Nearly 75 percent of senior finance executives that responded to the survey say they face rising pressure to more tightly integrate BPF processes and to deliver financial data faster; while 79 percent say that the demands on them to improve collaboration among key decision makers are increasing. It’s clear from the survey that finance departments need to find ways to transform how they work in order to provide more accurate, timely and comprehensive data. But, what isn’t clear to most finance executives is how, exactly, to accomplish this feat. It’s one thing to recognize the need for better, faster data – it’s another to define how that can be done with existing or even fewer resources.
To help CFOs answer that question, Matthew Aldrich from Accenture, looked at how U.S. and international companies are restructuring their financial processes and practices in a new white paper, 5 Best Practices for Transforming Financial Planning and Analysis. Aldrich identified five best practices key to successful finance transformation.
1. Get the right people involved.
The cornerstone of any business transformation is the people leading and supporting it. So, understand why you’re transforming, who needs the data, who will benefit from the improved insight, and how should the changes be executed. Those answers will help you to identify the critical stakeholders and to sell the project to key executives needed to get it moving.
2. Identify the business drivers.
Act like the business partner you aim to be and dig deep on the real drivers behind revenue and profit. Translate those drivers into metrics to develop a set of indicators for what matters the most to your executive team.
3. Define a performance management process.
There are obvious links between non-financial performance targets and a business’ ability to improve profits and revenue. For instance, a grocery store chain losing money to food disposal. With real-time information and analytics that track the chain’s processes related to food disposal, they can better manage the amount and timing of what they order. In the end, this will ensure the vast majority of products they are bringing into their store are going towards sales and not a landfill, and the products they are not able to sell are disposed of safely and kept to a minimum. “Finance teams can add value just the same by helping the business manage to targets,” noted Aldrich.
4. Choose flexible technology for performance management.
As noted earlier, the technology used plays a key role in a company’s ability to deliver the insight that decision makers need. Aldrich strongly recommends that finance departments stop relying on Excel spreadsheets and move to an EPM application that can provide the integration, analysis, governance and “single version of the truth” that businesses require.
5. Take a phased approach.
A transformation takes time and is best approached in stages. Start with those items that are most in need of improvement and which bring the most visible benefits. “Maybe start with planning this year to improve the company’s liquidity. Then move to improving the reporting process,” recommended Aldrich, describing it as a process of “quick wins while focusing on the biggest overall priorities for the business.”
Ultimately, the objective of a transformation is to raise the finance function from one of creating spreadsheets and reports, to a department that serves as a strategic partner to the CEO and other decision makers. As Aldrich explained, finance should be transformed into a “forward-looking business partner that captures and analyzes data to assess opportunities and drive new value.”
To read the full white paper from Matthew Aldrich from Accenture, click the link below.