High-growth companies are built around modern finance departments with advanced technology, where teams use strategic analysis to power decision-making. Traditional responsibilities like accounting, compliance, payroll, and balance sheets are still central, but more is required.
As the insights in How to win backing for your finance transformation make clear, the gold standard of CFO today is a true business partner. They should deliver smart management intelligence, shape board thinking, allocate dynamic resources, and most crucially, drive real growth.
Reshaping a finance office to deliver these needs has consequences for an organisation’s strategy, structure, processes and workforce, and understanding what is at stake and the risks of failure are vital. A successful transformation will not only equip the business with the tools it needs to achieve success, it will also establish the CFO as an indispensable decision-maker and leader.
Selling the transformation as a driver of growth is a challenging but powerful way to win the backing of key stakeholders. Keep reading to learn about three essential steps needed to win the support for finance transformation, drawn from the experiences of accounting’s most influential change managers and shared with SystemsAccountants.
1. Take the board on a journey
Finance office transformations touch every aspect of a business, and such a fundamental change has a major impact on the culture of the organisation. Everyone has to be along for the ride, and the journey begins at board level.
Few board directors would argue against the importance of digitisation and how it is fundamentally reshaping business. But the speed and complexity of technological advances can make it difficult for them to focus on what to prioritise to unlock new revenue.
“Many of those board members we speak to are uncertain about what their role should be in helping senior management drive the digital transformations that businesses need to execute in order to survive,” says Celia Huber, senior partner at McKinsey.
The key to getting these stakeholders onside is to speak in their language, present a clear vision, and guide them through every step to show how the project aligns with strategic business objectives.
When fleshing out the specific ways your existing finance system must evolve to support that mission, experts express the importance of presenting the story in terms the board can understand. That should include ROI analysis based on the most up-to-date information you can find about the technology underpinning new accounting systems.
It is important not to get bogged down in detail, either technological or numerical, however, as your chances of winning support for such a significant project hinge on capturing and holding the attention of senior managers.
“You must engage the board and ensure you are answering the same question of every stakeholder; ‘What’s in it for me?’,” says Julie Downs, a Finance Transformation Consultant. “A deep understanding of the problems, the overarching matters, is what counts when you are presenting the vision, rather than getting bogged down in the minutia of what the technology can and can’t do.”
A compelling story of ROI opportunities can help deliver what you need for the transformation and serve as a foundation for future objectives. How you impart this information is just as important too. Consider presenting the board of directors with charts, graphs, illustrations and other visuals that reveal how your proposals correlate with specific aspects of the organisation’s business development objectives.
2. Communicate the cost of standing still
The lessons Charles Darwin taught about nature also apply to business. Growth, even survival, requires adapting to a changing environment.
Internal business culture can present roadblocks irrespective of how necessary digital evolution is, but forward-thinking executives recognise when doing nothing is not an option and how to effectively convey the consequences of inaction.
The costs of corporate inertia could well be higher should the company stagnate, and taken to the extreme could mean the business pays the ultimate price of extinction. Various obstacles can hinder a finance office transformation, most of which stem from a misunderstanding of the costs and benefits, change managers say. When putting together their roadmap, CFOs must ensure they clearly lay out the consequences of standing still.
If the vision for the strategic finance office of the future involves greater levels of automation, for example, CFOS must communicate to key stakeholders the limitations of the existing system and the dangers of continued reliance on manual personnel.
Finance teams cannot rely on hiring more staff, particularly during periods of economic uncertainty. As a result, they need to look for other means to become more productive. In an increasingly online world, to stand still while competitors automate and customers demand more digital services means businesses that do not evolve risk:
- Higher costs of processing
- More mistakes and lower invoice accuracy
- Slower processing times
- Reduced departmental visibility.
3. Be clear about the risks and how to face them with resilience
Meaningful change requires time, investment, and senior-level commitment. To that end, the CFO must not try to hide or spin the potential for negative consequences should the project lose direction. Finance office transformations carry high levels of risk, and the potential fallout must also be mapped for the CFO to build confidence that the business has the resilience to navigate through struggles.
Securing senior executive buy-in and accountability will also provide the guardrails to the implementation, ensuring any diversion away from the roadmap can be quickly righted.
Major risk factors to be considered include concerns over wasted investments; flawed organisational practices; choosing the right tools and disruption to workplace harmony. Clarity and transparency about potential challenges and the measures in place to counter them will only reassure key stakeholders.
Without experience, pragmatism, and openness up front, any transformation initiative is likely to get off on the wrong foot.
“Inaccurate assumptions can lead to misunderstandings and naive discussions,” says Bob Moore, PwC practice leader. “Your best defence is to get out in front of the issue by articulating what the technology can and cannot do. A good way to approach this is to offer to upskill the board and C-suite by hosting sessions on cloud concepts and terminology, or whatever they want to know more about.”
Becoming a good storyteller will also help the CFO get their ideas across to those not directly involved in the transformation, but who will be impacted by its execution and the future impact. Providing a clear narrative will help team members understand the issues and visualise the opportunities and risks, empowering them to have a greater impact.
Willingness to learn new technology can be instilled in colleagues who understand how it can benefit them and the company, while managers need to recognise the amount of time needed to bring colleagues up to speed.
For more insights into how finance transformations can trigger rapid growth, click the button below to read our playbook on “How to win backing for your finance transformation”.