Finance Transformation Roadmap: 6 Steps to Success

Matthew Dziak

Finance transformation roadmap

A finance transformation involves a revamped approach blending people, processes and technology to empower finance to facilitate strategic conversations and decisions that drive company growth. It might seem like a prolonged endeavor, but like any journey, it begins with taking the first step. 

Having the fortitude to examine internal workflows and recognize a need to improve processes and add technological capabilities to accelerate the maturity of your Finance Function is a massive step in the right direction. An effective transformation framework will set you up for success and increase the impact your Finance Function has on your Company.

If you think you are still wrapping your head around the scope of your transformation, you are not alone. According to EY’s Digital Disruption in Finance Survey, only 11% of finance leaders believe they are in the advanced stage of the digital transformation of their finance function. 

Although an overhaul might be necessary, your transformation doesn’t have to be a lengthy, multiyear process. In fact, we’ve found that dramatic process improvements can be realized in a matter of a couple of months, not quarters or years. 

It’s imperative that your Finance Function is operating as efficiently as possible. Remember, if Finance’s numbers don’t work, eventually nobody will. Without visibility into your finance and accounting operations, and optimizing workflows, you’re likely leaving opportunities on the table. Let’s take a closer look at what a successful finance transformation roadmap entails.

6 steps to a successful finance transformation

1. Define your targets and objectives

Before you begin any journey, you need a destination. Each Finance Function has a unique set of objectives it hopes to accomplish and the starting point of your Finance Transformation begins with setting your targets. For some it might be a need to develop more detailed financial and management reporting packages. 

For others, it might be the need to automate data aggregation from disparate sources to expedite the forecasting and planning process. Taking the time to define what success is for your Finance Function is your chance to create a wishlist of deliverables and workflow improvements across your operation.

2. Assess your finance operation and identify gaps 

The next step in your finance transformation begins with assessing your current processes and prioritizing improvements accordingly. Commonly known as gap analysis, you must take an unbiased approach to analyzing the current state of your Finance Function and dive into what might be lacking.

Identifying opportunities while unveiling your greatest areas of improvement can be a humbling experience, but more importantly, it should invigorate you as a finance leader to chart a path forward that will result in the greatest benefit for your organization.

Finance should be the most impactful function of your Company; however, if you’re unable to close the books promptly, report or analyze data efficiently and accurately, your potential impact is severely limited. Other business units are relying on Finance to not only measure performance but enhance it with strategic insight. This is precisely how mature Finance Functions operate. 

3. Develop a clear framework 

Once you’ve set your objectives and defined what a successful transformation looks like, you must ask yourself what is required to reach your objectives? To be most effective, you need to properly blend people, processes and technology in a manner that supports the needs of the Company. 

If reaching your new targets requires additional resources or expanded responsibilities for those within your Finance Function, they must have defined structure to work within. Structure is the key to maximizing the potential of your Finance Function, and is precisely why we named one of our finance software solutions Foundation.

Similar to a vehicle assembly line, those in your Finance Function should have specific roles and responsibilities that enable the next person in the workflow to fulfill their deliverables. You will need to ensure a proper synchronization between accounting and FP&A teams. 

Accounting is responsible for recording transactions and necessary financial details that already occurred. This is known as point zero, where the debits equal the credits and prepare a trial balance. From point zero onwards is considered forward looking (a future view) and this is where FP&A takes over. 

FP&A offers management the most direct value because they provide insight and analysis into forward looking initiatives necessary for the company to grow. Not to say Accounting is not important or valuable, without it, you’re unable to measure performance accurately. It’s a team effort to deliver reports, analysis and add value for management to make informed decisions.

4. Establish scalable finance processes

This is the stage where many Finance Functions face the greatest uphill battle. Assessing the current state of your operation and defining necessary goals to achieve can be easily understood, but how you approach your transformation is what separates good from great Finance Functions.

What exactly are scalable finance processes? Scalable processes are solutions to satisfy necessary deliverables and workflows that can withstand the test of growth, potentially at a rapid pace. Take the annual budgeting processes as an example. 

Many approach the annual budget process as a finance exercise to collect information from different business units and departments within an organization, and aggregate that information into a collective company-wide budget. Several bottlenecks arise in this process. First, stems from the method companies go about collecting data from multiple department heads. 

Typically, spreadsheet templates are sent out to budget owners, requesting them to input their respected data. The problem? Templates are easily changed, even when you clearly advise not to alter them. Maintaining version control over the data is an uphill battle and connecting the imputed data to your models inevitably leads to things breaking. Not to mention the timeliness of all budget owners submitting their numbers varies, and rarely is everything completed on time. 

These are just a few of the frustrating aspects of budgeting season for Finance professionals. This might get you by a couple of times, but it is by no means the optimal approach. If you’re wondering how to improve the budgeting process, see our blog post where we cover some of the most popular budgeting methods here. 

At this point, involving external expertise, those with a proven track record of success, should be prioritized and is usually necessary to continue on a successful path. Remember, repeatable processes are necessary for you to scale your Finance Function and keep pace with the growing needs of your company. The optimal partner can guide you along your journey at an accelerated pace and empower you to be the star of the management team.

5. Adopt new and robust technology

New tools come with new excitement and trepidation. It might seem obvious, but it’s essential that you have the right tools for the job. A carpenter wouldn’t limit themselves to only a small handsaw. Finance is no different. Legacy technology and tools like Excel aren’t ideal for collaboration. They lack necessary version control standards and are prone to manual error. 

FP&A tools and technology should be robust enough to expand the analysis of your data in a new light, without being complex enough that nobody on your team can use it. Change management might seem intimidating, but the ease of use and implementation of tools is not created equal. Some tools will appear to solve your problems, but will require lengthy and costly training and implementation that you simply don’t have time or resources to commit. 

Tying in with your assessment, you should be able to identify what tools are required to reach your objectives. If we think about the arduous budgeting example, there’s hardly any control over the data or actual collaboration. However, a robust tool dedicated to FP&A offers version and administrative controls allowing you to work with the most up-to-date data,  while encouraging accountability, and offering actionable insight based on deep analysis. 

To achieve a fruitful Finance Transformation, you must adopt and implement modern software solutions paired with tried-and-true Finance, Accounting and FP&A best practices in the most seamless way possible. It’s not an easy feat, but partnering with the optimal vendors will accelerate the maturity and capabilities of your Finance Function.

6. Align and communicate goals effectively

The goals of your Finance Function should reflect the needs of your Company. Working from a single and undisputed set of financial and operating metrics, the conversations at the executive and board level become increasingly productive and strategic. This is the sign of a well-oiled finance engine operating in synchronization. 

Compelling storytelling is somewhat of a lost art. Nonetheless, it’s a necessary soft skill that should become part of every finance executive's repertoire. The most important trends and insights revealed in your analysis should resonate with management and your board beyond the financial statements. 

Including stacked bar charts and other graphs that compare multiple sets of metrics to reveal insights and trends in management reports and board packs is optimal. But don’t be afraid to sprinkle in real-life analogies, even those that aren’t work-related, like sports, music and appropriate pop-culture, when applicable. Remember, your Finance Function should inform and guide decision-making discussions, and the more your analysis and recommendations are clearly understood, the more strategic impact you will have.

The road to transformation starts here

Finance is the governor of company conversations and facilitates opportunities through insights to fuel strategic objectives. Experiencing difficulty delivering on these actionable insights in a timely and predictable manner is common and telling, that your Finance Function is in desperate need of a transformation. 

Thankfully, you don’t have to face this seemingly daunting task alone. Whether you're a CFO, founder or CEO, or an FP&A manager you’re looking to accelerate the capabilities of your Finance Function, without the lengthy or complex implementation process, our solutions are for you. FutureView pairs its robust and centralized FP&A Platform with expert finance services into a combined offering that you won't find anywhere else.

To learn more contact our finance experts and request a demo of our FP&A Platform today. Our finance experts have decades of transformation experience and would love to help you in your journey. 

FP&A Software to help transform your finance function