Published on the 09/09/2021 | Written by Heather Wright
Take one big broken process and fix it…
Everyone knows what the broken processes in your company are. Finance transformation starts with fixing just one of those large, broken processes – and it’s a path that results in high credibility, and big wins.
Jeff Epstein, former CFO for a range of companies including Oracle, Nielsen and DoubleClick, and operating partner at venture capital company Bessemer Venture Partners, says digital transformation of finance doesn’t have to be complex.
During a webinar on driving growth through cash flow and working capital management from Tesorio, Epstein laid out a plan for digitally transforming finance operations – starting with that one big broken process.
“Do that one thing.”
His method: Make a list of all the key processes in your organisation and then ask people both in the finance team and in the wider business which processes are working and which aren’t.
“What I found as useful tactic was to go around the organisation within finance and outside finance and ask what are we doing well today, what can we do better and then write a list of all your needs of internal clients and then ask the same of external clients,” Epstein says.
“If you are like most companies you will end up with a long list of things you can do better and that connectivity between you and your internal clients, you and your external clients and between all the processes and systems is a roadmap for how you can improve and use technology to make things more effective and efficient.”
Using that easily attainable information, CFOs can create a 2×2 matrix showing large (involving a lot of people and expense) broken processes, down to small, well-functioning processes.
“When you think about finance transformation pick one of those large broken processes and fix that one first,” he says.
“Don’t try to do 10 things at once. Do that one thing, one large broken process and move it from the top right quadrant to the other quadrants where is it working well.
“That will free up resources and save you money and time.
“If you can just make some progress in one of those things people have been frustrated about for a long time you can get a lot of credibility and then build that process improvement muscle from there.”
Sarah Spoja, CFO of automation company Tipalti, agreed, but also urged attendees to think further ahead when they consider their digital transformation plans, considering future plans, such as the potential to open international offices or work with new partners.
“People need to think further ahead because otherwise digital transformation will feel like bandaids that they have to keep replacing over and over again and you won’t get the real value of being able to fix something and move on to [the next problem] and not have to think about the first thing, because you fixed it in a scalable way.”
That thinking ahead extends to thinking not only about what is happening now but what might happen if things go badly and making investments for the contingency plan, adds Epstein.
Greg Henry, CFO of database provider Couchbase, noted that for organisations that are large enough, having a business systems team to work with the CFO on the finance tools, can be ‘incredibly valuable’.
Couchbase, with 650 employees, has a three-person business systems team. “The value we get is tremendous in having people inside the company to help us evolve and create efficiencies without having to always get consultants or new tools.”
According to Gartner Research 93 percent of senior finance leaders were aligned on their vision for the finance function in 2025 and expected to see a function that is leaner, with fewer employees and more data driven. However only 39 percent of finance leaders said that their previous transformation efforts delivered the expected benefits to finance. Even fewer – 36 percent – reported tangible business benefits.
“Just because you can automate something, doesn’t mean you should,” says Carlos Vega, Tesario CEO.
While sometimes it’s easy to automate something just to get it done more quickly, it doesn’t always mean good results. He noted the potential to automate mail outs, sending out standardised, uncustomised templates to customers. “Yes, there’s the power to do that, but it won’t lead to more sales.”
Spoja says connected finance is about unlocking not just data, but also the finance team.
“It’s not just taking something manual, digital, but improving upon that digitalisation by improving the flows of data, information transparency, frequency and real-time nature of the data you can get and really just making the process or task as seamless and efficient as possible.
“But the second side is the unlock for your team. You can unlock your teams time and make sure they’re not doing manual and inefficient work, but also make sure they have the right tools in the technology stack to do work in the way they want to do it.”
She noted that many employees are mobile first in their personal lives.
“Coming into work doing manual repetitive and mundane doesn’t fit with who they are and what they want to be doing with their time.”
Using the right tools can help attract and retain talent, she says.