Financial transformation: where to start?

Are you opting for an upgrade or new system? Then realize that it is important to first think carefully about the alignment and order of the factors listed below so that they fit together properly.

First, make sure you have the strategy and processes well aligned. Only then is it important to plan and drive the processes so that the strategy is realized.

The organization and information provision only follow when you know how you want to govern. Based on the strategy, processes and controls, (adapted) functions and ways of working can then be defined. Also, after determining the steering process, it is possible to see what information is needed in what place and what systems and technologies can be used for that purpose.

Often organizations think that a new information system is the key to a successful financial transformation, but they give little or no thought to the impact of the key factors on the new or modified information system.

The 5 key factors

Don't want your financial transformation project to end in a headache? Then make sure you have the key factors listed below well thought out and worked out, taking into account interdependencies and sequencing.

1. Strategy

Strategy is fundamental in a financial transformation project. The organization must have a clear vision of its financial goals and a plan to achieve them through the transformation. This includes defining the project's scope, objectives and desired outcomes.

2. Processes

Financial transformation often involves redesigning financial processes, such as budgeting, forecasting, financial reporting and internal control. It is critical that these processes align with the goals and objectives of the project (and the organization!). Streamlining and improving financial processes is a core component of many financial transformation initiatives.

3. Controls

Effective financial control is essential in financial transformation projects. Organizations must establish governance structures, define roles and responsibilities, and implement mechanisms for monitoring and managing the transformation process. Alignment between control mechanisms and project objectives is vital.

4. Organization

Financial transformation often requires changes in organizational structure, including the finance department. Decisions about how finance functions are organized, what roles are needed, and how teams work together must align with the goals of the project. Organizational alignment ensures that the transformed finance function can effectively support the (new) strategy.

5. Information

Data and information are at the heart of financial transformations. Implementing new financial systems and technologies is common in such projects. It is essential to align information systems with the objectives of the project so that they capture and provide the necessary data for decision-making and reporting.

Consequences of lack of alignment

If there is no proper alignment between the factors, you often see that it comes at the expense of effectiveness, efficiency or motivation. If there is no consensus on a common goal, it can easily lead to conflicting interests and lack of trust among employees.

In addition, work becomes less efficient, which can lead to changes and rework, for example. But loss of motivation and job satisfaction also lurks.

How frustrating is it when you've worked hard on a project, but halfway through it gets killed because someone in management decided it was against their interests?

As Bart & Partners, we help many clients upgrade and implement systems for the finance function, in the area of Enterprise Performance Management. We are happy to support you with this.

Do you have questions or comments in response to this article? If so, please email gerrit.haan@bart-partners.com or info@bart-partners.com

About the author

Gerrit Haan is a passionate Oracle EPM specialist. He has in-depth knowledge and experience in automation of EPM Cloud solutions and also has extensive experience in implementation, integration and management of Oracle ERP and EPM solutions.