“You really need representation from, and leadership from, all areas of the organization.”
Focus on cash:
While a transformation office should be structurally independent, it also needs to be pragmatic. “Your transformation needs to have a focus on cash, with the ability to understand your sources and uses at any given time — and the volatility of them,” Hennessey said. The finance function plays a critical role in helping the office balance this focus, and possible opportunities to reduce expenses, against the proactive perspective of continuous improvement and ROI.
The finance function brings important value to the transformation office, but so do many other areas. “You really need representation from, and leadership from, all areas of the organization,” White said. “Then, you can get economies of scale in terms of the technologies you are using, or cross-functional processes that are enablers of the data.”
Balance experience and innovation:
Apart from a range of functions, the office should represent a range of experience as well. The finance function needs to be represented by a mix of experienced knowledge and fresh ideas. “You need a good mix of legacy personnel and new blood,” Hennessey said. “I think the structure and the composition are both equally imperative. For experience, you need someone who has experienced most aspects of the finance function — somebody that might have both an FP&A and a controllership background.” New ideas are essential, while it is also important to use and protect institutional knowledge.
Focus on succession:
Modernization needs to call upon institutional knowledge, and it’s important to plan the retention or transition of that knowledge when needed. “Succession planning within finance has become essential,” Hennessey said. “The ability to absorb, or at least steady the ship during, transition is key. And that’s not an HR task. That’s a finance task, because it’s about the skills, training and development.” For finance and other transformation functions, succession planning means disseminating knowledge, clarifying and codifying processes, documenting rationales, and including junior team members in key conversations.
Ultimately, look for improved internal experience. On a day-to-day level, finance modernization should make life easier for the teams that use your systems and services. Are you reducing frustration? Are you minimizing or eliminating low-value tasks?
The right people with the right tools
“It comes down to three things: Put the right people in the right spots to succeed, give them the right tools, and then get out of the way,” Hennessey said. Modernization should look at the work to be done, rather than the roles to be filled. Then, it should look at how it can reduce that work for business value and ROI.
“What a transformation office would do is create capacity and create bandwidth,” Hennessey said. “That can be through processes or through tech. What the company chooses to do with that capacity and bandwidth is up to them.”