Why Finance Transformation ?
Gone are the days when Finance Leaders could just bank on cost management and operational efficiency to ensure survival of their organization. That, was a expertise much regarded yesterday. Today, Finance leaders must find new ways to sustain performance & grow the business. With empowered consumers & employees, rapid technological changes along with rise of emerging economies, traditional business models are being disrupted.
Did you know :
- Only 4 of the Top 10 Fortune 500 companies from the 2010 list were there in 2016
- 62% of SME’s have the potential to sustainable business models with the involvement of Finance Leaders
Finance Transformation is becoming a competitive imperative & is an integral part of Business Transformation. The Survival of Fittest.
What is Finance Transformation ?
As per Open View :
Loosely defined, the term “finance transformation” is used to describe strategic initiatives aimed at improving Finance within a company. It can involve a variety of tasks, from shortening a budget cycle to implementing new Accounting software to reducing overhead costs. I argue, however, that the general goal of any transformation is the same: to align Finance with the overall company strategy in order to become more efficient and provide better service to their internal customers.
Did you know : CFOs in all industries are under pressure to provide insights to help boards and leadership teams make better decisions.
How is Finance Transformation happening ?
As per PwC, in their publication on Redesigning Finance for the Digital Age, we can see where we currently are ( circle filled with orange ) vs where Finance transformation can take us (circles with orange outline )
In my opinion this can happen by a combination of (1) Environment (2) Technology (3) Skills & capabilities.
How can you or your organization adopt Finance Transformation in the new age ?
ITEM 1 : CREATE AN EFFECTIVE OPERATING ENVIRONMENT FOR TRANSFORMATION
“Transformation is a Journey, not a project”
- Explore integrated business services as the next evolution in the shared services agenda
- Apply emerging technologies to drive the next generation of efficiencies in the business
- Adopt a forward-looking approach to strategic insight and decision support, along with a strong grasp of information through more robust use of analytics, to stay one step ahead of business model innovation
ITEM 2 : LEVERAGE TECHNOLOGY AND TOOLS
“New Challenges require New Solutions”
- Shift the focus from maintenance of IT systems to technology innovation
- Develop a better understanding of how technology can support both the cost and growth agendas
- Collaborate with other functional areas, including marketing and HR, to ensure that technology investments enable the right business outcomes
ITEM 3 : ADVANCING SKILLS AND CAPABILITIES FOR TOMORROW
- Adapt training and recruitment to keep pace with the changing finance role
- Apply cloud-based talent systems to assess skills gaps and enhance workforce planning
While Finance transformation needs to be viewed holistically as business transformation journey, a significant impact and interest should come from finance leaders. While this is not as simple as it seems, it is vital to be the catalyst for change and be prepared for tomorrow.
References & Credits to the Original Content and Authors only.
About the Author: Akash Mahagaonkar is the Director & Head of Operations & Business Development with Relativity Management Solutions India Pvt Ltd, responsible for Relativity’s overall service delivery. He is also a mentor with various institutions such as NEN, TiE, etc and helps companies and entrepreneurs to build sustainable businesses. Akash is also a noted speaker in areas of Finance, Taxation, Small business compliance and the like. With over 12 years of experience, he still says he has to learn more. You can connect with Akash on LinkedIn here.