Transformation in finance

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Change in any organisation is difficult, especially when there is a change of
control, coupled with new rules and an industrialised way of working. Change is
potentially upsetting and in some cases even disruptive. However, businesses
constantly have to evolve to keep up with a dynamic marketplace in order to
remain competitive.

The Association of Chartered Certified Accountants (ACCA)has taken notice
of the trend for transformation and created a report entitled "Transformation
Challenges in Finance.' The report draws on the expertise of senior finance
leaders from some of the world?s leading organisations to deliberate common
obstacles that Chief Financial Officers (CFOs) face by finance transformation and
considers what the catalyst for finance transformation is.

Finance Transformation enables CFOs and finance leaders to increase corporate
performance and stakeholder value while dynamically improving effectiveness
and efficiency.The Transformation Challenges in Finance report suggests several
good practices that organisations can follow in transforming their finance
operations.

The report also outlines a number of advantages and disadvantages of
various transformation scales and speeds as well as the importance of
sequencing in the change process. The report highlights the benefits of different
sourcing strategies and discusses how CFOs can achieve broader business
support for change initiatives.

Today?s CFOs are tasked with ensuring that an organisation operates in a
smarter, essentially more efficient and effective manner. Finance leaders are
required to run their finance operations as cost effectively as possible, create
high quality stewardship and controllership and generate critical financial and
data insights that assist the CEO and the organisation to make accurate
commercial decisions in what is an increasingly complex and volatile
environment.

"The ultimate success of any finance transformation depends on people.
Chief Financial Officers are the sponsors of any finance delivery transformation
and should perform a leading role to ensure successful financial transformation'
-
Karen Smal, Acting Head of ACCA South Africa

According to the report, "Effective change management is at the heart of
successful finance transformation initiatives.' Yet change management is not
something that necessarily comes naturally to people in finance. Transformation
in the finance profession often encounters the challenge of being driven by a
logical thinker who believes that if he/she "gets it?, everyone else will too.

Change management is a well-documented practice with critical success
factors. According to the report "Enabling Organisational Change through
Strategic Initiatives', released by the Project Management Institute (PMI),
"Organisations that are highly effective at change management, Change
Enablers, incorporate certain practices that they deem important to the success
of strategic initiatives: having well-defined milestones and metrics, having senior
management committed to change, establishing and communicating concrete
ownership and accountability, using standardised project management
practices, and having engaged executive sponsors.'

According to Jamie Lyon, ACCA Head of Corporate Sector and co-chair of
ACCA?s Finance Transformation Advisory board, effective change management
capability is an essential ingredient for finance transformation success. However,
effective change management inlarge, multifaceted organisations is often difficult
to master.

The report outlined 10 key change management principles for finance
leaders seeking to successfully transform their finance organisations:

1. Establishing the vision - the criticality of spending time conveying the
transformation vision and goal
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2. Buy in - The importance of CEO and senior management support and
sponsorship of the programme
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3. Communication - The need for constant communication on what is
changing and the rationale for change
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4. Preparation - Ensuring finance teams are bought in and committed to the
change, and having an effective plan to manage the change process.

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5. Resources - Access to adequate programme resources at each critical
stage of the transformation process, from developing strategy to achieving
"business as usual? acceptance
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6. Patience - Accepting that large finance transformation initiatives can be
revolutionary and evolutionary with most change processes taking longer than
expected
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7. Organisation redesign - Remembering that redesign and use of finance
shared services or outsourcing necessitates change in the retained finance
function too - the imperative of changing the finance enterprise in its entirety.

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8. Maintaining middle management - Successful change management is key
to retaining the middle layer of finance management that is critical to core
processes. Yet all too often, middle managers? numbers are aggressively
reduced to justify a business case for shared services and outsourcing, or they
are lost in the shuffle.
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9. Alignment between capability and ambition - Often finance leaders
overstretch themselves to realise a vision that is way beyond their or their
enterprises?, ability to achieve. Being realistic about the organisation?s change
potential is essential.
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10. Working within the culture - Those who implement complex, multi-scope,
multi-geography finance transformation programmes, particularly in business-
line-led organisations, will experience the greatest change challenges. Gauging
the type of change the culture will allow is an imperative.
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To read more about transformation challenges in finance, visit:

target="_new">Acca Global

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