Every company is filled with transformation projects in all areas as they continue to adapt to competition, changing demands and a rapidly developing world. However more than any department, you will find transformation projects in Finance. There is a constant flow of transformation going on however few are successful as documented in a study by CEB which shows that 70% of the transformation efforts will be unsuccessful. I have previously shared some of my insights into how to make you finance transformation more successful in Finance Transformation Should Be All About… People, but now the time has come, however, to introduce a framework you can use to analyze the current state of your finance department which will help you once you start the next finance transformation project. My company has used all the elements of it during its finance transformation projects over the past 6-7 years and while we are still on a journey we have definitely celebrated quite a few successes already.
The Finance Transformation Nine Box
The framework I call the Finance Transformation Nine Box, but unlike other nine box frameworks such as the Talent Nine Box this is less about moving between different parts and more about getting a much-needed structure on your transformation efforts. The Finance Transformation Nine Box looks like this.
With this framework in hand, you can easily start to categorize your finance department and identify where you need to improve. The overall idea is that you should minimize resources used in the bottom and maximize in the top. This is due to the fact that your business partnering function should be a value creator and have a positive effect on your bottom-line. The transactional accounting functions, on the other hand, are merely a cost magnet. You should not necessarily use more resources on analytics, but you need to do less manual analytics in Excel and start using more advanced data analytics systems. I will be presenting further details on this topic over the coming weeks as well as be a speaker at a conference on Financial Planning & Control later this year in Frankfurt. I am also working on a webinar that will give you more in-depth knowledge about how to apply this framework and the results you can expect to see.
Please also share your thoughts on this framework and if you think it will be useful for your organization?