The finance function is a profession that is all about rules, routines and constructs. Its success is based in methodical and objective manipulation of data which is integral to keeping a business’s engine ticking. But it is that very quality that can be the biggest obstacle to operating effectively in the modern business world? Today, business has to be adaptive to keep up with an ever-changing marketplace. Transformation is the name of the game, and that transformation includes the finance function and often has to be driven by the finance function.
Nowhere is this more applicable than the move from an independent finance function model to a shared service or outsourcing model.
According to the ACCA paper, ‘The smart finance function in today’s complex world’, “Transformation of finance activities and operations is an essential component of the transition to smarter working. Increasingly, CFOs and finance executives have looked to shared services and outsourcing to drive greater efficiency and effectiveness in finance operations.”
An organisation has to realise that transforming is a finance function has an inherent challenge built into it – change is hard for rule-driven employees. “Fundamentally, the traditional accounting post required its holder to eliminate ambiguity, comply with myriad regulations, hold tightly to the reins of control, and make sure that all rules are followed. Yet shared services and outsourcing models change almost every aspect of the context in which they work,” say Deborah Kops and Jamie Lyon, who compiled the ACCA report ‘Transformation challenges in finance’.
This challenge means it is imperative for the finance leader to convince the finance team of the value of the change and then lead that change effectively with a comprehensive change management programme. Deloitte’s Peter Moller says, “It is important to understand what needs to stay the same, and when behaviours need to change. Don’t mess with integrity, probity, independence and stewardship – these are the heart and soul of finance operations – but there are behavioural aspects that can be changed in operations, such as fixation with bureaucracy, obsession with control, over-engineering of processes that need to change.”
Here is the crux of effective transformation in the finance function; finance leaders have to constantly and consistently communicate the business case for the move to a shared service or outsourcing model while understanding the dynamics of the team or departments affected in order to shift behaviour when necessary. Add to this a comprehensive change management programme and change becomes less of a challenge.