The role of a chief financial officer today is broader and more complex than ever before. The scope of responsibilities has expanded beyond the traditional role and can include anything from finance function effectiveness, corporate strategy, finance talent management, business performance and development, to human resources, and more. And as your business changes, you financial department has to change along with it.
In comes financial transformation. Financial transformations explore the wider issues affecting a company’s finance function. While there are plenty of skeptics, financial transformation can help CFOs improve business performance, operational effectiveness, and efficiency.
Frank Friedman, U.S. CFO and managing partner of finance and administration for Deloitte LLP, says, “With CFOs becoming more engaged in corporate strategy, finance transformations are a critical path for them to prepare their organizations for the changes that strategy execution requires.”
Friedman shared some tips in a recent article in CFO on how to transform the finance function at your company.
Win Over Skeptics
As we said earlier, there are skeptics who don’t believe a finance transformation is right for them. It could be because things are working well and they don’t want to rock the boat, the company is going though a lot of change and it isn’t the right time, or they just don’t think it’s needed. To win over skeptics, Friedman suggests laying out the business case for a finance transformation. “Be prepared to answer the question, ‘What’s in it for me?’ and do the homework to make a compelling case,” he says.
Answer these questions: Why is it essential? What value will it deliver? How does it support the corporate strategy? How will it advance the company’s business plans and goals? “Demonstrate how anything short of a finance transformation would put the corporate strategy at risk, as well as other potential lost opportunities,” he adds.
Build the Team
Finance transformations can take a few months or a couple of years. It’s dependent on the organization, their goals, and objectives. You’ll need to involve people throughout your company, including: Business leaders who aren’t afraid to make tough decisions, human resources to identify and recruit needed talent, IT to consider changing technology needs, members from corporate development and treasury, those who work with regulatory changes and compliance, and team members who can provide data analysis and modeling.
Stay Focused on the End Goal
“Making finance transformation happen in mature organizations, with their labyrinth of legacy systems, long-established processes and built-in biases, can be as arduous as starting from your own team’s end zone; the goal line can seem unreachable,” says Friedman.
Of course there will be challenges, but throughout the process, “keep your eyes on the end goal,” he adds.
Finance transformation can be hard, time-consuming, and costly. However, it may be necessary to keep up with the changing needs of your business.