How to Successfully Transform Your Finance Processes

financial transformation

By Christoph Makar

Finance transformation represents the combination of processes, systems, and organizational change across a business, implemented through new tools, processes and technologies. 

It encompasses initiatives aimed at transforming the existing finance processes and may consist of implementing new tools and systems, re-organizing accounting and finance organizations, redefining existing finance processes and updating financial capabilities.

In this article, I talk about how I have planned and implemented various finance transformation tools and processes in my extensive career in the Energy sector with an Oil and Gas Major. This article builds on my vast experience and expertise in digital and financial transformation projects. My aim is to educate business and finance leaders that are embarking on digital transformation journeys.

Throughout my 13+ year career, I have embarked on multiple successful digital transformation projects, from implementing a new Cash Flow forecasting tool in 2017, which improved our cash flow forecast accuracy by 35%, to implementing an industry-leading Strategic Workforce Tool for an Oil and Gas major in 2022, which enabled the capture of significant efficiencies (>200M USD). In 2019, I moved to Houston, from Belgium to lead a large-scale Finance Transformation Project for the Corporation where I identified multiple opportunities in digital automation, robotics, and predictive analytics to transform end-to-end financial processes.

Elements of finance transformation

End-to-end planning and implementation of strategy, processes, methodologies, business practices and talent — are key to deliver more streamlined cost-effective results.  Although the effort and scale of work required to execute a successful finance transformation may seem intimidating, it is a step your organization cannot ignore in today’s competitive landscape.

Finance strategy 

Finance transformation strategy helps organizations identify the weaknesses in their finance organization, prioritize the changes that need to be made, and define an operating model to support the business and better manage key finance activities. 

A modern finance strategy must help the organization make the best use of digital technologies, such as cloud software, automation, and data analytics to create a more agile planning and forecasting function and adapt with evolving business demands.

Finance processes

A finance process is a sequential set of tasks that takes a set of data to a finished state; for example, stewardship of earnings, passing that information to managers and finance teams for review, and getting it reviewed by senior management. A financial transformation can help disparate finance-related business processes run in a smooth, coordinated way. Another example is collecting workforce data after a large restructuring, to ensure the new organization is staffed properly and ensure proper cost stewardship. 

In 2022, I was involved in the creation of a new 25.000 people organization. After conducting a gap analysis, we found there were no proper tools to measure and steward the effectiveness of the new organization. That is where I designed a strategic workforce stewardship tool and process to give management insights in the workforce of the new organization and to allow them to match the supply of resources (ie the headcount) with the demand for resources (ie. jobs). This new process and tool was later acknowledged as an industry best in-class process. 

Organizational change, talent and Culture

Finance needs to develop talent with a higher-level of nontraditional technical skills and have teams that can manage the proliferation of automation, AI and robotics. Stronger capabilities are needed that use real-time data and analytical tools for decision making. In my recent European Business Review article, I describe how Culture is a key enabler to successful digital transformation.  I personally have always invested in keeping up to date with the latest technologies. In a recent project, I embarked on a journey to implement a new Robotics Automation tool, designed to measure the workload of a multi-million-dollar project on our base organizations. This created the visibility for senior management which classic project management tools do not provide.

Reinventing the finance operating model

Technological advances and improved data access have redefined what is possible for finance functions. Wide-ranging data has made it easier to connect and measure performance across the business. The goal should not be to automate for sake of efficiency, but also to revisit services that finance offers and how it can add bottom line value to the business.

Creating a roadmap for successful finance transformation

Organizations should create finance transformation roadmaps through a set of actions and activities and achieving outcomes in a planned sequence. Firstly, document the current state of your function or process that you want to address. This includes process analysis, technology analysis, and the present state of your resources: competencies and capacity. 

The next step is to envision where you want your finance department to be in 5–10 years. 

Conducting a gap analysis of your current state versus the desired state will allow you to create a plan to close the gap through clear goals, objectives, and desired outcomes, considering internal and external factors. 

Evaluate alternate approaches and assess the options. Select the path your project team recommends. Typically, the transformation roadmap is comprised of high-level work streams and phases so that incremental delivery is possible.

Benefits of finance transformation

A successful finance transformation will positively impact your business on a day-to-day basis. It can lower costs, speed up business processes, increase efficiency, reduce errors and offer easier-to-use data and reporting.

Reduce costs

Automation and streamlining of processes can help ensure cost-saving opportunities across organizations. It also allows for opportunities to conduct business remotely, meaning potentially lower wages and better payroll planning. In 2022, I created a new tool that allowed management to optimize their existing reporting structures and optimize team size. Prior to this new tool, management had no visibility in their organizations’ structure.  This new tool allowed for strategic workforce planning and ultimately led to over 200M USD of cost savings.  

In 2019, I created a Vendor Analysis tool that allowed the company to compare vendor prices across plants and sites. The tool used the latest Business Intelligence software, and connected vendor prices from ERP Platforms and linked it with financial data. This directly contributed to 10M USD savings per year by finding the cheapest vendor for specific additives or materials. The key enabler behind this successful implementation was the understanding of the systems landscape. After a proper pilot, the tool was launched globally.

Faster business processes

Finance transformation includes improving efficiency and speed in existing processes, to ensure they are aligned and running on the appropriate technology platforms.

Error reduction

By automating and standardizing finance processes and systems, organizations can avoid errors and increase efficiency. 

Increased productivity and efficiency 

Financial transformation processes and tools, if well planned and implemented, will ultimately lead to increased collaboration across teams and will offers opportunities to operate remotely. This combined with improved processes can increase productivity and efficiency even further.

About the Author

Christoph Makar Christoph Makar is a digital thought leader and expert at a large Oil and Gas multinational. He has over 13 years of experience in digital and business transformation and has been successfully driving digital transformation. His digital transformations have brought significant improvement in bottom line for his organization. He is specialized in developing and implementing digital and automation-focused transformative procedures and tools focused on finance and administrative functions. Christoph is regarded as a global digital transformation authority, as recognized by thinkers360.