Dealing with transformation is a fact of life for all organisations in an age of disruption. While periods of rapid change are challenging for many, transformations can be particularly painful for finance and accounting departments, whose processes and information flows are intertwined with every aspect of the organisation.
Mergers and acquisitions tend to grab the most headlines, but the types of transformations that impact finance and accounting departments can take many newsworthy forms. Some transformations are caused by external forces, such as regulations resulting in new statutory reporting requirements, or an economic downturn leading to a restructure. Other times, internal changes such as the finance team’s turnover or a company’s decision to expand into a new business line or geographic region can stimulate a need to update or streamline systems and technology.
Finance transformations don’t have to be a source of pain. Transformations create opportunities for an organisation’s finance and accounting departments to run and progress efficiently by knowing the right questions to ask.
BDO’s Financial Management Consulting team has compiled five considerations for your organisation’s finance and accounting function, helping you lead productively through periods of change.
1. Strategically, now is the best time to lead a finance and accounting transformation
Too often the finance team’s contributions are viewed as being historic, with senior management using its reports as a way to track recent activity. As a result, the finance department can often remain on the back foot when it comes to strategic discussions about the organisation’s future.
Transforming finance and accounting presents an opportunity for your organisation to elevate its strategic profile. The finance department can play a leading role in the decision-making process by using data analytics to interpret the story of where the organisation should be headed and how various strategic options will affect its financial performance. By providing insight alongside analytics, finance leaders can showcase the function’s true value as an essential part of any strategic discussion.
2. As a finance leader you have the responsibility to reimagine the finance function’s role
In times of stability, it’s easy to think that optimising your finance function’s technology and processes means making minor, incremental changes to the status quo every year. But when your organisation is going, or has gone, through significant change, it can’t be assumed that incremental changes will be sufficient to ensure your function is serving the organisation’s current or future needs.
A transformation is an opportunity to reimagine the team’s role, becoming both data analysts and strategic partners to the remainder of the organisation. As a leader, you need to think critically about the size of your team, what types of reporting capabilities will be required, and the processes and technology tools you need once the transformation is complete.
As you think about modernising, remember that not all of the future functions need to be performed by your existing team. Use this time to identify tasks that can be automated, outsourced or even created anew.
3. The finance function is perfectly placed to be a catalyst for change
Finance touches every part of an organisation. It is vital, as a leader, that the changes you make are not considered in silo. Whether or not you view yourself as the driver of change, the change made to the finance team will influence the remainder of the organisation.
As an example, if your back-office adopts technology to automate invoice collection from suppliers, the business units that work with these suppliers on a daily basis need to be considered so they can make sure the new system positively impacts the delivery of services. This dynamic applies both sides of the fence. If a business unit decides to switch from a variable pricing model to a fixed-fee model with its suppliers, the finance department needs to be involved so the invoicing system can be adapted to reflect this change.
4. Delivering the transformation
Successful finance transformations don’t happen by chance, they require careful planning and communication. Like any complex project, they need to be managed proactively. This applies to all parts of the organisation, but especially the finance department, where mistakes can have a significant impact on the bottom line.
A change management plan should, at the very least, account for the following:
- Each stakeholder - Those impacted
- The key stakeholder, and their team - Those responsible for delivering the transformation
- The future state - A detailed understanding of what this will and should look like
- Business requirements - Clearly identified challenges the future state will meet and resolve
- An action plan - Detailed and time-bound
- The gateways and checkpoints to monitor progress - Continually assess alignment of outcomes and provide ability to adjust direction as required.
Having transformation experience in your team can provide significant value throughout the process. Quite often, the business as usual team may not have sufficient experience or capacity to manage the transformation in its own right. It is important to consider what capabilities may need to be resourced for both short and medium term strategies, to ensure successful transformation delivery.
5. Communicating the transformation plan to internal stakeholders
Your organisation not only requires a plan to manage the transition, leaders must also consider how to communicate the transitions to stakeholders.
A clear outline of a project’s business case is a critical element of the communication plan. Stakeholders may struggle to make a decision if they fail to see the rationale behind it. The communication plan should address the following questions:
- Who will be a stakeholder’s main point of contact during the transformation?
- When will various stages be completed?
- How will various groups across the business be affected by the change?
- How will the organisation track success and measure progress toward the end goal?
Importantly, your communication strategy should not be a one-way street. It makes seek out and incorporate feedback from the affected stakeholder groups.
Our Financial Management Consulting team supports finance functions in identifying improvements across people, processes and systems, delivering solutions appropriate to the size, scale and ambitions of your organisation.
If you want to confidently identify the right tools and processes to optimise your accounting and finance operations, or would like to learn more, contact a BDO financial management consultant today.