Finance Transformation in focus: how to deliver added value in 2021

January 11th, 2021

Finance Transformation in focus: how to deliver added value in 2021

To deal with the continuing COVID-19 fallout, the pressure is on CFOs to shape business strategies for survival, stabilisation and recovery. So, are businesses equipped to handle what lies ahead? A year ago, strategic transformation of the finance department was something to aspire to; in 2021, it is business-critical.

COVID-19: the great transformation accelerator

Has COVID changed anything fundamentally? Arguably, when we look at things like the fall of high street names and the rise of flexible working, a more accurate assessment is that the pandemic has accelerated trends that were present already.

This certainly applies to finance transformation. Long before COVID, the function of the finance department was shifting. Being a keeper of the books and an overseer of reports is no longer enough for any CFO. Businesses want a truth-teller, a first-responder and a course-corrector.

Above all, they want a value creator; a role that the vast majority of CFOs are more than happy to fill. Faced with continued workplace disruption and market uncertainty, the need for CFOs to take a major strategic role has never been greater. Trouble is, if you are grappling with day-to-day reporting, oversight and compliance requirements, there just isn’t enough time to focus on value-added

This is where finance transformation comes in. We are not talking about adopting new tech for the sake of it. Rather, it’s about process, system and cultural change right across the organisation, with two key aims in focus:

  • Streamlining, simplifying and optimising existing processes. This frees up bandwidth, enabling you to expend fewer resources on transactional processing and reporting.
  • Increasing your decision-making capabilities. By leveraging your data and boosting your analytics capabilities, transformation enables the CFO to become a strategic business partner.

Research from Grant Thornton shows how the events of 2020 have inevitably led to increased pressure on senior finance executives to focus on strategy. But at the same time, 62% of businesses say that the COVID crisis has meant that finance transformation projects have had to be delayed.

It is unfortunate – albeit somewhat inevitable – that many businesses have had to step back from their transformation plans right at the time when the need for change is at its greatest. Right now, a workable, affordable strategy for transformation is essential: one where your business can reap the benefits from the outset. If this is your aim for 2021, then these are the areas to focus on…


Corporate finance teams spend an estimated 80 percent of their time on gathering, verifying and consolidating data. This leaves only about 20 percent for value-added tasks such as analysis and decision-making.

To transform your focus, you firstly need to redress this balance. Here’s a broad roadmap for achieving precisely that:

Carry out a resource audit. Simply put, this involves working out where all your department’s time goes. Common culprits include operational and regulatory reporting, requesting (and chasing up) data from various parts of the business, consolidation and reconciliation. These are the areas that are usually ripe for transformation via automation.

Look for ‘easy wins’. Deploying a transformative solution for a particular business problem does not always have to mean ditching the technology you have already. Let’s say, for instance, that your department is currently grappling with the recent rules changes relating to lease accounting and revenue recognition. Dedicated compliance solutions mean you can automate complex calculations, keep your general ledger up-to-date, and keep regulators at bay, thanks to a clear audit trail. Even better: with a best-in-class compliance solution, it is usually possible to reduce your reporting workload, without a complete overhaul of your existing accounting technology stack.

Explore your optimisation options. You are already invested heavily in financial management and accounting software. Despite this, your team still seems to be spending an inordinate amount of time on routine, transactional tasks. So what’s going wrong? Often, we find that there are certain business-specific processes that are creating the stumbling block.Through targeted help such as a custom automation solution designed specifically for the process (or even just through expert reconfiguration of user dashboards), we are able to make a huge difference.

Data analytics

Once you have freed up resources, you can focus on delivering strategic business support. This is where data analytics comes in. From setting realistic budgets through to identifying your organisation’s most profitable product lines, data analytics gives you the ability to answer key business questions – and to do so with confidence.

To enable effective transformation, your data analytics project needs to cover the following:

Integration. Business leaders will be looking for you to deliver the full picture on organisational performance. This is why you need to ensure that all relevant data is integrated from across the organisation.

Timely access to insights. In 2020, we saw just how quickly the market landscape can shift. When conditions are altering day-to-day, the idea of quarterly or even monthly budgets seems hopelessly out of date. In fact, one survey showed that when employees require data-based evidence to take action, just 3% have access to it. For 60% of staff, acquiring the data takes hours or days. For effective transformation, focus on solutions that deliver the ability to monitor performance and budgets in real time.

Forecasting and modelling. Faced with the need to make savings, should you make across-the-board cuts, or focus on specific departments? What will be the impact of an exchange rate shift, a supply line delay or a price increase? You need the ability to model “what if” scenarios with ease, to stress-test possible courses of action and reach evidence-based decisions.

Big Data and AI

In sectors as diverse as banking, logistics, manufacturing and retail (to name just a few), data is generated at every turn. Your business almost certainly has a growing number of devices, systems and applications in play. So how might this benefit the finance department?

It links back to the need for rapid insight. In particular, forward-thinking CFOs already recognise that if you want to provide business decision makers with the most up-to-date insights, you need the ability to capture data produced on the shop floor and beyond. Once harnessed, you need to be able to connect this data, analyse it, and translate it into insight.

‘Big Data’ analytics has the potential to deliver insight from across all operations, giving CFOs the potential to react quickly to rolling events and identify inefficiencies. So how do businesses put this capability to work? Here are the areas to focus on:

Data architecture and integration. To make use of large volumes of machine-level data, you need a ‘Big Data-friendly’ solution for extraction, migration and integration. Technologies such as Microsoft SQL Server Integration Services (SSIS) or Oracle Data Integrator provide the foundations for even the most complex data initiatives.

Advanced analytics and AI. With robotic speed, advanced analytics solutions incorporating artificial intelligence (AI) are able to mine vast amounts of data for insights, automatically recognise risks and flag up events, assess thousands of variables, spot problems and highlight opportunities.

What next?

For CFOs committed to adding extra value to their organisation in 2021, the three key questions to ask are as follows:

  • Do we have the potential to streamline routine processes and free up resources?
  • Can we deliver the right insights to the right people at the right time?
  • Are we making the most of the data that exists in the organisation for more accurate insights?

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