5 Critical Steps in Successful Finance Transformation From Accenture [Webinar Recap]

5 Critical Steps in Successful Finance Transformation From Accenture [Webinar Recap]

Predicting the future with perfect clarity is impossible. Who saw Brexit coming? How about the end of brand loyalty or the rise of Snapchat? Accounting for change when everything is changing can make business planning a difficult affair.

And yet, none of this is new. If there’s one unalterable truth about business it’s that change is constant and there will always be new data, new scenarios, and new questions to answer. In an ever-changing corporate world, finance teams have become the first responders. Few are ready to meet the very real demands of that role today, and it’s only going to get tougher in the years to come.

To help close the gap we recently held a webinar with Accenture in which Matt Aldridge, a senior principal consultant with a specialty in corporate financial planning and analysis (FP&A) processes, explained best practices pulled from the firm’s recent survey of U.S. and international companies. Read on for a summary of his findings.

Why Transform Finance?

At a high-level, the call to get finance more deeply involved in the business is less about finance and more about what it means to be a nimble company. Response time is more crucial than ever.

“What’s the goal of transformation? To elevate finance from a backward-looking function focused on capturing and reporting results to that of a forward-looking business partner that captures and analyzes data to assess opportunities and drive new value,” Aldridge said during the webinar.

If that sounds like a tall order, it’s because it is. To do it right, executives and finance teams need to work together and take action in these five areas.

  1. Get the right people involved. Start at the top. Who needs to see the data? Why and for what purpose? When you really dissect and understand how decisions get made, it’s easier to get key executives the information which helps them get to done. Just be judicious. According to Aldridge, most executives at companies large enough to need an enterprise performance management (EPM) platform are looking at between 10-15 key performance indicators (KPIs) “ideally,” he said. “And they won’t all be financial.”
  2. Look at all the drivers of your business. To do that, you need to look at “a well-balanced mix of leading and lagging indicators,” Aldrige said. He’s referring to both prior quarter performance (a lagging indicator) and leading indicators that suggest where demand is headed. What’s a leading indicator? In the auto industry, gas prices help inform consumer buying patterns, They’re a leading indicator that tells carmakers to build more economy cars when gas prices are high, and more SUVs when they’re low.
  3. Align business and finance processes everywhere. Performance management is a “continuous process” that works at every level, Aldridge said. First, you set targets, then you plan, report, and ultimately find and fix gaps. Think of a large logistics company which operates a network of distribution centers. Matching revenue to delivery times could be a crucial indicator, with slips revealing a potential gap in service.
  4. Choose flexible technology for performance management. The right mix can produce “a huge return on investment,” Aldridge said. Key is having tools that allow for proper governance and management of the data used by FP&A teams so there’s one version of the truth instead of 30 Excel spreadsheets in a commingled mess. At that level, automation become possible and finance teams “to get out of Excel … to focus on business partnering,” Aldridge said.
  5. Take a phased approach. Moving from Excel to a more automated and intelligent EPM approach takes time and focus. Decide on your key performance indicators (KPIs). Look at how you get the data today and who needs access, then automate everything that’s not giving you KPIs. That’s finance transformation in action, and it needs to cover all three “dimensions of people, process, and technology” to be effective, Aldrige said of the most consistent finding in Accenture’s research..

Learn More

Watch this on-demand webinar to learn essential steps to prepare for and begin implementation of a practical financial transformation strategy.

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