Three steps for organisations on the finance transformation journey

Enabling the Finance function to become a strategic business partner within the organisation is an investment that delivers returns, driving business growth, cost reduction, and efficiency, with overall improvement in governance and compliance for financial control.

A well-functioning governance and compliance function for financial control results in proactive risk management and fraud prevention.

Therefore, getting it right when embarking on finance transformation is crucial to realise the return on investments made by organisations.

An essential first step on this journey is defining the target operating model for the finance function across the organisation.

This target operating model entails developing a clear ambition regarding the future state of finance, considering people, processes and performance.

Subsequently, organisations need to prepare a detailed transformation roadmap that outlines the workforce capabilities and requirements, technology-enabled process changes, optimisations, and service delivery, including critical business data, insights, and analytics for performance management.

The second step is for the organisation to define clearly the value creation metrics linked to the various aspects of the transformation journey.

Some of these metrics may be related to efficiencies gained from technology and automation, such as a reduction in effort required and increased speed in preparing reports, reconciling accounts, or gaining insights into the business.

It also includes eliminating unused reports and unnecessary layers of review.

The value created must be viewed through a customer lens, with finance serving as a factory that supports the broader organisation. One guiding principle for this step is shifting towards more value-adding activities and reducing the time spent on non-value-adding activities by finance.

The third step is to embed a continuous improvement process that aims to refine further and improve the finance factory. This step is a crucial component that needs to be incorporated from the very beginning of the finance transformation journey.

Organisations can sustain the gains made, promote collaboration, and drive a culture of continuous improvement where monitoring and challenging focus on value addition.

The writer is a partner at PricewaterhouseCoopers. He is an author who writes and speaks widely on corporate reporting topics.