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Finance Transformation – A Strategic Approach

Posted March 4, 2015 by Maureen O'Connell to Finance 0 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

While the macro economic conditions remain outside of our control it is important as leaders to continue to transform our businesses to strive for higher shareholder value that is sustainable. I thought it would be helpful to summarize some of the findings from a IBM whitepaper on Finance Transformation along with some of my thoughts that I felt may be helpful:

    Managing risk and opportunity throughout the enterprise

The CFO needs to have the capability of not only participating at strategic level but also delve deep into lowest level of detail across the organization. It is important for a CFO to know both the current and emerging risks. The job demands the ability to look backwards to report, be alert to what is happening now and see into the future to plan.

I have found that having a highly experienced Enterprise Risk team with tight linkages to the business units and staff functions is essential.  The ability of the ERM team to interlock the strategic and external risks into the operational controls will result in a comprehensive understanding of the risks and the associated mitigation programs.

    Improve productivity and collaboration

Finance’s effectiveness may have been undermined by single agenda emphasis on cost reduction – thus weakening the ability to contribute to future growth.

For finance to partner with the various business leaders it is no longer sufficient to provide accurate reporting and analysis – these today are a given.  It is incumbent on all finance staff to bring a level of unique insight to any business problem as seen through the financial lens.  In order to do this the skills of the finance team need to be enhanced.  Increasing the product or service knowledge of our finance teams enhances their credibility and fosters collaboration with the line teams that they support.

    Implement a governance framework around information integrity

A CFO should own the governance framework around data integrity. This does not necessarily mean that the CFO owns the data too.  Owning the framework gives the ability to plug weaknesses – as these would ultimately affect the finance data.

In my meetings with CFO’s today I no longer hear that they don’t have sufficient amounts of data.   The biggest comments are usually around  their inability to link all their data sources together to drive valuable insight or how to effectively store and dispose of data.

    Deliver right information to key decision makers, when and where they need it

Information is the most often quoted pain point – because of timeliness, lack of transparency, inconsistency, multiple versions and inaccessibility. The paradox is that there is too much data and insufficient information and insights. It is imperative to focus on systems that will be able to capture data from multiple sources and be able to generate insights as per company’s requirement.

    Develop sound business policies and management practices

The process of developing a plan for finance should adopt the same rigour as business users for the wider business plan. Hence, finance needs to have better clarity on including “internal” and “external” customers, alternative delivery models like outsourcing or offshoring services and clarity on investments and benefits, not just functional costs. Once this clarity is in place, it then becomes easier to implement people, process and technology strategies to support the transformation.

About Maureen O'Connell: An alumnus of New York University Stern School of Business, Maureen O’Connell has graduated with a Bachelors of Science in Accounting & Economics. Maureen O’Connell is the current Executive VP, CFO and CAO of Scholastic Corporation (NASDAQ: SCHL). She oversees all the administrative functions which include Strategic Planning & Business Development, Global Operations & IT, Finance and Human Resources. When she is not working, Maureen is Running, Skiing, Scuba Diving or Traveling.  

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