2. The Case For Finance Transformation
FP&A
Risk Management
(Controls)
Transaction
Processing
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High
Performer
Median
Performer
<1% of
Revenue
1-2+% of
Revenue
High performance Finance organizations deliver greater business value
at lower cost
• Process efficiency, competent
staff and effective
management practices drive
down processing cost and cycle
time while improving quality
• Transactional process
excellence and effective use of
technology enable more
reliable controls with less
manual effort
• Significantly more time
dedicated to FP&A with greater
focus on predictive analytics
and strategic support to
enhance decision making
3. Strategic Business Partner Role
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Moving beyond observer and score keeper to support the business in
achieving commercial and strategic objectives
• Initiating and leading cost reduction and other business performance
improvement efforts
• Leverage data from outside the accounting system to enhance value of analytics
• Support assessment and management of operational risks
• Spends more time forecasting results and developing options for optimization
than reporting and explaining historical performance
• Delivers information and insight rather than just data
• Ensures business decisions are based on sound financial analysis with proper
risk consideration
• Facilitates transparency and accountability for financial performance
• Supports investment and portfolio decision-making with an emphasis on
effective resource allocation and capital efficiency
4. Finance Organization Challenges
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CFOs are wrestling with a variety of questions as they try to move up
the value curve.
GrowthRiskControlsCost
How can we build
finance acumen in the
business and business
acumen in Finance?
How can we improve
governance,
teamwork and
leadership?
How do we get
involved in business
decisions at an
earlier stage?
How can we bring
challenge and rigor to
decision-making?
What are the levers that
drive business success?
How can we integrate and
align the function with
the business?
How can we build
trust & credibility as
well as communicate
& engage more
effectively with the
business?
What are our strengths,
weaknesses, opportunities
and threats?
5. People
Management
•Improving employee engagement, retention and competencies
•Increasing collaboration within the finance organization and with the
business
Process
Management
•Reducing errors and cycle time
•Eliminating waste and value-destroying complexity
•Improving control effectiveness through process standardization
•Leveraging automation for repetitive tasks
Technology & Data
Management
•Resolving data issues resulting in multiple versions of the truth
•Reducing dependency on Excel to plug core technology gaps
•Improving data accuracy and accessibility for 24/7 business support
FP&A and
Specialized Services
•Enhancing the value and reducing the pain of budgeting and forecasting
•Addressing excessive working capital and poor capital efficiency
•Improving target setting and risk management to achieve higher ROI
•Improving effectiveness of cash forecasting and tax planning
In moving towards high-performance most organizations define a set of objectives
that address every dimension of their operation.
Typical Transformation Objectives
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6. Designing an Effective Transformation Program
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Additional information is usually
required to determine scope,
targets, actions and pace
Data
Technology
Manage-
ment
Systems
Workforce
Processes
Simultaneously working every issue is
usually impossible given resource
limitations and risk implications.
Interdependencies and
competing business priorities
must be considered
The program must deliver early
wins without jeopardizing long-
term sustainability
7. EOD Finance Maturity Model
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Organization
Management
Process
Management
Technology & Data
Management
FP&A and
Specialist Services
• Role of Finance
• Functional Plan
• Leadership
• Teamwork
• Org Structure
• Talent Management
• Competencies
• Cost Management
• Methodology &
Governance
• Continuous
Improvement
• Controls
• Order to Cash
• Procure to Pay
• Record to Report
• Data Management
• Transaction
Processing Systems
• Reporting &
Analytics Tools
• Strategic Planning
• Reporting &
Analytics
• Planning, Budgeting
& Forecasting
• Target Setting
• Capital Project
Support
• Risk Management
• Treasury
• Tax
• Capital Stewardship
• M&A
A qualitative assessment tool covering 27 elements of Finance organization
management and functional scope used to identify specific performance gaps and
improvement opportunities.
8. Simple Finance Maturity Assessment
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Fourth Quartile First Quartile
Controls Redundant and/or manual controls;
significant control gaps
Heavy reliance on detective controls
Controls tightly integrated into routine
process operations
Heavy use of automated, preventative
controls
Order to
Cash
Excessive DSO and bad debt
Recurring order processing and billing
errors
Excessive ship-to-bill cycle time
Excellent cycle time, error rate, DSO, bad
debt
Rare customer complaints about order
processing and billing
Procure to
Pay
Frequent late payments
Limited early payment discounts
Excessive use of checks; limited use of
payment cards
Highly manual processing
Heavy use of electronic payments and
payment cards
Payment processing in shared services using
robotic process automation
Discounts and float optimized
Record to
Report
Closing and reporting cycle times slower
than peers
Excessive top-side entries
Routine reconciliation issues
Significant overtime during close
Data not easily accessible
Heavy reliance on Excel
Cycle times materially faster than peers
without overtime
Infrequent top-side entries and audit
adjustments
High confidence in numbers; one version of
the truth
Effective use of dashboards
How does your Finance organization compare?
9. Preparing for Launch
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• Do we have a compelling case for action?
• What might happen if we do nothing or defer the
start?
• What risks must we be prepared for?
• Do we have adequate leadership support?
• How do we involve our next generation of finance
leaders?
• What kind of help will we need?
• How much will the program cost? How much can
we afford?
• How will we manage prioritization?
• How will we manage the impact on our people?
Knowledge Domains
I Know I
Don’t
Know
I Know
I Know
I Have
No Clue
I Think
I Know
There are a number of key questions to address before launching a
transformation program.
Expand Knowledge to Reduce Risk
10. Critical Success Factors
The soft stuff is the hard stuff
• Clear business case for action
• Broad executive support
• Sustained leadership engagement
• Proper program management
• Address cultural issues
• Communicate, communicate, communicate
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11. The Payoff
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• Shift from transactional
to analytical / strategic
• Optimize resource
allocation
• Greater flexibility
• Maximize value generation
• Enhanced competitiveness
Initial Payoff
(Quick Hits):
Major Results:
Institutionalization:
Completion:
1 – 6 months
1 - 2 years
3 - 4 years
Never –
Continuous
Improvement
Set Ambitious Targets with Realistic Timelines
12. For More Information
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Steve Finkelstein
Senior Partner
314-409-6869
Doug Groves
Finance Practice Lead
832-523-9570
To learn more about Experience on Demand, Finance Transformation or the
EOD Finance Maturity Assessment please contact:
