As digital systems evolve, and technology develops new capacities to analyse financial data, ways of working that once formed the bedrock of finance functions are becoming obsolete. Operational and strategic, CFOs and their teams can now sit at the heart of the business, providing in-depth insights and actionable predictions.
Preparing a finance department for the future is no simple task. The adoption of cloud-based accounting software, financial dashboards, and automated invoice processing has the potential to make the finance function more valuable than ever before, but it will upend long-standing internal processes and workflows that depend on existing, legacy architecture.
Beyond finance, other parts of the organisation which rely on the smooth running of the function will also be impacted. Today’s CFOs must lead and manage a complex network of relationships to deliver meaningful change, while ensuring day-to-day operations continue to a high standard.
“People have been talking about making organisations data-driven for some time,” says Piers Reid, SystemsAccountants Group CEO, “But now we’re beginning to see what that means for the CFO in practice. It means making data-based decisions, not educated guesses. It means embracing a hybrid, operational role beyond accounting alone, and being relied upon to provide insights and forecasts to the whole organisation, at speed.”
A successful digital transformation of the finance office requires careful planning, strong collaboration with stakeholders, and ongoing monitoring and evaluation.
“These new abilities mean new expectations, and will completely change the role of the finance function, let alone the CFO.”
The CFO is the ideal person to lead this change. Their forensic understanding of the company’s financial processes, deep knowledge of the business’s goals and objectives, and drive to instil a culture of continuous improvement through technology and people will be vital for the journey ahead.
Successful digital transformation starts at the top. Selling the vision to multiple stakeholders throughout the business means dealing with a wide range of priorities, from board members pushing to lower costs and meet deadlines, to the finance team tasked with delivering the implementation, to employees whose positions may be threatened by the transformation itself.
Keeping everyone engaged and on the same page helps minimise resistance to building a stronger, more efficient and agile finance function. “From a leadership perspective, what’s most important is to align yourself with your people first, so everyone - from the C-Suite to the end users - appreciates the business case for the transformation and how it will benefit them,” says David Hammel, SystemsAccountants Managing Director.
The CFO must be transparent about the changes that will happen and the impact they will have on the organisation. Involving the team in the process and encouraging feedback to ensure that everyone is on board is essential.
Communicating the vision effectively will help align external stakeholders and internal users to work towards a single purpose.
CFOs should align transformation with overall business goals, and identify key challenges to develop a project roadmap to overcome future obstacles.
The CFO should be willing to collaborate with other senior managers. Involving other departments in planning and implementation is crucial.
The CFO should be flexible and able to adapt to changes. Digital transformation is a dynamic process, and will require adjustment to new circumstances as they arise.
The commitment to a digital transformation requires strong leadership, the help of a few champions, and the wider acceptance of a critical mass within the organisation.
The CFO will need to meet with managers within the function, tap their knowledge and gain valuable feedback on how the transformation will impact their operations and their staff. And when it comes to delivery, the CFO will need to ensure the core team executing the project has the necessary technical skills and analytical expertise to deliver.
While managing the team that will use the system, the CFO should consider the following:
“Transformation doesn’t need to be everything all at once,” says Hammel. “It can be incremental and affordable, particularly in the current economic environment. By targeting small-scale improvements first, CFOs can demonstrate success and generate momentum for more substantial change.”
Not everyone will be pleased with what lies ahead, but by being transparent and positive, the CFO can win over hearts and minds. They should be clear about the purpose of the change, listen to feedback and, where necessary, be willing to adapt the strategy to address concerns. CFOs should consider organising workshops or town hall meetings for employees’ input.
Collaborating with other departments helps to involve them in the process of developing the digital transformation strategy. Organising cross- functional teams is a way to connect stakeholders from across the business and ensure they are aligned around the vision for change.
Boards want to know which key challenges face the organisation and how digital transformation can help address them. Providing examples of how the new digital tools will provide efficiencies, insights and foresight that will in turn boost the business’s bottom line is a powerful way to get the message across.
CFOs could consider a more tactical approach to kicking off a transformation by implementing a given digital tool within one subsidiary. This will not only require less investment of budget and work hours, but will allow the function to focus on its day-to-day operations, while learning from its experience with the pilot.
Transformation doesn’t need to be everything all at once. By targeting small-scale improvements first, CFOs can demonstrate success and generate momentum for more substantial change.”
DAVID HAMMEL, SYSTEMSACCOUNTANTS MANAGING DIRECTOR
Engaging the organisation is not optional if the CFO wants a digital transformation to succeed; it is necessary. Transparency and openness regarding the goals are key to bringing the team with you.
Successful digital transformations are heavily dependent on the competencies of the team. Having the right personnel in place means having people who are open to change, willing to learn, and capable of using the new technology effectively.
“The changes involved with implementing a new system can be difficult while you maintain your day-to-day responsibilities,” says Nicola Sutcliffe, SystemsAccountants CFO. “So, you have to have confidence that there’s enough capacity and capability within your existing team to manage that and keep the project on track.”
Significant modifications to processes and workflows are about to occur, which can be a challenging experience for existing staff.
“If the expertise isn’t already in place,” continues Sutcliffe, “whether in the new system or in project management, or both, reach out and hire that expertise, even in the form of contractors. Don’t think you have to do it all on your own – the last thing you want to be is the bottleneck in the project.”
Talent with both accounting credentials and technological expertise can be hard to find, particularly around data handling, according to recent research, but CFOs must strive to place those skillsets at the heart of transformation efforts.
People will remain the users of the system, and integral to its functioning. “The team has to be fully trained and comfortable with the system,” says Nicola Sutcliffe. “You are only going to get the full value out of it if the team knows how to get the most out of it.”
The CFO needs a team with diverse skills to help their vision become a reality. These skills may include:
To help keep the project on track, set timelines and deadlines, and ensure that everyone is moving in the same direction.
Analytics experts can interpret data to inform decision-making, identify trends, and track progress towards goals.
IT expertise on the team is critical to ensure that the technology solutions being implemented are scalable, secure, and effective.
The human element of digital transformation requires careful handling from experts capable of effective communication, training capabilities, and stakeholder engagement.
By focusing on people as well as technology, the CFO can ensure that digital transformation efforts deliver the desired outcomes.
Digital transformation of the finance office is not a one-time event. Along with new systems, processes and controls, the CFO is germinating a culture of ongoing evaluation and improvement.
New behaviours must be set to ensure the company’s mindset continually develops, as data-driven metrics measure performance and identify areas of improvement to augment the traditional methods of assessing company health via financial statements.
To ensure the transformation doesn’t stop short once the system goes live, CFOs must:
Success must be measured with accurate, quality data that is accessible and usable across every department. Investing in data analytics tools and building a data-driven culture can help CFOs inform decision-making, drive innovation and improve business performance.
What will stay and what will go in the post-implementation phase is an important call for CFOs to make. This may include identifying which processes can be automated, which roles are no longer needed, or which technologies are critical to the company’s future.
External contractors bring transferable skills and specific capabilities, while internal employees can be upskilled through training and development programs to grow competencies from within. By combining these two approaches, the CFO can build a diverse and skilled team.
“It’s important to recognise that training is an ongoing process,” says Nicola Sutcliffe. This can range from specific digital skills training to awareness programs or mentoring programmes. “As the business grows it will place different demands on the system as well, which should have been built in at the planning stage. You’re not just putting in a system for where you are now, you’re putting in a system for where you want to be.”
Rapid advances in technology and the new capabilities created by AI, APIs, machine learning tools and automation will bring new opportunities. “Now that platforms are updated regularly through the cloud,” says Piers Reid, “we’ve seen businesses who haven’t stayed on top of the change having to invest in another transformation. We’d advise scheduling regular health checks to make sure new tech features are being embraced.”
A culture of innovation, experimentation and constant development is a powerful recruitment tool for CFOs looking to attract and retain the best talent. Recruitment strategies may involve partnering with outside organisations to identify new talent, create opportunities for employees to work on breakthrough projects, or offer flexible work arrangements.
Key Performance Indicators (KPIs) are crucial to ensuring transformational momentum. By tracking the right KPIs, the CFO can gauge the impact of the transformation and identify areas for improvement. The following can be monitored over time to assess progress:
Transformation is an ongoing process, which doesn’t end when the new system goes live. Sustaining transformational momentum through vision and measurement is essential for the company to hit the goals set at the start of the project.
Finance transformation director Christina White was hired by a global professional services firm to remodel its finance office. The business wanted to address challenges within the finance department, replace legacy systems and improve process efficiencies through automation and other advanced technologies.
At the outset, Christina explored exactly what the company wanted to achieve and what advantages it hoped to gain by moving to an ERP system. “I first want to know what the problem statement is,” says Christina. This involved speaking to key stakeholders, including the CFO, to gain insights into the current roadblocks and what automation and other advances could deliver.
“Legacy systems can often be like Spaghetti Junction,” she says. “The systems weren’t talking to each other, so there was an immediate obvious loss of effective professing.”
With an idea of the scope, she could propose solutions and provide a rough cost estimate. The organisation’s willingness to invest in the transformation project was an indicator of how serious it was about the undertaking.
“Team building is hugely important to any transformation project, and has become more essential when working hybrid” Christina says. “It goes beyond wanting to drive the work through; you need to be somebody that cares. I often have to be 50% program director, 50% social worker.”
One of the most important parts of the transformation was bridging the old finance system with the new one, and cultivating a culture of change within the business. To do this, support was needed from the leadership to end users.
“Having a trusted sponsor on the executive team is incredibly important, as they can help drive change when challenges arise,” Christina says. “Typically, finance systems team leads are the biggest obstruction at the start of a project. They are the gatekeepers to the legacy system and stand to lose the most under the change, although I often advise that when the new system is in place, the skills they learn will be highly valued in the long term, internally and on the jobs market.”
When the business considered repurposing members of the old system’s support team, Christina impressed the need for new skills. Transitioning from a legacy, on-prem system to a cloud-based model requires a different way of thinking. “The old mentality needed to change,” she says. “Cloud systems are more about configuring than building and delivering.”
She added a data migration expert, change communication specialists, a global P2P workstream lead, and both O2C and R2R process leads to help facilitate the transformation. If these skills are brought on with contractors, it’s still important to ensure knowledge transfer to permanent members of the team.
By prioritising team building, engaging stakeholders, building strong relationships, and addressing potential obstacles, Christina helped the professional services firm implement an advanced ERP system that improved efficiency, streamlined processes, and accurate financial reporting across more than 30 countries.
“You must give the business you are working for ownership of those skills, which a lot of firms don’t recognise,” she said. “It helps with the change, they become your change champions, and it makes the go-live drop more successful.”
The key to success is focusing on the needs of the business and the end-users, and implementing solutions that are flexible, scalable, and adaptable to future changes.
Digital transformation is an ongoing process, not a one-time project. Having the right people with the right skills is critical, as without a team that can adapt to inevitable technological changes, it will be difficult to effectively leverage digital tools and technologies as they evolve.
“Don’t sit back on your laurels,” urges Piers Reid. “Transformation presents an opportunity for the whole business. CFOs are now getting suggestions from all data, so while in the past they presented a budget, now they provide much, much more than that, and are a key player in decision-making on everything from M&A to investment to cash flow. If you want to judge what a future-fit finance looks like, it’s when CFOs feel they have access to that.”
Transformation presents an opportunity for the whole business. CFOs are now getting suggestions from all data… and are a key player in decision-making on everything from M&A to investment to cash flow. If you want to judge what a future-fit finance looks like, it’s when CFOs feel they have access to that.”
PIERS REID, SYSTEMSACCOUNTANTS GROUP CEO
As a highly specialised recruiting & staffing consultancy, SystemsAccountants has been providing Financial Systems experts to organisations across the UK, USA and Europe for over 25 years. We’re a global leader, bridging the gap between Finance & IT to help companies run, scale, and grow through back-office operations and maximise their investments for Financial Systems, ERP, EPM, Analytics, Process Automation and Finance Transformation projects.