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Guest Post: What is Finance Transformation?
by Diane Davidson

Transformation is the new business buzzword that is being used in the market lately. Some would say that purchasing new software or tool is the first step in a finance transformation program. To illustrate this point, a client had a very manual, labor-intensive commissions process. I met with the team leads to gather requirements and their first requirement was to buy a new commissions tool.  The purchase of a new product is a step in the transformation process but should not be the first step. This is fondly known as the “shiny penny syndrome” or when a company chases a new “shiny” opportunity or tool instead of focusing on the core business practices.

What is driving this desire for transformation and specifically as it applies to Finance?  There is the sentiment to do more with the same or fewer resources. This mindset is also applicable to the finance department as mangers are being asked to respond to the ever-changing economy.  Finance managers are being asked to act as future-looking business partners versus the historical point-in-time reporter. To achieve “financial transformation” one must be comfortable with changing the people, process and/or technology of the business.

Three of the most common finance transformational projects that businesses are undertaking are:

  1. Standardization of business processes that do not offer a competitive advantage
  2. Business systems efficiencies through ERP implementations and/or system integrations
  3. Centralized reporting that focuses on future state activities/outcomes versus past performance

Many will state that the order does not matter but I have seen many projects fail due to too many unique business practices across the organization.  When an organization undertakes the task of standardizing its business practices this builds a strong foundation for future transformation projects. So many times, an organization jumps immediately to buying an expensive ERP or another tool/system that promises efficiency and reduction in data issues.

After a few more conversations with the client seeking the commissions software tool and documenting their current state process, I realized that the process had changed four times in the past two years. In addition to the historical change, the organization was evaluating whether to change the commissions’ process again.  We looked at the current process and realized that the best approach was to change some of the current reports and hold on purchasing a new system until the commissions’ process was formalized by the business. Although not a glamorous solution, the focus on the standardization of the commission process saved the business from purchasing a tool that might not support the future state vision. Businesses need to avoid the “shiny penny syndrome” and focus on the core activities that make up the business.

 Coming in 2020 –  Business System Efficiencies 


I occasionally ask people I work closely with to write guest posts. Diane and I worked together at a client during 2019.  I have a huge amount of respect for her knowledge and ability to make stuff happen. I am glad Diane decided to share a view of business transformation and business agility. 

Diane’s bio and contact information.

Clever Fox Advisory was founded by Diane Davidson. She is a results-oriented business professional with over ten years of experience working as a liaison between IT and the business to solve complex problems. She is focused on bridging the gap between execution and strategy primarily by designing and implementing current and future state process models. She has expertise in developing repeatable approaches and frameworks that align with enterprise and IT goals. As a previous Big 4 consultant traveling around the world, she found her final destination point of Chicago, Illinois. 

Contact Information: 

Web: https://cleverfoxadvisory.com/

Email: Diane@cleverfoxadvisory.com 

LinkedIn: https://www.linkedin.com/in/diane-davidson-75a73414/