Finance transformation is arguably an overused term, as eager vendors compete to win their share of the digitalization of corporate finance. It's understandable that some finance professionals, mired in the day-to-day realities of their work, may experience fatigue when hearing lofty claims about how technology will transform their function.
Yet that doesn't negate the fact that modern advances in technology have the potential to enable radical changes in the way finance professionals perform their duties. But potential and results are two different things. Around two-thirds of finance teams Gartner surveyed recently said their finance transformation speed was slower than expected.
The speed, scale and scope of finance transformation requires dedicated full-time management, and yet in many finance functions someone is trying to organize this "off the side of their desk" while they perform their day job. It's not a part-time job. In fact, Gartner projects that by 2026, organizations without a dedicated finance transformation leader role will be 2.5 times more likely to fail to deliver their transformation goals.
The candidate
Many CFOs look to delegate this responsibility, and often make the mistake of entering the enormously heated competition for a "digital guru" in the job market. The position, however, is arguably better suited to an internal candidate with a good understanding of the organization and the CFO's transformation vision. What's more, it will be a lot easier to find an internal candidate, avoiding the delays involved in external sourcing for this kind of position.
This isn't just a techy role. At a fundamental level it is redefining what the finance function looks like, and that is going to require strong people management skills to bring everyone on that journey. There is a big element of function management involved, and those thinking about such a position should see it as a potential path to a CFO role in future as it demonstrates a lot of the internal skills a good CFO will need.
There tends to be an assumption that this is a role best suited to heads of FP&A or those with an advanced data and analytical skill set, but those skills alone will be inadequate without the ability to navigate the internal politics of the wider business or to inspire disciplined pursuit of a multiyear plan.
Getting started
The first three months in a new finance transformation role are an opportunity to set out an agenda and establish a strong foundation. Proper preparation, assessment, planning, acting, measuring and, above all, communicating can greatly enhance the chances of a candidate's success. These steps are laid out in the diagram below, and the remainder of this article will expand on them.
Roadmap for a finance transformation leader's first 100 days
Prepare
A finance transformation leader's first 100 days are full of opportunities to make rushed mistakes with long-lasting performance implications. The early phases are where internal candidates may enjoy a significant advantage compared to external candidates as they likely already possess an understanding of the organization and wider business and where finance transformation is in that context. But things may look different from a leadership role, so whether internal or external, it will pay to understand what is expected of the role and what the criteria for success will be, who are the key stakeholders and what their expectations are, and what the organization's experience (positive or negative) with finance transformation is so far.
Also critical in this phase will be a meeting with the CFO or manager who manages the finance transformation leader to outline key opportunities and challenges, discuss the preliminary finance transformation vision and how it aligns with their perspective, and to agree a future communications schedule between you.
Assess
The assess phase is about evaluating current finance function performance, initiatives and structure, as well as establishing enterprise relationships — with the CIO or the heads of other business functions, for example — and meeting with key internal customers to understand the current state.
Avoid the temptation to solve problems or even render judgments at this stage. The main priority should be benchmarking finance's organizational maturity and conducting listening tours that will provide insight into pressing issues. This internal information will inform a strategic plan.
Plan
The goal of the plan phase is to create the finance transformation strategy plans for the organization. Armed with the information gathered in the assess phase about the organization's current level of maturity, create an actionable plan for specific areas of focus.
Ensure the plan includes quick wins, detailed operational initiatives for the next one to two quarters and medium-term goals for the first six to 12 months. Gain clarity about the resources needed (both within and outside the finance transformation team) to execute the plan successfully.
Once again, communication is key. This plan will not be achievable in a small silo. Finance transformation leaders will need to secure buy-in from right across their function and the wider business to stand a good chance of reaching their goals.
Act
Once the prepare, assess and plan phases are complete, it's time to put plans into action and deliver visible results. Refine the team, get involved in existing projects, execute collective quick wins, and communicate plans regularly to the CFO and other key stakeholders to establish formalized feedback loops. Monitor progress closely to ensure execution obstacles are dealt with swiftly and continue information gathering internally to iterate the longer-term plan.
Finance transformation is a long journey, however: several years at least. Keeping people bought into the journey will be difficult, so beware of concentrating all the quick wins in the early stages. Spreading collective wins over a multiyear period will help keep staff and stakeholders motivated.
Measure
Now it's time to demonstrate the evidence of the finance transformation initiatives. Share metrics, data points and anecdotal feedback. Identify the parts of the plan that are working well — mentioning early wins and progress — and challenges that need more time or additional resources.
Take the time to reflect on any accomplishments so far. Execute postmortem reviews to assess lessons learned and areas for improvement. When wrapping up the quick wins initiatives, review the goals and outcomes with the owners and stakeholders. Discuss any shortcomings and identify opportunities to improve the process for the next initiative. Check that goals are producing the intended outcomes and update your own perspective when necessary.
Make sure you don't look only at KPIs (how well) to measure the finance transformation performance. Focus rather on objectives and key results to help the organization focus on desired objectives (what) and the key results (how).
Toward the end of your first 100 days, prepare a short presentation for your CFO and/or manager and leadership team that tells a summarized story of your project outcomes and key findings. Keep your presentation simple by providing a summary of what you've learned, potential organizational and process changes, and the next steps ahead.
