Tip Doctor, Insider Learning Network.
This tip has been taken from John Steele’s presentation “How world-class organizations transform their finance function into a strategic enterprise performance driver” at the Financials 2011 conference in Las Vegas, March 8-11.
Finance organizations and the CFO face pressure from all directions including regulatory scrutiny, continued globalization, business complexity, and the expanding scope of the CFO role itself, and the Finance organizations are being challenged to respond and strategically transform their finance functions. How do you determine what changes need to be made and where to start? What are factors do you need to consider when rolling out a finance transformation project?
Prioritize Your Issues: Factors to consider when rolling out a finance transformation project
- Critical pain points and immediate needs
- Critical pain points may be characterized as an issue that seriously affects the ability of the business to operate and/or is causing losses to the business
- Immediate needs may also constitute external requirem
ents with a hard deadline, such as the implementation of SOX regulations
- Regardless of other factors, critical pain points and immediate needs are often the highest priority for a company looking to improve its finance function
- Foundational capabilities and order of improvements
- Within finance, certain capabilities or functional areas serve as the foundation for others
- These foundational capabilities should be improved before others to avoid rework later if possible
- When assessing potential areas for improvement, CFOs should consider the natural order for reconstructing the finance function to make the project as efficient as possible
- Cost and complexity of solutions
- Each solution has a cost associated with implementation, including time and resources spent in addition to more obvious costs like new technology
- CFOs should conduct a cost/benefit analysis whenever deciding to implement a major initiative
- CFOs should also look for “quick hits” – solutions that can be implemented quickly with less cost to the company
- Creation of world-class capabilities
- Each finance function has certain capabilities that are critical to the success of the business (Foreign Exchange for Coca-Cola, Risk Management for Goldman Sachs, etc.)
- Each CFO s
hould select his ideal “sweet spots” – areas of finance that would represent world-class capabilities and thus optimally drive business performance
- In addition to attacking pain points, CFOs may want to consider further improving an already strong capability to achieve a higher level of excellence
More Financials information, tips and advice are available on Insider Learning Network's Financials Group.