tools necessary to get there involve the development and execution of a strategy. A sound strategic approach to finance transformation considers resources, technology, talent, and how to properly deploy assets.
Executing a sound strategy must include the following:
- Department and organizational objectives
- Acknowledging the organization’s shortcomings
- Identifying tools and resources necessary to fill gaps
- The timeframe in which to execute a defined strategy
- Essential partnerships or collaborations to meet key objectives
- Executive and departmental buy-in and support
- Execution and measurement
- Course correction as needed
Every initiative must have a beginning, a middle, and an end. There must also be a consensus regarding the start and completion of an initiative around finance transformation. Every organization endeavoring to enhance and transform its finance operation must be honest regarding its current state and what is achievable. During this process, an external and trusted resource can prove invaluable, as this resource can provide an unbiased perspective regarding the organization’s current state and what is needed.
Various consultants can help organizations with a current- and future-state reality check, especially when benchmarking against others within the industry.
A clear and well-rounded road map can assist an organization during finance transformation. Such a map should help finance leaders understand the journey and the requirements necessary to deliver enhanced operations. There must also be a beginning, clear milestones, and an end.
Resource Identification and Allocation
Identifying and securing resources includes software selection and talent evaluation to help execute around key deliverables and specified milestones. Ensuring technology solutions like electronic or augmented invoicing, artificial intelligence, machine learning, robotic process automation, and predictive analytics are critical components of a robust finance transformation initiative.
In addition to technology, selecting the right personnel with the right skills to execute transformation utilizing selected tools is paramount. Doing so may require retraining existing staff, hiring new team members, or a combination of the two.
By developing and executing a plan, utilizing technology, and securing the right staff, finance leaders can truly position their departments and organizations as data-enabled decision-makers.
As a result, finance leaders can achieve the following:
- Streamlined order-to-cash processes, where exchanging business documents via paper is eliminated, and data is shared electronically.
- Improved supplier-customer relationships, helping suppliers become more reliable partners within their customers’ supply chains.
- Enhanced deployment of staff, where positioning teams with technology and resources can result in team members handling more strategically viable tasks.
- Improved organizational decision-making so finance and other executives can more easily leverage data and make critical decisions quickly around finance, marketing, sales, human resources, and customer engagement.
The global economy is amidst a robust transformation, utilizing automation and technology at an incredibly rapid clip. Finance leaders must embrace change and transformation to become more agile in this changing environment. If done correctly, they position themselves as savvy problem solvers and provide their organizations with an unmitigated competitive advantage.