Shareholders, regulatory authorities, supervisory boards and other internal and external stakeholders now expect more from financial departments than simply bookkeeping and preparing financial statements. They also expect them to undertake performance management, decision support and risk management & controlcompliance. And this against a background of progressive digitalisation, globalisation, legalisation and changing business models, all of which makes CFOs' duties more challenging and their environments more complex.

In the context of digital transformation, the goal of finance transformation is to transform the finance function of an organisation from that of traditional bookkeeper to a business partner. The aim is to increase business value. For many organisations, however, the question is: how? And how can we use digitalisation trends such as data analytics to make our finance function more effective?

Vision on finance function

The first step in a finance transformation is to define a vision: what do you want your finance function to achieve? Is the more traditional role of bookkeeper good enough, given the predictability and size of your business in terms of its cost/benefit ratio? Or do you actually see the need to become more of a business partner in order to stay relevant?

If so, you will need to match your finance function to the vision you have defined, by developing its constituent parts – depending on your situation – to the right level.

Management information

Accessible, consistent and real-time data & management information are what distinguish a leading finance function from a basic performer. For basic performers, data gathering is a challenge in itself, let alone finding a consistent way to process the data. Moreover, the available management information tends to have a largely reflective function for basic performers, whereas leading finance functions use it in a more predictive way.

Technology & tools

Systems and tools are key instruments in the digital transformation process. The work environment of traditional finance functions is characterised by a hotchpotch of independent systems that do not communicate with each other. In a leading finance function setting, systems are much more closely integrated. Moreover, repetitive, manual tasks have largely been replaced by robotics. Decision-making processes are based on good, robust, standardised tools rather than loose Excel spreadsheets.

People & organisation

A basic finance function concentrates solely on the traditional role of bookkeeping, whereas a future-proof finance function has much more knowledge of business and of the soft skills that are needed to convince people of its ideas. In such situations, employees are also closer to that business, so that the finance department can communicate its recommendations to the business effectively. From an organisational perspective, the more standardised activities are ideally centred in, for example, a shared service centre.

Processes & internal control

In a basic finance function, each department does its own thing based on a large number of manual tasks. In leading finance functions, departments work seamlessly together from start to finish, with tasks having been automated where possible using systems supporting an automatic workflow and robotics where required. Process mining software is used to identify improvement potential at regular intervals, based on which processes can be streamlined further. Automated internal controls have also been built in and processes are managed on an ongoing basis using continuous control dashboards.

What can BDO do for you?

BDO has created CFO Services to assist CFOs in the financial transformation process . We help finance departments streamline their processes, organisational structure, technology and management information, the ultimate goal being to support your financial function in transitioning into a valued business partner for the organisation and to make you embrace the digital age.

Our specialists would be happy to tell you more about financial transformation in the context of digital transformation. We are ready to provide you with new perspectives on the opportunities that are available within your organisation.
For more information about our specific services in the field of Financial Transformation, please visit this page.

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