We are often asked by Business people what Finance Leaders can contribute to support and generate value for the business. We tell them that finance can provided unimaginable values to the Business, starting from two baseline areas: sustainability and compliance sectors.
It is our story.
Taking Ownership over Finance Process Automation for Successful Implementation
We start by using our favorite model: Denison Culture Model to explain why. Cut the story short as you can google it anyway, sustainability is the strongest area for finance people. If Country Manager/ CEO sets the vision, mission and direction to go; Commercial & Operation team ensures the adaptability & flexibility our product & services to respond the market; People & Culture team is a think-tank how their employee can be more engaged – feel pride & proud, then Finance sets infrastructure, i.e. process, procedures and system landscapes across business processes and link between one process to another process in the entire organization.
Especially in the era digitization and digitalization we live today while technology, both approaches and tools, now has been constantly added; there is always a choice to make whether we want to adopt new technology to bring business from where we are today to where we wanna be. The question is how & where to start and how to implement including method to apply.
We start with “How do we define the success criteria for successful implementation?” The definition of success from our point of view consisted of 4 (3 + 1) criteria as follow:
- New technology always ties to business strategy either existing and distant future strategy (+1 year max +2 year from today). What ever we do shall be based on how to make our organization; at least to be at the same speed with competition in the market, or bit ambitious aiming in excelling it.
- New technology shall significantly improve our core business processes. We do not automate the inefficient processes without simplifying and fixing it. We do not automate the processes that bring us nowhere by moving the old process to new technology.
- New technology shall bring PEOPLE grow and become more effective in what they do.
- The implementation of new technology shall not create business interruption and shall always have Plan B. We need to have clear project plan to understand every milestones with its definition of success measurement; clear definition roles and responsibilities: who doing what, why and how to do; and clear governance structure as communication is the key at the end. So the implementation shall be closed per agreed timeline and resources.
Putting ourselves from view of organization as Business Process Owner together with CIO as IT expert, we begin by looking holistically and understanding the relation between one process to another process. Think how we can improve our business processes for the benefit of our customers and strengthen our company position in the market. What is the technology that can bring us there. There is always choice to make amongst quality, speed and cost.
If we aim for high quality and high speed, there is investment cost need to bear. We need to ensure the investment cost can be paid off at the long run with saving from productivity increase. Defragmenting financial processes only can be done with purpose looking out which process can be improved further by new technology within time frame and available resources. We can not get it all at the same time.
Having finance DNA, we battle waste and hidden cost that lies in organization and system; the two pillars that solidify capability of every processes. The process automation can make control process becoming more effective & improve the span of control.
From organization standpoint, process automation from new technology always involve a new way of conducting business:
- Focusing the organization on looking outward;
- Collaborating across organization silos;
- Exciting process that deliver end products & services for our customers.
From system architecture, with new technology we target system architecture to achieve full business potential. It become greater need today to have ONE single version of truth from sources and eliminate redundancies. Redundancies are truly hidden cost that giving direct consequences to low span of control of organization, ineffective processes and high bureaucracy. It also made process owners kept their information leading dysfunctional team. The worst case it nurtures toxic organization culture across organization layers.
Before inspiring our people to understand a new technology, we start to believe it ourselves by viewing from organization standpoint. People is always sceptic for something they do not understand and fear or resistance to change is very normal. Therefore, we gradually embrace people to change their mindset from sceptic to open mind by repeating that the main purpose of adopting new technology is to bring greater good and benefit to entire organization.
For finance people, finance process automation would bring them getting closer to the business by more understanding the fundamentals and getting their hand dirties in commercial & operational duties. Finance people can provide more effective financial support in driving forward the business through finance advisory, forward looking feedback, continuous process improvement and improve pricing & cost structure.
At the end, the real key successful implementation is only reached when the main purpose is met, i.e. to bring greater good and benefit to entire organization & our customers.
Caretaker between Digitalization vs Regulation
Digitalization drives fundamental changes. It affects not only the process and system landscapes, but also organization structures. It makes sustainability becomes increasingly important for many companies because its affects cost of capital and brand value. For senior leadership team, sustainable management is always mean to secure their company’s future in continuing volatile times. Since the pressure from both employees and capital market for sustainable entrepreneurial actions will continue to rise, we expect that this issue will become an even greater priority for government to be more involved in this area by deciding regulations that drive us to improve our efficiency and productivity with digitalization transformation.
Data Protection is opportunity for Finance Leader to actively protect sustainable profitable growth for organization.
Taking example of the famous GDPR that launched 2 years ago in Europe which gave pervasive impact not only in Europe but also all companies around the world. We still remember massive and long check list were needed to be done in order to comply with GDPR requirements. (Note: For your information, GDPR only applies for companies/ organization who are doing business with European companies, or having European employees. It is all about the personal data and how it flows and being used in the organization).
Internal processes, policies and systems needed to be rigorously reviewed and tested because any shortcoming would not only be exposed by the regulators, but also to our customers and our own employees impacting our reputation. We completely understand that failing to comply with GDPR requirements not only leads to substantial fines (Note: 20 million Euro or 4% of Global Revenue whichever is higher), but also leads in heavy reputation damage that pushing us back way behind competition.
This is one of the recent compliance areas where Finance can contribute best in preventing significant value deterioration for the business. We can lead organization to focus on being efficient in how handling data protection. In the next step, we bring “the privacy by design” culture to the organization strengthening our good and positive image to our Business Partners & Stakeholders as Trusted Company, by ensuring 4 crucial areas:
- Do our employees understand the implications of data protection?
- Do we have adopted the right process in place for safeguarding personal data i.e. responding to request for data such as employee data and individual customer data?
- How do we define a range of policies to make sure our external contracts meet with data protection requirements?
- Do we understand where we hold all personal data and how it flows around organization?
We are passionate to do this because sustainability is becoming increasingly important now as they affect our cost of capital and brand value. Failing to comply with GDPR requirements will have direct consequences to our reputation damage and cost us substantial fines. Therefore, it is our job to prepare business complying with GDPR requirement and strengthening its base to make our business successful despite GDPR.
Those are only two examples on how we contribute to support and generate value to the business.
A Finance Leader is expected to be on top of those two minimum baseline sectors. We should take also operational responsibilities with a focus on financial result, partial of COO, that contribute unimaginable values to the business.