Does Your Company Need Finance Transformation?
Has your company’s growth has outpaced your current financial system? Perhaps you are without a full schedule with defined roles, or your chart of accounts is inefficient, or your data definitions are inconsistent. You need to stop the financial bleeding, but maybe you aren’t clear on where you need to cut costs. Moreover, how can you cut costs when you need all your staff to complete the task at hand? A finance transformation might just be the solution you need.
What is a finance transformation?
A finance transformation is a process of helping companies meet their needs, optimize their performance, and deliver comprehensive strategies, focusing on three main areas:
Operational efficiency and resource distribution.
You’ll likely want to examine whether things are set up as efficiently as possible. Common challenges to efficiency can include:
- Manual operations
- Outdated or overly complex systems
- A lack of resources
- Duplicate work or rework
- Data quality errors
- Faulty data validations
Of course, it’s essential to identify the underlying causes of any inefficiencies before you can understand how to improve upon them.
Strategic alignment and the use of emerging technologies.
Determine whether or not your financial strategy partners and aligns with the business. Some of the most common challenges companies face here are:
- Goals which are conflicting or poorly defined
- Gaps in accountability
- Outdated metrics
- Minimal planning
- A lack of cohesive partnerships
Your financials can help to ensure your company’s success by becoming better aligned with the business and employing the right technology.
Insight and quality decision making.
Assessments in this area may include:
- Budgeting, planning, and forecasting
- Performance management and reporting
- Cost management and analysis
- Business performance analysis
Understanding the needs of your business is vital to driving the company’s financial planning and analysis.
The four enablers of finance transformation
Changes in financial strategies are often driven by an urgency to stop the bleeding. Adapting processes to changing needs helps a business become more efficient and strategic. Many strategies fail because organizations don’t apply change management to ensure a transformation is appropriately planned and executed.
Enablers of finance transformation include:
All four enablers need to be implemented appropriately for the finance transformation to be successful and sustainable.
Frequently, companies don’t understand the full importance of all four enablers and may try to compensate for one that’s insufficient or failing. To implement a financial strategy, you may need to assess your requirements and consider the consequences both up and downstream, while factoring in the other three enablers. Doing this can help you achieve a comprehensive understanding of your needs so you can design the right solution.
It’s an Ongoing Process
Finance transformation isn’t something you can achieve immediately. Instead, it’s a process that requires ongoing business improvement to make it to the next stage. Without a doubt, finance transformation can result in a more strategic partnership between finance and the company, leading to increased efficiency and better decisions.
It’s often helpful to get an objective perspective from someone outside the company to assess where you are now, where you need to be, and how you are going to get there. A financial strategist can help you establish a regular, accurate finance reporting cycle, foster a culture of continuous improvement, and streamline processes. Contact a financial strategist for help today—it might just be the fix you need to not only stop the bleeding but to heal and grow the business as well.