Finance Transformation or Finance Automation?
A large number of organisations are currently going through one form of Finance Transformation or another, driven partly as a result of the need for the CFO to be more engaged with their organisation as a strategic change resource rather than a function which solely produces numbers.
A recent Deloitte survey found that, on average, CFOs aspire to spend about 60% of their time as a catalyst for change. But, while many CFOs seek to ensure their finance function delivers change, their function is often ill equipped to go beyond the numbers and often resist any change in the status quo.
A reason for this status quo is the CFO’s lack of confidence in what I call the “roots to the shoots” of finance’s operational processes and activities. Finance functions are so busy dealing with turning the handle in order to get the numbers out that the CFO and strategic finance leaders are not able to focus on actually driving and influencing change.
In order to lead effective change, finance has to ensure that they have a high level of confidence and control in the completeness and timeliness of those key finance activities that underpin their function. Activities such as the balance sheet reconciliations they undertake, the financial reporting and disclosure activities, consolidation tasks, management accounting and reporting of FP and A activities.
The challenge for a CFO is how to best achieve this degree of financial confidence and control? Organisations always talk about People, Process and Technology as the drivers or steps required for change, but rarely talk about how this is actually implemented. To achieve effective control and confidence in their operational finance activities, having the best people in the job is by far the most important factor to drive success.
The operating model and its design structure they should fall into are as equally important. What comes next is technology and this is where the value and benefits such as efficiency and effectiveness and a real return on value is realised. Putting in place solutions which enable automation of activities such as the matching and governance around balance sheet reconciliations lead to significant productivity and resource savings and lead to an increase in integrity of the organisations Balance Sheet.
Solutions that provide electronic workflow capabilities around the financial close as well as task management capabilities and open item management are emergent in the finance automation arena. Visualisation technologies are also making inroads enabling finance teams to automate the production of their monthly management accounts for instance and allowing senior finance managers to carry this data on mobile tablets.
The net effect of this automation is that the final step in the Finance transformation journey which is the “process” step and where the CFO wants to be, to implement change in the organisation becomes a feasible reality as well as an impactful driven experience. Finance automation can deliver true alignment with finance and the business providing a clear line of sight when the time comes to implement commercial change and “business transformation” which is the intended outcome of Finance Automation.
To find out more about Finance Transformation see our dedicated blog