The CFO’s Roadmap

To Finance Transformation
The CFO’s Roadmap to Finance Transformation

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 Intro

Have you always had the feeling that your finance function was destined In our CFO’s Roadmap to Finance Transformation, we’re going to show you
for greatness? That all it needed was a few things to fall into place for it to how to reach those brave new heights, taking a deep dive into the insights
become a strategic powerhouse? Well, you’re not alone. In fact, finance and actions you’ll need to transform your finance function into a data-driven
should be a prescient, flexible dynamo that navigates your organization marvel, including:
through even the most complex environments.
• The biggest challenges to overcome
• Identifying bottlenecks and pain points in operations
But until recently, all of that potential was stuck in theoretical mode. CFOs
• Creating a business case
could see where they wanted finance to go, but didn’t have the tools to get
• Essential building blocks you’ll need
there. That is, until technology decided to quicken its stride. Now, finance
• Leveraging expertise and experience
leaders can free their teams from those tethered, traditional roots and let
them grasp that soaring, soothsaying potential that’s been lying dormant.
As you’ll see, this roadmap is a step-by-step, boots-on-the-ground manual
that isn’t afraid to roll up its sleeves and show you how it’s done. So on that
note, let’s stop dilly-dallying and get started.
And that, in a nutshell, is what a finance
transformation is all about – the convergence
The CFO’s Roadmap to Finance Transformation

of people, processes, and technology that

propels your enterprise forward.

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 The Biggest Transformation Challenges to Overcome

1 The Biggest Transformation Challenges

to Overcome

Would you start a road trip into uncharted territory without first making sure
your car is up to the challenge? Oil, coolant, brake fluid, a decent spare tire
– a little preparation goes a long way in ensuring you don’t end up stranded
in the middle of nowhere with lousy cell reception and a 50-mile trek to
civilization.
That same premise rings true for any initiative you undertake in your
enterprise, a finance transformation included. Identifying the possible
hazards ahead of you can dramatically improve your chances for success.
And when it comes to your finance function’s transformational road trip,
there are three potential potholes that, if not accounted for, can quickly
derail even the best of intentions.
The CFO’s Roadmap to Finance Transformation
One of the biggest challenges in an effective transformation is simply
making sure that your team understands what a finance transformation is
and how it’s meant to be part of an enterprise-wide initiative already taking
place. To paraphrase ourselves, a finance transformation involves:
• The finance function building on its traditional roots to incorporate
more strategic thinking and planning, making it the central figure in
an organization’s strategic initiatives
• Integrating technology like advanced analytics to give leadership
more precise, far-reaching insights
• A heightened sense of agility & adaptability to meet the demands of

a fluid, dynamic marketplace

Defining Finance Transformation
• CFOs becoming key figures in all strategic matters, creating new
value through innovation in thought, tools, and practice
Finance transformation is one of the buzziest of buzzwords in recent years.
That’s a clear sign that the concept has traction and is somewhere toward
the top of the collective corporate zeitgeist. However, especially for the
uninitiated, buzzwords can easily obscure the underlying message and
meaning.

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 The Biggest Transformation Challenges to Overcome

Ultimately, a transformed finance department Getting Leadership to Buy-In

is optimized to be as fast, efficient, accurate,
and cost-effective as possible to provide Building on the previous point, it’s not enough to simply define and explain
what a transformation initiative is. Any form of change management relies
maximum value to the organization. on support, communication, and buy-in from leadership. And to get that
critical buy-in, you need to explain the steps needed to reach your objective
and drive change. Because without all of those things in place, you’re far
But as good as that sounds, before you dive into the transformational
less likely to have the support required to advance any transformation.
pool, you need to level set with your C-suite and stakeholders. That
process will include defining the purpose of a finance transformation as
To that point, a CFO can create an oversight or steering committee
well as the parameters and goals involved with it. And while the definition
composed of different department heads and key leaders. That group
of a transformation doesn’t change from company to company, those
should function under the governance board, which steers the broader
parameters and goals certainly do.
organizational change across the enterprise. So while the board minds
the bigger picture, the steering committee manages the process and
The CFO is the central figure in this process, defining what a transformation
progress of change within the finance function. That democratized sense
is for the organization, and then conveying that definition to other
The CFO’s Roadmap to Finance Transformation

of ownership over the change management is critical in establishing both

executives. Naturally, this means that a CFO must understand the concepts
understanding and buy-in across the organization.
behind a finance transformation. With that understanding in his or her
pocket, leadership can then determine what parts of the enterprise-wide
initiative are specific to finance.

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 The Biggest Transformation Challenges to Overcome

Spotting Detours and Roadblocks 2 Identify Bottlenecks and Pain Points in

Operations
Once again, you need to know the lay of the land before you even start
your transformation’s heavy lifting. After all, if you don’t understand where
Since it’s still fresh in our minds, let’s build on those insights concerning
your finance function struggles, how are you going to determine which
potential roadblocks provided by your team. We want to expand on
people, processes, and tools you’ll need to be successful?
those conversations to focus on the bottlenecks and pain points in your
operations that can immediately benefit from a transformation.
There’s no better way to spot those potential detours and roadblocks
than to ask your team for their insights. Once you have the perspectives
Of course, those bottlenecks and pain points can vary from company to
of the project managers and subject matter experts actually performing
company, as will critical transformation drivers. But, to distill the process
the granular tasks in your finance function, you’ll have a far better
to its essence, you know what your current state is, have an idea of which
understanding of your strengths and weaknesses. This will be instrumental
weaknesses to address, and know that you’re trying to get from point A to
in helping you develop a comprehensive list of everything that your
point B.
streamlined finance function should ultimately address which, not
coincidentally, is next on our to-do list.
The CFO’s Roadmap to Finance Transformation

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 Identify Bottlenecks and Pain Points in Operations

So let’s zoom in on those pesky weaknesses and really flesh them

out. Generally speaking, the functions and processes most in need of
transformation tend to fall into distinct categories:

Workforce: Your employees’ skill sets don’t align with their roles.
This can increase errors that cost money and time, resources that
finance could otherwise devote to strategy and decision-maker
support.
Leadership and stakeholders: Finance is slow and cumbersome,
unable to give leadership timely and accurate insights for their decision-
making process. Likewise, your investors, bankers, auditors, and others
lose patience, possibly impacting your debt covenants, funding, and
other key areas.

Processes and reports: Your various accounting and finance

Compliance and risk: Financial models cannot adequately account for
processes are misaligned, creating a disjointed flow of information that
risk, increasing possible compliance, audit, and operational issues while
makes your chart of accounts, financial close, and reporting look like a
impeding your ability to compete effectively.
jumbled mess.
The CFO’s Roadmap to Finance Transformation

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 Identify Bottlenecks and Pain Points in Operations

To help you expand on that introspection, we recommend asking yourself a
series of follow-up questions:
• What goals and deliverables do I want to accomplish with this
transformation? Document your current state and envision your
ideal future state to reveal what this transformative process should
ultimately become.
• What path is best to reach that future state? You can either bring
in consultants well-versed in organizational transformations or
appoint in-house project teams to evaluate every component of the
process.
Once you’ve answered those questions, you can drill down further
into the issues if need be, depending on how far along you are in your
transformative efforts. Two exercises – activity analysis and gap analysis –
are especially useful at this stage.
• Activity analysis: Typically a survey-based exercise that allows
managers and executives to better understand the difference
between what they think their teams are doing, and what their
teams are actually doing. It’s more procedural in nature to expose
bottlenecks in process efficiency, and is critical to redesign and
optimize those processes.

• Gap analysis: Primarily concerned with identifying the gaps

between your current state and desired future states, focusing
on ways that technology can bridge those gaps.
The CFO’s Roadmap to Finance Transformation

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 Identify Bottlenecks and Pain Points in Operations

As a slight aside, you’ll probably end up with a pretty lengthy list of areas Hit Pause and Assess Where You Are
to focus on with your transformation. Rather than beginning with a massive
undertaking, it’s often best to concentrate initially on the low-hanging fruit.
So let’s hit the pause button for a moment and assess where you are in
That way, you’re able to get some quick wins under your belt that will
the overall transformational process. At this point, you know that your
provide much-needed momentum that can carry you through the rest of the
change initiative should start with an understanding of your enterprise’s
journey. If people see immediate results – both your team and leadership
key goals. It helps to categorize those goals for the short, mid, and long-
– then you’re creating excitement around the project and, to continue a
term, also identifying how finance can support the broader goals across the
theme, maintaining essential buy-in.
organization itself.

Therefore, a CFO should be a key leader in the overall strategic planning

process, effectively becoming the CEO’s eyes and ears for your company’s
transformation initiative. However, that obviously doesn’t mean that a
CFO should be completely autonomous in the process. While change
It helps to categorize those goals management absolutely needs a designated leader, it also relies on
effective governance – including buy-in from the steering committee at the
for the short, mid, and long-term, C-suite level – as well as active participation from project managers and
The CFO’s Roadmap to Finance Transformation

also identifying how finance can subject matter experts.

support the broader goals across
the organization itself.

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 Your Essential Building Blocks: People, Processes & Technology

Collectively, this deliberate and organized approach to your transformation
ensures a variety of inputs and perspectives. Maintaining this hierarchy is
essential in avoiding a too-many-cooks-in-the-kitchen scenario that can
muddle the sense of direction and undermine productivity.
Also, as you progress, make sure to communicate across the key
stakeholders in your organization to ensure everyone is on the same page
and aware of your progress. Trust us when we say that halfway through your
transformation project isn’t the time to have critical buy-in start to erode. End
pause.
Like any business case, be sure to include both qualitative and quantitative
considerations, particularly a cost-benefit ROI calculation. This should
align with your organization’s objectives, clearly indicating the benefits
of the finance transformation project. Likewise, you should perform the
cost-benefit analysis in-step with your short and long-term planning and
budgeting cycles for your enterprise.
Lastly, you’ll want to conclude your business case with a specific
recommendation on how to proceed with your transformation. To revisit a
previous point, clearly spell out how you’ll get from your current state, point
A, to your desired future state, point B.

3 Make Your (Business) Case

Now that we really have a head of steam going, it’s time to put the rubber
The CFO’s Roadmap to Finance Transformation

to the road. Use all of the work you’ve put in so far to build a business case
that supports your proposition to leadership. Your business case should
clearly summarize the project at hand, analyze and evaluate the different
options available to you, and demonstrate how you intend to implement
your preferred strategy.

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 Your Essential Building Blocks: People, Processes & Technology
4 Your Essential Building Blocks: People,
Processes & Technology
At this point, it’s really just a matter of putting the essential building blocks
in place and proceeding. From here on out, you’ll rely on three separate
but equally vital aspects of your operations – your people, processes, and
technology, in that order.
People
We already discussed how important it is to have buy-in from the right
people in your organization. Once you have that buy-in, your overarching
goal is to ensure that you have the right capabilities to complete your
tasks within the department. This requires you to adequately develop
and maintain the requisite training so that your people can fulfill their
The CFO’s Roadmap to Finance Transformation
tasks, particularly the new processes and technologies driving your
transformation.
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However, that doesn’t necessarily mean that you must have qualified in-
house people for each and every task and role. Remember, a transformed
finance function is flexible, efficient, and cost-effective so, more than likely, a
combination of in-house talent and outside partners and consultants will be
the efficiency sweet spot. As you formulate the ideal combination for your
needs, it will help to keep a few considerations in mind:
• When evaluating the talent within your finance department, how well
are their skills matched to tomorrow’s expectations of finance?
• How does a massive change event like COVID-19 impact your
workforce of the future? Will working virtually/remotely become part
of your norm?
• How well does your department structure leverage and utilize the
right resources at the right levels?
• Is there an appropriate succession plan in place? Have you tested it
with furloughs and layoffs from COVID-19?
• Do you anticipate having temporary staffing needs for any future
process improvements or systems implementations? Also, although
admittedly circular logic, what about gaps in knowledge and
skillsets stemming from staff departures after your automation
improvements?
 Your Essential Building Blocks: People, Processes & Technology

The Impact on Your Workforce

The last consideration on that list brings up an extremely important point.
One of the biggest worries in transforming finance, or any major function
within an organization, is the impact it will have on the workforce. At first
glance, it might seem like automation technologies will increasingly displace
employees. But while a truly transformed finance function does, in fact,
replace human action with technology, a more accurate description is a
shifting of human workers rather than a replacement.
Similarly, a workforce that shifts away from manual processes and
repetitive, time-consuming responsibilities has the freedom to engage in
strategic thought that wasn’t possible before. Enterprises that embrace
transformation are more likely to attract talent that wants to challenge
themselves through such strategic and innovative thinking. Put another
way, the transformation process is self-perpetuating, building on itself by
continually combining extraordinary technology with extraordinary talent.

If hyperbolic tales of sentient robots and technology-run-amok have

taught us anything, it’s that human supervision will always be an essential
component of innovation. Humans provide critical guidelines and
boundaries to our digital counterparts, ensuring they remain on course,
accurate, and reliable. Within an enterprise, a truly transformed finance
function occurs at the intersection of human capital and technology, where
The CFO’s Roadmap to Finance Transformation

one drives the other to reach its full potential.

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 Your Essential Building Blocks: People, Processes & Technology

Processes

Without the proper processes in place, adding new technology just • Is turnover creating a significant strain on the ability to execute on
complicates an already complex environment. Technology requires protocol processes?
and structure, a framework that clear, well-documented processes can
• Is there a small group of individuals that are familiar with processes
provide. Your goal when refining your processes should focus on improved
end-to-end that seem irreplaceable because of that experience and
accuracy and timeliness, allowing you to pivot and adapt when business
knowledge?
changes arise. As before, there are specific considerations to keep in mind
concerning processes in your finance function:

• How effective, timely, and accurate are your current processes

in meeting the key business objectives of stakeholders and SOX
compliance? What are the major pain points? Your goal when refining your
• What processes are the most costly and would have the biggest ROI
processes should focus on improved
in terms of improvement? accuracy and timeliness, allowing
The CFO’s Roadmap to Finance Transformation

• In general, how manual are your processes and, in light of COVID-19,

you to pivot and adapt when
is there an urgency to automate processes as much as possible? business changes arise.
• How well are your processes documented, including desktop
procedures and policies?

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 Leverage Genuine Expertise & Experience

Technology

Innovative tools are faster, more reliable, and typically more cost-efficient
than their human counterparts, but can only reach their potential when the
people and processes are already in place. When creating objectives for
the technology component of your transformation, concentrate on the cost
savings aspect of the tools, in terms of both labor costs and more efficient
processes. Once again, start this exercise by addressing the following
considerations first:
• What systems have outdated technology or high maintenance costs
that are becoming outdated?
• Is there a strategy on your selection of software vendors regarding
centralization or decentralization, or increasing APIs across systems?
• How does your finance department’s technology fit within the rest of
your organization, like your ERP, for example?

• What are your company’s priorities when investing in systems, • What is your company’s strategy on utilizing cloud technology, both
specifically in regard to the finance department as a back-office software and hardware?
function?

• How reliant is your finance department on your systems?

The CFO’s Roadmap to Finance Transformation

• What processes are manual and would provide significant value if

automated? In other words, automating which manual processes
would improve the timeliness and accuracy of information while
potentially reducing costs?

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 5 Leverage Genuine Expertise & Experience
As enormous as the impact of automated technologies is for the finance
function, an enterprise will only realize the full benefits of transformation
when it’s ingrained into the culture. Freeing your workforce to collaborate
and innovate will only maximize a transformation’s value when your
employees are engaged enough to want to collaborate and innovate in the
first place.
Aside from the people, processes, and technological aspects of a
transformed finance function, Embark’s insights can also help ensure you
have the organizational framework to see a transformation succeed. While
it’s on you to seek and achieve that ever-important buy-in from leadership,
Embark provides hands-on experience in transforming enterprises to serve
as a powerful guide throughout your journey. A roadmap, if you will. But isn’t
The CFO’s Roadmap to Finance Transformation
that what a transformation partner is supposed to provide in the first place?
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Like we mentioned during the planning phase of your financial
transformation, you must be able to understand what expertise you’re
lacking to successfully complete these tasks, and determine where and
when to rely on key external providers. And that’s what makes Embark such
a valuable partner for your change initiative, able to inject our expertise in
several different ways during your transformation:
• Planning and assisting with business plan creation and ROI
calculations
• Staff augmentation to fill critical gaps in knowledge and skillsets
• System implementations
• Process improvement and optimization of controls
See what we mean? Between this roadmap and Embark’s experience, your
finance function will be that prescient and flexible strategic powerhouse in
no time, driving your entire enterprise toward a brighter, more successful
future. So drop us a line and let’s get to work.
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The CFO’s Roadmap to Finance Transformation

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