November 3, 2022 By Naved Qureshi
Monica Proothi
3 min read

Successful finance transformation initiatives cannot be achieved in a vacuum. Beyond building solutions that could potentially deliver enterprise-wide value, chief financial officers (CFOs) must also engage other department heads, alliance partners and key stakeholders in scope planning to encourage alignment on a shared vision.

Finance departments traditionally used data that works within their own part of the business, but they are increasingly using non-finance data from within their companies and unstructured data from external sources. An example of a significant finance transformation initiative might be embedding artificial intelligence (AI) in forecasting revenue. Modern systems will be based on insights delivered by AI. While these reports may be accurate and delivered by a CFO with a high level of confidence, the CFO’s peers (who previously relied on other manual reports yielding higher payouts) may resist this change. In this finance transformation scenario, CFOs must consider the perspectives of colleagues in other departments to mitigate resistance.

Effective integration between finance and non-finance data is crucial to the ever-evolving technology landscape. Strategic CFOs are stewards of transformation whose change management styles enable operational excellence.

Risks of change management failure

Money is left on the table. Without understanding new ways of working through change management programs, businesses will not realize the full value of any finance transformation. It’s like buying a vehicle with 4-wheel drive, but never engaging the feature—you will continue to get stuck in the snow. In finance transformations, we have seen similar operational pitfalls. We’ve seen teams continue to custom-tailor reports in Excel after their enterprise implements a new ERP or other reporting system. We’ve seen staff double-check transactional work even after the company tasked a new shared services center to execute these transactions and manage quality.

Performance takes a nosedive. Unless a focus is put on business partnership, insight generation, continuous improvement and advisory activities, business units will not fully benefit from finance transformation efforts. There is always a learning curve during transformation, but if CFOs don’t employ the most effective change management to mitigate this curve, finance function performance such as operational process metrics or time spent on business partnering, will likely lead to an increase in total cost of implementation and system ownership, which could negatively impact the business.

The superstars leave. Top talent within an organization has many career options available to them. Those individuals expect to work on well-managed programs with clear expectations. Employees need to know how transformation will make their lives better and progress their careers. If they experience the extra effort involved in transformation without a clear view of the benefits, they are likely to look for other, more attractive opportunities. Robust change programs that highlight and champion individual benefits and enable participation and contribution from skilled employees help to lower top talent attrition and have broad business impact.

Succeed in collaborative finance transformation with strategic talent

The approach will vary depending on the enterprise, the maturity of the finance organization and how the plans on scaling your new system. There are different starting points and catalysts that drive the finance transformation agenda within finance organizations.

Transformation is constant and essential, but one of the biggest challenges to overcome is transforming talent. The focus of the CFO has shifted from transactional work to relational value that generates business partners.

Organizational constructs are evolving, especially after the pandemic. Now CFOs should be less focused on acquiring talent with traditional finance competencies and more focused on talent who can be strategic and mindful of behaviors and outcomes.

Winning strategies for managing change across finance and non-finance teams

When working to unite finance and non-finance teams, here are some key strategies:

Think big, start small, act fast. Finance transformation should feel empowering and realistic. A big-bang mindset is great, but the goal should be achievable. This is possible in small, fast-paced phases where value and benefits are generated quickly and reinvested. A CFO should feel like his or her team is finally enabled to reach operational efficiency that supports the business and makes life easier. Long gone are the days of feeling change fatigue amid a big-bang transformation that also requires heavy cost takeout.

Involve your whole workforce. Spending USD $100 million or more on an ERP solution will not drive benefits if the workforce does not know how to use it. CFOs need to enable the workforce to operate in their new environment and use the new tools and technologies to make their roles more efficient.

Don’t hunt for unicorns. It’s impossible to find a one person within a finance organization who has all the skills required for every role required in a modernization initiative. But by training and equipping people across the enterprise with diverse skills and by creating a culture that’s receptive to change, teams can operate holistically to create the unicorn effect they’re striving to achieve. When working with CFO and senior finance executive clients, IBM Consulting brings not only finance and accounting experts but also data scientists, industry and technology leaders.

To gain widescale adoption of transformation initiatives, CFOs must ensure that relevant stakeholders have a purpose and a place in the planning of efforts and design principles. Empower employees with new ways of working to fully realize initiative benefits that you, as CFO, are championing.

Read our new paper, The Strategic CFO: Why finance transformation propels business value

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