Finance transformation is very much a case of applying a tested and workable methodology.
Over the years we’ve worked with hundreds of businesses of all sizes with their finance transformation project and as a result, we’ve developed a methodology that works.
In our experience, there are six key steps that any team needs to go through to make sure that they get the best out of their process re-engineering project.
In this post we are expanding on the latest in our Financial Transformation Live series which focused on finance process mapping, to give you some practical steps you can take to re-engineer your processes.
These stages work both at the macro level, in terms of the whole finance transformation programme, but also at the micro-level when managers are looking at a single process and making efficiency gains.
In this article we are looking at the following 6 steps;
- Initiate
- Assess
- Analyse
- Decide
- Pilot
- Implement
Before we jump in, if you would like to watch our latest Financial Transformation Live where we dig into how you can get started in re-engineering your finance processes, you can watch it here.
1 – Initiate
The Initiate step is the bedrock of your project. Think of it as the foundations of a house.
If you have poor foundations then anything else you build on tops is going to be rickety, so getting this right is super-important.
At this point, you want to identify who the stakeholders are, in other words, who needs to be involved in the conversation?
It is important to realise that in many cases, changes you make might impact your staff, the wider business, suppliers and customers so making sure you cover your bases here is key.
Consultation with stakeholders helps you to bring in other perspectives and often stops you from making basic mistakes. It also helps with change resistance as people are much more positive when they feel they have been properly consulted and listened to.
The consultation phase also becomes a selling point, where you can extol the virtues of process re-engineering to the wider business.
Another important task here is setting out the vision and understanding your objectives.
Process improvement works best when everyone involved understands what the group as a whole is trying to achieve and having clear goals stops people from going ‘off-piste’.
At this point, you will set the scope, define the boundaries and ensure that you don’t suffer from scope creep where additional aspects are added to the project as you go along.
Having clear objectives and a defined scope gives you a starting point where you know how bad things are so that you can measure your success.
2 – Assess
The next step is to assess the current state of play.
Map your processes and understand exactly what is going on. Note that this can often be completely different to what we think is going on and that is a really important point. Base your assessment on the pure, unvarnished truth.
Once you understand what processes you have then you will prioritise them.
Prioritise the processes according to;
- Quick wins – what can you do quickly with the least resources. Good for building your process re-engineering credibility.
- The biggest problems – what are the things that people are constantly complaining about, causing blockages or taking the longest to do.
- The biggest prize – what processes offer the biggest positive gains?
3 – Analyse
Step 3 is to analyse the processes individually.
Try asking your stakeholders what they think about the process, you’ll often get a completely different picture from the outside looking in.
Process mapping is a good tool to use here and following it from start to finish, spotting constraints, and matching the process to its intended outcomes gives you a clear sight of where things are going wrong.
This is where you’ll begin to formulate your possible ‘to-be’ version of how the process will look in the future.
Incidentally, this is a great place to start your communications strategy, telling people what you are looking at, in what order, and how they can help.
In March, our Financial Transformation Live session covered how you can get started with mapping out your finance processes, if you would like to watch the session, click here.
4 – Decide
Now comes the time to choose the changes you want to put in place.
You’ve got a priority list, you know what your main aims will be and you’ll have some potential solutions developed during the analyse phase.
So now it is a matter of choosing the systems/software you may need and understanding what changes these will bring.
Of course, process re-engineering isn’t always about wholesale system change. Sometimes it can just be tiny tweaks to make life better or using a single app to speed things up.
Start to formulate a plan here and then go back to your stakeholders and ask for feedback. Often you will find that there will be things you have forgotten or dismissed as not important and your stakeholders can make sure you stay on track.
The value of feedback can’t be overstated in process re-engineering so keep the channels of communication open at all times.
5 – Pilot
Going straight to launch is a bad place to be because you never know if there is something that won’t quite work as intended and inflicting that on the whole organisation would be pretty dire.
Instead, pilot just a small subsection. one department, one product, one channel, etc. that way any negative impacts will be contained.
This also gives you the chance to get people engaged in the project, especially if you are starting with small, quick wins. It also helps you to get your project management skills up to speed and your team working efficiently.
6 – Implement
When the time comes to implement the whole solution we always recommend using an agile approach.
Keep your team flexible, make sure you are constantly communicating and work as a team rather than in silos.
Get buy-in from your stakeholders and keep them inside your tent.
Use soft launches so you have time to iron out issues rather than in the pilot phase.
Also, be prepared to make a series of smaller changes over a period of time rather than going for a big bang approach using each part to build engagement and buy-in.
As part of the implementation phase, make sure you go back and assess the impact and see if any further changes are needed or desirable.
Process re-engineering – plan your work and work your plan
Process re-engineering has a whole host of benefits for your company, your staff, and your customers so it makes a great deal of sense.
But you have to attack it in a methodical manner, planning your work and then caring out incremental change to make things better.
Remember that you don’t have to do all of this at once, in fact, we are big fans of using an incremental, continuous improvement approach.
Using our six steps will help you to work through your processes and get the outcomes you and your business needs.
Want more Financial Transformation resources?
As we said at the start of this article, this is based on our very successful Financial Transformation Live series.
We’ve produced a wide variety of resources to help you understand the topic of finance transformation and how you can make it work for your organisation.
Just visit our Financial Transformation Live hub and you can find videos, blogs and podcasts designed to give you a headstart on your transformation project.
Our live sessions take place on LinkedIn and YouTube, make sure you follow us so you never miss a session!
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