Redesigning operating models to unlock ERP benefits

You’ve already done part of this. You’ve decided to implement an ERP solution that will radically change how business is done—standardizing and simplifying processes that can maximize financial insights and growth. To fully align on the vision, understand key opportunity areas, and establish guidelines for future models, you can try some of these activities:

• Surveying key leaders and business stakeholders
• Performing high-level maturity benchmarking
• Hosting vision labs or working sessions
• Evaluating current state and desired future state

Consider how new and changing capabilities may alter how you serve your customers and shift your routes to market. Status quo won’t be enough. Finance organizations have a strategic choice about how to operate in the future. If you don’t align your business model and workforce to your vision, Finance can fall behind. We often see two paths to success:

• Cost efficiency: On this path, Finance leverages emerging technology and automation to operate more efficiently but cedes its seat at the table as the business becomes increasingly comfortable with self-service.
• Value creation: This path transforms Finance into a value-add dynamic capability and creates new ways to partner with the business. With machines and scalable platforms automating much of the traditional finance work to create capacity, leaders can shift the function’s focus to delivering new work outcomes and providing opportunities for finance to strategically advise the business. The new finance technologies may require many professionals to have a new mix of skills, like data analysis and storytelling, to partner with the business and drive value in new ways.

In the changing finance landscape, new service delivery models are emerging as robots and algorithms complement a diverse workforce that includes talent on and off the balance sheet. Many employers are starting to define their workforce in broader terms than full- and part-time employees. It now includes contractors and gig workers, along with service providers like management consultants, business process outsourcers, technology for workforce augmentation (e.g., AI, robots), and developers or accessory providers (e.g., offering apps through an app store). This is a workforce ecosystem: A structure focused on value creation for an organization that consists of complementarities and interdependencies. Implementing a workforce ecosystem requires some changes to leadership practices, including:

• Recognizing all types of workers
• Rethinking diversity, equity, and inclusion
• Maintaining a workforce culture while keeping up with the fluidity of the labor market in terms of employee type and geographic location (e.g., local, remote, international)
• Considering workforce needs in strategic planning

Reframing from the traditional employee-centric approach to a workforce ecosystem approach, particularly one that maintains a workforce culture and gives all employees a sense of value, can drive strategic value for organizations.⁴

Finance organizations have traditionally focused on efficiency. The future of Finance requires an aligned organization design to enable CFOs to harness new technologies (e.g., ERP), manage risk, and create value in an ever-shifting landscape. You’ll first need to consider the nature of work and its value when designing for adaptability and then align your structure appropriately—even if that structure and capabilities sit outside of the Finance organization. This means balancing efficiency and agility. Here are the differences:

Efficiency asks, “Which areas need to remain in functional silos to scale the capability, create capacity, and manage costs?” For example, reporting and cash management capabilities may be best suited to a traditional, hierarchical structure optimized for efficiency.

Agility, on the other hand, asks, “Where is it essential to invest time, effort, and energy to swarm critical issues that require rapid response?” In areas requiring close business partnering and support for strategic decision-making, a dynamic, mission-based team approach will allow you to decide and act more quickly. For example, as you implement a new ERP, you may find you need to redesign your organization around value streams like procure to pay. A team with diverse functional backgrounds and skill sets—in this case, perhaps a team of procurement, supply chain, and finance experts working alongside technology experts—pushing toward a shared goal of generating value will bring together the right insights more quickly than siloed functional teams with limited interaction.

Balancing these dynamics (efficiency and agility) when designing operating models enables:

• Risk management for unstable environments
• Rapid response to dynamic stakeholder needs
• Organizational resilience in times of crisis
• Scalability up and down based on the business environment
• Innovation and value creation
• Delivery of end-to-end services, like procure to pay