The key factors for a successful transformation of the Finance function – Part #2

#1 – ALIGN THE PROJECT WITH THE GLOBAL VISION

 

You have initiated a transformation project. Change is underway! But does it benefit the entire organization? Make sure this new project is not out of sync with the company’s global vision!

 

The strategy should be linked to the implementation

The risk with transformation solely addressing operational problems is that it only takes into account a limited number of stakeholders based on a small group within the organization. A company is a complex system where its constituent entities must interact, each with its own roles and expertise, while working towards a common outcome. Companies are all too often vertical organizations:  the strategy is developed and shared by the top of the pyramid, while the implementors “at the bottom” can only perceive intermediate targets or milestones that conceal the overall meaning of the strategy pursued.

This loss of meaning may give the implementation functions that gravitate around finance the impression that financial performance is the only goal pursued, which is a rarely engaging prospect in itself.

It is therefore essential to forge a link between the strategy, all the objectives pursued and the various levels of implementation to create team synergy focused on a single vision.

 

What are the reasons for this divide?

There may be many reasons:

– The employees don’t understand the strategy, because it hasn’t been communicated to them

– The managers struggle to motivate them and stimulate engagement based on blind execution

– Departmental objectives are not aligned with the company’s overall strategy because the departments work in silos and/or strata

 

However, this divide can be avoided !

Provided that:

– The employees have a good understanding of the organization’s strategy;

– The employees understand their contribution and the initiatives required for this strategy to succeed;

– Performance metrics clearly illustrate how the employees’ work directly contributes to the results.

– The employees understand the levers at their disposal to improve their contribution

 

And because great ideas do not solely emanate from the management, a truly balanced organization must include a feedback system so that advice can also emerge “from the bottom”.

A transformation solution must take into account this core strategic alignment requirement.

 

#2 – UNDERSTAND THE PRESENT TO BETTER PROJECT INTO THE FUTURE

 

3 key questions are raised at the commencement of a transformation project: “where am I?”, “where am I going?” and “how can I achieve this?” These three basic elements are: the Current State, the Target State and the Roadmap. By simultaneously building upon each of these pillars, the consultant can durably and successfully transform the company.

 

Du current state to the target state, via the roadmap

Sound understanding of the Current State is needed to identify recurring issues in the organization, independently of the objectives of the Target State. For example: highlighting the current inefficiencies of the Current State will undoubtedly help define a few key features of the future software package to be installed and/or of the organization to be altered. Transformation plans seldom factor in corrective measures which penalize current operations. Do not hesitate to explore the Current State in conjunction with operational staff.

The definition of the Target State is the second essential step. You have finalized the company’s assessment (Current State) and you know in detail how your organization works. What now? How to determine where you want your organization to go? What is essential or desirable? How to measure the success of this transformation?

The analysis of the gap between the Current and Target States helps put together action plans and assess their resources and potential lead times. It also responds to the following question: What is feasible and/or realistic? At this stage of the project, the consultant contributes to the definition of the “how”, which helps develop the Roadmap.

Only then can the organization’s ability to absorb and take ownership of the transformation be taken into account. Assuming that the only thing that matters is the implementation and deployment of a solution is a common mistake: process changes, the allocation of responsibilities and the commitment of stakeholders are equally as important.

 

In our next article, we will introduce two others key factors for a successful transformation of the Finance function.

You will learn how to choose the tool suited to your needs and challenges. We will also talk about the importance of understanding the present to better project into the future. But also how to involve the teams and arouse interest.

 

Convinced ?

See you on September, the 6th to discover 2 others key factors for a successful transformation of the Finance function.

 

 

Who are we?

At Solution BI, an international consulting and engineering firm, we have been assisting our clients with their finance function digitization projects for more than ten years.

Our expertise, recognized in the marketplace, and our consultants certified by vendors allow us to support all your transformation and performance management projects: EPM, CPM, Business Intelligence.