What Finance Pioneers Are Doing to Drive Value into The Business [and What's Working]

Shared Services leaders are finding themselves at a watershed moment. With the past characterized by transactional efficiency and the future by knowledge driven value-add, now is the time to be proactive.

As always, there are the pioneers amongst us who are blazing a path into the future. We have reviewed some of the most impressive examples to date, to identify how and where these pioneers are making a difference. Here are seven areas that offer real opportunities for change – and 5 leaders who are not afraid to break the mould.

1. Reducing complexity

The streamlining that we are witnessing across financial services as a result of, first, standardization, and then automation, has led to a significant reduction in complexity and thereby errors and cost. Many Shared Services are set up against a background of fragmented and duplicate processes, resulting in inefficiencies. A Shared Services-enabled model aligns finance processes against one standard definition and, ideally, across one platform. Standardization also rids non value-add steps and simplifies accountability.

The main areas where standardization impacts efficiency are in application integration, consolidated accounts, co-located teams and through Shared Services. Automating processes and controls also provides a more efficient control environment and improves transparency.

Comments:

"If you reduce complexity effectively you can open up time and space for your people to add more value to the businesses they support."
David Lain, Finance Business Partner, BBC

"Reducing complexity also means stop doing things which are not adding value to the business. The most common and obvious area is management reporting. Every report published in the business brings complexity not only to the teams who are doing it, but also to everybody who is receiving it. The real objective should be to make sure that the business receives the information it needs rather than the information it wants, and that is where Finance professionals play a vital role – in ensuring the right level of leadership and governance around that".
Wojciech Wieronski, CFO, Tesco Czech Republic

"I totally agree on this one. We are experiencing this as well. I would say that we have moved towards automated orders / invoice systems dramatically (it is semi-automated now). These systems not only have decreased costs and standardized processes; there are now also significantly fewer "unexpected" issues, which would otherwise increase costs dramatically."
Marius Jankauskas, CFO, Amber Food

"All true. The trick is, though, to hand over intact E2E processes to your Shared Services provider. If your processes are not intact and you hand them over, don’t expect things to work for a while, particular as you have added another interface to an already non-effective process."
Jens Madrian, Former CFO, RWE Npower

"Reducing complexity is a must in Financial services because the world is getting more and more complex. As a result of this increased complexity in Finance transactions the need to simplify the process at the same time is enormous."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

"Also worth mentioning is that we often do the same process differently in different companies, divisions, countries, etc. Even when we are part of the same group and use the same ERP. Sometimes Simplification is as simple as "doing things the same way".
Michael Hyltoft, Director of Operations, Ultra Electronics

2. Promoting talent management

Finance "personnel" is no longer an HR problem. With automation taking up much of the transactional slack historically associated with "accounting and finance", savvy finance leaders are looking to build up a team that is strong in analytics, interpretation, communication, and negotiation. This ties in with the trend towards partnering that is redefining finance’s role in organisations. In this new, collaborative environment what’s needed are employees that understand the end-to-end aspect of a process, and can empathize and interpret its impact for customers. Investing in the new skills demanded by a more integrated finance function means exponentially higher output in terms of value adding contribution to the business and its customers.

Comments:

"Finance teams have the opportunity to reshape and redefine their role to become a more flexible, agile and trusted partner and advisor to their business. You need a clear strategic vision for Finance that the business understands and buys into. Its success (or otherwise) will rest on the energy, drive and quality of your people!"
David Lain, Finance Business Partner, BBC

"With more focus on efficiency and simplification within Finance operations there needs to be more focus on developing stronger leadership within the function, which, together with sound technical expertise and knowledge, will ensure true business partnering.

"First thing to do is to move Finance people away from their desks and ensure they are visible in the business and can actively contribute to the decision making process at each level of the organisation. It is also about changing the culture in the organisation to ensure that Finance is perceived as an integral part of the business rather than just a support function. It is about how we motivate people, give them exposure, set up their objectives and accountabilities, and how, ultimately, we manage their performance. Finally, obviously we as Finance Leaders need to lead by example – by being true partners to the rest of the leadership in the company, we will naturally inspire our teams to follow."
Wojciech Wieronski, CFO, Tesco Czech Republic

"The technical aspects of finance transformation are very important. However, success ultimately depends on people. This means getting everyone engaged, and ensuring full alignment between personal targets and the company’s strategic objectives."
Onder Senol, CFO, defacto

"People in my department [Finance] are hired either by me or my subordinates. We usually partner with HR and ask them for help in the very early stages of hiring. The definition of ‘demand’ for certain skills and employee development has also always been one of my priorities."
Marius Jankauskas, CFO, Amber Food

"‘Finance personnel’ never was an HR problem … The crux of it is that it’s not the standard chartered accountants who will necessarily develop into insight analysts, and it’s not classic Finance knowledge that will satisfy the needs of the future Finance team. Instead, these may be more statisticians, data scientists, behavioural scientists and social media experts … folks who have a solid digital and commercial background and can analyse leading business KPIs, and, as a consequence, are able to predict lagging financial outcomes and performance. There will be a big transformational shift in Finance from dealing with past events and looking backwards, to more Business Partnering, and creating valuable insights to drive Business Performance up."
Jens Madrian, Former CFO, RWE Npower

"The key in promoting talent management in Finance is to develop or look for new competencies, such as cognitive intelligence, prescriptive analytics, and problem solving techniques."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

"The ability for Finance to identify/analyse that they can generate more cash is not enough any more. They need to be out there supporting, advising and helping the business in delivering these improvements. Easy to say we do analytics, but do you actually also deliver the outcome?"
Michael Hyltoft, Director of Operations, Ultra Electronics

3. Better support of strategic objectives

In its new role, finance is positioning itself as a strategic partner to the business, to drive profitable growth on the front-end, rather than restrict itself to optimizing and analysing historic financial results. With new capabilities around data analytics taking priority, finance’s ability to take a proactive role in strategic planning is an enormous value-add.

According to recent research by PWC, leading companies are allocating a higher percentage of finance’s time and resources to planning, analysis and management activities. [With median percentage rates at 17.2%, best in class companies are investing 28.7% of total finance costs in planning, analysis, and management activities, with analytics leading.] The main shift therefore is away from transactional processing and towards analytics and knowledge-based activities.

Comments:

"I couldn’t agree more. Finance’s role as efficient operator will change. The digital transformation turns Finance into an insight engine for the business, offering informational support for strategic decisions along with business performance measurement and review.

Ok, the Finance function still needs to be an exceptional guardian and efficiency leader to the business, but this is not where the CFO can differentiate or create a competitive advantage. In these areas, we should expect to achieve the same results with less resource – following the rules of pure cost efficiencies."
Jens Madrian, Former CFO, RWE Npower

"Analytics and knowledge-based activities that positively impact the business growth count. At the same time, the cost effectiveness of the Finance function remains the basis, because only profitable, sales generating activities pay off."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

"Finance needs to apply a much more forward-looking approach in how it supports and influences business strategy. Analysing historic performance is good, but only if that helps to steer the business going forward. With analytical capability as well as data ownership, Finance should play a vital role in leading strategy development for the company, helping executives to understand the financial implications of the chosen options before their implementation. This obviously has to be fully integrated with the overall business strategy development to make sure the business delivers on its vision and objectives to all key stakeholders – customers in particular."
Wojciech Wieronski, CFO, Tesco Czech Republic

"CEOs are pushing their CFOs to take on more initiatives – and it might not only be cost-optimizing projects – even new ventures! Since analytics has always been a high priority for me, I cannot see huge changes here. I would only say that data should be reached faster and deeper – and we strive for that every year."
Marius Jankauskas, CFO, Amber Food

4. Enabling faster, better decision-making

With everything from time-to-market, to delivering product, to breaking into new markets, under pressure, the ability to access, analyse, interpret, and prescribe appropriate decision-making on the basis of internal as well as external data is a game changer. New finance technology supports the demand for analytics, and access to real-time data, interpreted and visualized to identify patterns that support the improved decision-making CEOs are pushing for. In addition, improved transparency means bottlenecks and sources of inefficiencies are more easily identified and countered.

Comments:

"You have to deliver the core of your finance service well – reporting business results, providing financial control, transactional support. Fire-fighting issues across your core deliverables pull teams away from the partnering agenda. Your talented finance professionals in the right environment, with the right leadership and support can make a big difference"
David Lain, Finance Business Partner, BBC

"Transforming data into valuable management information, allowing effective decision making, is in my view a real competitive advantage. There is plenty of data in the business, used and analysed by various functions, obviously Finance in first place. This data can only become useful if it is collected in the most effective way, and processed very efficiently and quickly, so that the management information coming out of that is up to date and relevant for current decision-making. Hence, technological improvements in terms of data processing and warehousing, combined with people analytical capabilities, can make a huge difference in how the business in run and, ultimately, can be its key success factor."
Wojciech Wieronski, CFO, Tesco Czech Republic

"I agree, but I also cannot see how we can make any more high-end improvements. My boss gets a consolidated profit and loss statement on the first working day (in the evening though) of the next month. We are also tracking the highest amounts of costs every ten days, and checking the deviations from the plan and sales. Some pressure, I assume comes from the usual demand for higher accuracy in results (since we are providing forecasts here)."
Marius Jankauskas, CFO, Amber Food

"Improved decision-making leads to increased demand for predictive data analytics and real-time data. It also calls for more intelligent forecasting abilities that are required from the Finance team. Not only new technology helps in this process. What is also important is the communication and the ability to gather the unstructured information from sales, market, procurement and other people in and outside the company."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

5. Providing agility

The days of Titanic-like inertia in corporations are over [or should be]. Where momentum in a given direction is not easily changed, companies and their shareholders soon bear the brunt of the cost. Today's organisations need to demonstrate agility and flexibility in face of ever-increasing speeds of change in external environments. Streamlined processes and behaviours make this possible, as do access to data and improved decision-making described above. What is also required, however, is a finance leadership that is able to adjust quickly to a new situation. Many finance functions have implemented Lean or Six Sigma improvements within their operations, which eliminate non-value add steps and support quick reactions.

Comments:

"These "days of inertia", as you say, are not quite over. It will take a while. For sure, though, it will require transformational leadership."
Jens Madrian, Former CFO, RWE Npower

"Flexibility and responsiveness are key skills to be demonstrated by the Finance function. The world is changing rapidly, so the businesses need to be able to respond and adapt quickly. I come from an industry (retail) which is experiencing a massive turnaround in terms of market dynamics as well as technology development disruption (online trading and personalization).

"As those changes are happening very quickly, as a Finance function, we need to be able to steer the business in responding tactically and strategically, evaluating possible impacts, and figuring out mitigating initiatives. As mentioned above, analytical capability together with business partnering is playing a vital role."
Wojciech Wieronski, CFO, Tesco Czech Republic

"In our case, our business does not suffer from the "inertia" you mentioned as (1) we are too small for that (1bn EUR in sales); and (2) we act really quickly, as opportunities approach."
Marius Jankauskas, CFO, Amber Food

"Lean and Six Sigma are fundamental to the Finance function today. They eliminate non value-add steps and improve the transformation to value-adding processes."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

"Regarding points 4) and 5) above, they are essentially the same thing, for me – or at least very connected. If we deliver better and faster decision making, are we by default not more agile to changes?"
Michael Hyltoft, Director of Operations, Ultra Electronics

6. Leading in innovation

With so much technology development focused on finance and accounting, those leaders prepared to take a risk in adopting new solutions stand to reap rewards. We see that happening right now, with early RPA [robotic process automation] adopters saving time and money, but also enabling faster processing and vastly improved service to business units. For those that prefer to wait and see, the year or two they sit out may never be caught upon the other hand, with innovation a constant they may find that two years later what's on offer is far superior to the initial prototype. These dilemmas are common for all leaders. But where technology can drive such step change in value-add, lagging may not be a viable option.

Comments:

"Innovation needs to become part of company culture or even a required leadership skill as it is in the case of my organisation. It needs to be lived in every part of the organisation, on different management layers and be promoted through talent and career development. Technology development is a natural trigger and enabler to be more innovative but it should go beyond new systems implementation – it is predominantly about the entire end-to-end process, as well as ways to deliver our main role, which is true business partnering."
Wojciech Wieronski, CFO, Tesco Czech Republic

"Completely agree – I call this the ostrich tactic – putting you head in the sand and hoping that the storm passes by. It may create a moment of naðve happiness at the beginning, but this strategy never works."
Jens Madrian, Former CFO, RWE Npower

"Lagging is not an option but wrongly applied new technologies can lead to even more complexity. The promised effectiveness could be lost in finding solutions for new problems that have never existed before."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

"I love RPA, and based on some of the stuff MIT is working on, it will rock our world.... in about 5 to 8 years’ time. Yes, of course, if you have a massive-sized call centre, you should look at RPA today, but for the majority just getting the simple things right will result in a massive improvement. Why are we still talking about electronic invoicing and workflow, when all of these things have been around for over a decade?"
Michael Hyltoft, Director of Operations, Ultra Electronics

7. Walking the talk…

Most contemporary management literature refers to ever more collaborative businesses making better decisions on the basis of transparent information. So far so good. While it's hard to argue anything but support for this approach, turning it into practice means facing sometimes insurmountable internal hurdles. It's those that relish a challenge, a confrontation, and even the risk in driving transformation forward that also stand to reap the greatest rewards. Finance stands at a particularly lucrative juncture of business reality and strategic intent. If there is one position that is able to incorporate everything you envision about tomorrow's world, it is the finance leader. With the confidence of data analytics in his or her back pocket, and and the right mind-set, we can expect far greater roles and strategic influence ahead.

Comments:

"Uncertainty and change dominate the business landscape. Our people need to be ready to work in this environment. Are they equipped with the mix of skills to flourish and to play a more strategic role? Do they relish the challenge? It's not for all. We have to ask ourselves: Do staff have the freedom to act? Do they take the initiative, take risks and responsibility...do they challenge, question, empathize? Are they passionate about their business? All are key in being an effective finance leader."
David Lain, Finance Business Partner, BBC

"The Finance function should evolve from its traditional role of being an independent judge of everybody’s KPI delivery, to become a leading function in terms of encouraging and engaging the entire organisation around strategic goals delivery. It should start with the KPI set up, which should not be conflicting cross-functionally, but integrating relevant functions around joined-up delivery of them, while fully embracing true collaboration. On top of that, Finance should always ensure alignment with strategic objectives and discourage short-term thinking. Therefore, robust data analytics and insight becomes critical to deliver this crucial role in a very dynamic business environment."
Wojciech Wieronski, CFO, Tesco Czech Republic

"CEOs are also pushing their CFOs to take on additional roles/functions – to undertake M&A, to participate actively in strategy formation, and performance management."
Marius Jankauskas, CFO, Amber Food

"This is a very true statement, that the Finance leader is a strategic influencer and as such he or she should know that they have enormous impact on the lives of many people around them (stakeholders like employees, shareholders, suppliers, customers, etc.). Their influence can be either positive or destructive, and it is the Finance leader who choses the path."
Marek Gruszecki, VP of Finance, Quad/Graphics Europe

"This is really about the fact it is easier to do nothing than to "do change". And in today's world (the Western part), are there really incentives to push change in an organisation, as all you may get out of it is the sack, if it goes wrong? Hence, there are so many consultants around, offering "best practice" advice, even though they have never worked in the real world. But that strategy works because we can tell the board, that XYZ suggests this and this, and so it’s not our fault if it doesn't work.

"I think "Big Data" is missing in this list. I think more RPA and big data can drive benefits in the short term. Who can use their data in the best possible way, to drive competitive advantage? Can I forecast which of my customers will struggle to pay and then act accordingly before it becomes a problem? Can I see which skills are needed in my business in the long term, and start developing my staff so I am ready?"
Michael Hyltoft, Director of Operations, Ultra Electronics