The finance function is evolving. Organizations that embrace that evolution now look toward their CFO and finance team for critical strategic input that guides the entire enterprise. However, as I've experienced in countless engagements over the years, three common challenges can prevent finance from transforming into the agile, efficient and forward-looking strategic hub it was always meant to be: defining change for the function, leadership buy-in and identifying pain points.
Defining finance transformation
The term "finance transformation" can seem a bit ambiguous without properly defining it relative to a company’s needs and goals. Simply put, the term represents the change occurring within the finance function as part of an enterprise-wide initiative already taking place. However, just defining what that change means for finance and its goals can be a significant challenge. To accomplish this objective, it's essential to define its parameters and goals. Level-setting amongst the C-suite and stakeholders is a critical initial step to ensure that everyone understands exactly what they are aiming for.
To overcome this challenge, a CFO essentially works as the central figure, defining what a finance transformation means for an organization, then communicating that definition with other executives and making it a part of the steering committee (more on those in a bit). Ultimately, the goal is to determine what parts of the overall change initiative within the organization are specific to finance. Naturally, this requires a CFO to understand the concepts behind a finance transformation.
Getting leadership to buy-in
Effectively managing change depends on sufficient support, communication across leadership and buy-in from other executives. If everyone isn’t on the same page, it makes it very difficult for any significant change to take root. Leadership needs to know how you’ll reach your objective, and how that change will occur. And that’s exactly where buy-in plays such a critical role. Therefore, the challenge around buy-in stems from my previous talking point. If leadership doesn't have a thorough definition of what a finance transformation means for the enterprise, they’re far less likely to provide the process with much support, if any at all.
To overcome this obstacle, a CFO can develop an oversight/steering committee composed of different department heads and key leaders. This group functions under the umbrella of the governance board, which is steering the broader organizational change across the enterprise. The steering committee manages the process and progress of change specifically within the finance function, defining the particular roles that people, processes, and technology play throughout. When establishing such a committee, it's important to emphasize that a transformed finance function doesn't mean a complete overhaul of its workforce. Although roles might change, a transformation doesn't equate to massive rounds of layoffs, as many often believe.
Identifying pain points
Without clear objectives, it's difficult to assemble a transformational strategy that drives greater efficiency, value, profitability, or whatever goals you want to accomplish in finance. Identifying and documenting your pain points and business requirements helps establish those objectives, giving your efforts a sense of direction and purpose....
To view the video on Yahoo Finance, click here.