By Sharon Wood

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When the famous criminal Willie Sutton was asked, “Why rob banks?” he reputedly answered: “Because that’s where the money is.” We might give the same response to the question, “Finance Transformation—what’s all the buzz about?”

Unlike the corner bank, Finance departments don’t keep money on hand—but Finance is where the “money data” is. The Finance department is the nerve center through which all business transactions pass. It handles data for key statutory and internal reports; for critical analytics and KPIs, and; for budget, forecast, and strategic planning, which, when compared to “Actuals,” measure business performance.  Since all business activities foot to the bottom line, Finance is in the unique position to view a company’s past and present, as well as to contribute to a “vision” of where a company wants to go in future.

It makes eminent sense, therefore, for executives to prioritize Finance Transformation. Indeed, a Finance department that will work, for example, as a robust competency center for analytics and planning can better support transformations in other departments.

But what does transformation involve? Behnam Tabrizi, in his book Rapid Transformation: A 90-Day Plan for Fast and Effective Change, encapsulates the process as follows: “Transformation is a fundamental change in how a function operates to achieve a significant improvement in current performance by delivering services that better meet the needs of the business.” This idea of “delivering services” has a special meaning for Finance: certainly, in public companies Finance creates public/regulatory reports; but in all companies the “services” (reports, analytics, plans) delivered by Finance inform how the business is performing overall and—key point—in other company departments (sales, marketing, operations, etc.).

Tabrizi and other commentators point out that Transformation must not be construed as a technology overhaul, although, as we will discuss, the introduction of better technologies will be an element of any effort that aims to significantly improve performance.

For present purposes, let’s consider an example Finance Transformation initiative—call it, "Elevating FP&A (Financial Planning & Analysis) to be a Better Business Partner." It’s a worthy cause: a Wall Street Journal article explains that “FP&A often houses the analytical skill sets and business knowledge needed to provide business units with data-driven insights to support and inform decision-making.”

The following breakdown of this example FP&A transformation is according to a well-regarded 3-step theory of organizational change: People, Process, Technology (in that order).

Finance Transformation: People

Financial transformation-Business Intelligence TechnologiesThe People component of a transformation effort is arguably the most important, for without the skills necessary to run a modern Finance function (as in our example), the transformation exercise is destined to fail.

Certainly the staff on the team in question (FP&A) will need to be on board, but so too will the business unit leaders they will be working with. The often-used but still appropriate word here is collaboration—and not just to raise the performance of individual departments, but also the organization as a whole.

Leaders have a crucial role: to clearly articulate why they are setting down this path and what they aim to achieve, along with responding to questions like: What impact will a transformation initiative have on my job?  Furthermore, they need the resources to drive the project, and they must have realistic time frames attached to it. Ideally a designated project manager will be tasked with overseeing the transformation effort (or logical components parts) to completion.

Finance Transformation: Process

Here we get into the topic of what people actually do and how they do it, i.e., the activities that, once transformed, will enable the company to achieve its goals (since this is not “transformation for transformation’s sake!).

What, then, are the current processes that need improvement, and what kind of improvements need to be made? We can say with certainty that, in our FP&A example, these processes concern working with data. Is the objective to obtain better data quality? To work more quickly? To better simulate forecast and business scenarios? Often the response will be: All of the above.

We should emphasize that in this Process step “activities” have a human element—so, in our example, an additional objective may be that the FP&A staff achieve a stronger “service-oriented approach” in working with business unit leaders. Indeed, structural changes may be in order—the WSJ article referenced above details how an FP&A staff person might work in a one-to-one partnership with a business unit leader.

Finance Transformation: Technology

We now are in a position to consider Technology, the final element of Finance Transformation: "final” because Technology must be considered as a tool put to use by People for the Processes targeted for “significant improvement.”  Put another way: Technology is a means to end—that end being Finance Transformation; technology is not the end itself.

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It is unlikely (not impossible, just unlikely) that any company contemplating a Finance Transformation that includes a sophisticated technology will be able to go it alone, without assistance. All that said—a worthwhile reminder—a company should already have addressed those all-important People and Process topics before seeking a solution partner. And any third-party firm under consideration should respect the work done by the prospect and offer solutions that specifically suit the transformation effort underway.

As a firm that has specialized for years in transformation related to reporting, analytics and planning, Business Intelligence Technologies has broad experience in helping firms when they move into the Technology stage of their transformation. That is to say: BI Tech can integrate decisions made about people and processes, and introduce specifically appropriate technologies into the mix.

We recognize that not only are people different, but the technology tools they prefer to use are also different. In our example: FP&A is most certainly comfortable with spreadsheets; but other business leaders whom FP&A staff work with likely prefer to use visualization tools. There are solutions—BI Tech offers them—that respect this need for collaboration among user groups, ensuring one version of the truth across all preferred front end tools.

BI Tech provides solutions that will go directly to the process(es) targeted for transformation: in our FP&A example, this might entail implementing an Enterprise Performance Management solution in the Cloud, or a solution that bolsters HR metrics and planning capabilities

Up to this point, we have used an FP&A example of how a change in people, process(es) and technology may lead to Finance Transformation. There are many other examples in the Finance and indeed other departments that might be cited, having to do with Business Intelligence, Planning and related activities—all the concern of BI Tech—which will effect transformation that “[deliver] services that better meet the needs of the business.”

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