The importance of a finance transformation strategy

September 26, 2023

A blog post by Beth Kaplan, Katie Glynn, Eric Johnson, Shipra Khurana, and Brad Schulte

In our previous blog post, “Taking the reins,” we reflected on the importance of controllership having hands-on ownership in the transformation journey in order to achieve successful outcomes. When embarking on a business-driven, technology-enabled transformation such as an ERP implementation, the first key to success is establishing a transformation strategy. The question is, given the importance of a transformation strategy, what does a good strategy look like? And where should the controllers even begin?

Let’s review the critical elements that form an effective strategy, including some common challenges, and controllership’s crucial role in shaping a successful transformation journey.

Defining transformation strategy from controllers’ perspective

A winning strategy begins with a vision for a future of the controllership function, often focused on elevating the function’s value through real-time data and analytic insights while leveraging automation to become more efficient and agile. The strategy should be business-focused and technology-enabled, not the other way around. It should provide a North Star, clearly articulating the outcomes of the transformation and describing how the function will partner with the broader organization, including:

• Developing new or strengthening existing capabilities of the organization.
• Enabling more efficient service delivery by leading processes and applying automation.
• Increasing enterprise value by shifting from transaction processing to business partnership.

The transformation strategy should be sufficiently detailed to guide decisions on priorities, investments, and resources, and include critical components such as:

• Vision: How will the controllership function deliver value to stakeholders?
• Process: What work needs to get done in the future, and how will that work get done?
• Data: How can we shift accounting and financial data from a barrier to an organizational asset?
• Talent: What does controllership work look like in the future, and what skills are required?
• Resources: How will the transformation be staffed and governed, including third parties?
• Technology: What platforms enable the vision, and what is the right architecture?
• Road map: How are implementation milestones sequenced while considering accounting cycles and business reporting deadlines?

Controllership’s crucial role in leading a transformation strategy

Controllership, as the steward of financial accounting and reporting, is uniquely positioned to lead in defining a finance transformation and ERP strategy, and to identify opportunities, mitigate risks, maintain controls, and ensure financial reporting obligations are met during and after the transformation.

Let’s consider a recent real-world example highlighting the importance of defining a transformation strategy and North Star vision. A large multinational organization recently promoted a new chief accounting officer (CAO) who inherited an aging, fragmented technology landscape built on multiple disconnected data models due to a series of acquisitions. The chief accounting officer (CAO) felt an obligation to achieve globally integrated processes, built on a common data model and enabled by a modern technology platform.

The first step was to define a transformation vision for the accounting organization and engage IT leadership on evaluating the technology solutions to power this transformation. While working through the strategy, the team quickly realized it would not only impact the recording and reporting of accounting transactions, but there were many downstream stakeholders such as tax, treasury, and business finance that rely on transactional accounting in their business processes. In addition, the FP&A team desired more granular and robust accounting data to enable predictive forecasting artificial intelligence (AI)/machine learning (ML) models.

It became apparent to controllership leaders that to achieve their vision and justify the investment required, a broader value case was required. The program vision was broadened into an overall Finance Transformation (FT) journey engaging the full office of the chief financial officer (CFO) with the controllership function and CAO as the program champion.

This organization is not alone. In fact, we have observed successful Finance Transformation programs require strong leadership from controllership due to the function’s unique positioning:

• Deep current-state expertise on business processes, data, and systems
• Broad organizational relationships and trust
• Ownership of the accounting, statutory, and regulatory compliance requirements

As such, the controllership function is well positioned to lead the broader organization in crafting a comprehensive FT vision and strategy.

The importance of talent in executing a finance transformation strategy

Talent is one of the most critical components of FT strategy—both in terms of resourcing the transformation and the broader talent strategy for controllership. Success typically requires pulling top talent from their day job to lead transformation full-time. These leaders should be visionary, tech-savvy, and have the credibility to act as evangelists to the broader organization. It’s critical to build a governance model and steering committees into the FT program to support the transformation team.

Some additional key talent considerations in the controllership transformation strategy include: 

• Organizational design: What delivery model and organizational structure best supports the North Star vision? Can improved technology enable centralization (e.g., statutory reporting, AP/AR centers of excellence)?
• Emerging skills: What skills are needed to be developed or added, in particular with how to shift from transactional accounting to analytics, data, automation, and business insights?
• Change management: How do we best engage, communicate, train, and build support for the transformation within the global controllership function?
• Diversity, equity, and inclusion (DEI): How can the transformation be a catalyst to accelerate progress on controllership’s DEI goals?