Becoming customer-centric is key to staying competitive in today’s world of Industry 4.0. Naturally, enterprises try to offer differentiators, strong customer relationships, and reliable service. As part of the new trend, F&A teams also provide more than core finance functions by being a part of the business growth with solid business partnering capabilities.

An enterprise’s finance and accounting unit’s value-add must include business solutions over and above the products and services. The role of F&A teams has expanded to include:

  • Identifying value-creation activities to grow the business
  • Developing strategies as to the future of the enterprise and where it is headed
  • Recommending solutions to drive those goals – the how of achieving set goals.

However, most F&A teams tend to look backward and rely on older methods of spreadsheets that show historical data. They have been used to work with spreadsheets to compare the previous year’s business versus their budget, the financial ratio, etc. The variance analysis is based on past revenue. Moreover, spreadsheets are user-friendly, and F&A uses them to consolidate business results. The downside is that employees spend their time checking the data and performing manual reconciliation for human errors: the bigger the enterprise, the more complex the spreadsheets.

Clearly, transforming traditional F&A into a more comprehensive function with business partnering capabilities is imperative. How it can be transformed involves at least three definitive strategies.

1. Understand the value-creation process

Start with deep-diving into the internal value creation process of the enterprise – the customers, activities to generate customer value, and how the business delivery along the entire supply chain brought value to the customer, from the source of the product to the distributors and end-user.

2. Gather information and build trust

The decision to make a finance transformation involves all the stakeholders. It is a step that can’t be made in isolation. It also means a transition from traditional F&A activities and the resistance to the change. Therefore, building trust and empathy among the stakeholders has to be undertaken with demonstrated reliability and understanding of the challenges they face.

3. Look beyond the internal business model

After understanding the internal value creation process, it is necessary to expand the scope by looking at business models of competitors, global enterprises, and insight into emerging trends.

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Practical applications of finance transformation

Strategies are great to start with. But, how to implement them practically to achieve financial transformation? F&A teams would be best prepared for the below changes that accompany such transformation.

  • Standardized processes and systems to increase efficiency and avoid errors.
  • Automated month-end reporting.
  • Automation across all business functions and saving costs
  • Centralized data hub for all financial data and access to the team to enable collaboration.
  • A possibility to work with remote teams, cutting down overhead costs.

While technology plays a part in the automation processes, finance transformation goes beyond. Technology brings with it the need for operations training, as, without it, the investment into advanced technology will come to naught. In essence, new technology is preceded by enabling strategic change, with a clear roadmap to transform systems and processes. Resorting to quick-fix solutions with interim technology is not the answer, as a mere overhaul of systems may not suffice for a holistic finance transformation. Short-term planning with such quick fixes does not allow future planning or future outcomes. Invariably, the need to predict the outcomes and planning fall by the wayside.

What do CFOs need for finance transformation

CFOs may be looking for a solution that is quick and reliable. But they know that their teams need to be onboarded and trained to be ready for a new approach to finance and accounting. The people factor cannot be overlooked on the path to transformation. F&A teams must be involved from the get-go, so they see the possibilities for greater efficiency. They must recognize that there would be reduced workload in routine and ad hoc reporting, reduced errors through automation, and opportunities to embrace a larger role free from manual and repetitive tasks to add value to their function in the enterprise.

Manual data input, multiple spreadsheets, time-consuming checking for error, and other such repetitive tasks will simply not do when the enterprise is embracing finance transformation. CFOs recognize this and also that remote working may be a thing of the future and not just during the pandemic. Therefore, CFOs are onboard with bringing in vital tools and technology, empowering the F&A teams, and moving to the cloud.

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