Finance and the Elements of Change

The finance organization of the future must be value-based and contribute to the success and goals of business operations. For those tasked with forecasting cash flows, optimizing tax payments, and ensuring effective partner and supplier contracts, these frequently repeated words sound somewhat trite these days.

It seems that everyone agrees that finance must change. However, when it comes to bringing change to finance, there appears to be little agreement as to where to begin.

To me, the opportunity to change finance begins (as it does with so many other business functions) with people, followed by tools and processes. Together, these are the three elements of change in finance.

"People" is the most obvious in the current market because globalization provides access to skilled talent in lower-cost locations. Moving rote jobs offshore also improves the retention of staff because they are engaged in more strategic work.

"Tools" include automation and enterprise software that streamlines finance or accounting.

"Process" changes should simplify how things are done and reduce variability, making each transaction easier to automate and streamline.

Outsourcing and globalization can both be effective catalysts to drive significant change within the organization. However, that change remains dependent on the mind-set of the company's finance professionals. The first change must come from within the organization as people shift from viewing their role as one of managing a process (e.g., accounts receivable) to adding value to business units (e.g., reducing days outstanding on accounts receivables).