Assessing Your Finance Function

Matt Benaron, Director at VantagePoint, discusses assessing your finance function.

Transcript

Matt:

Hi there. My name's Matt and I'm a director here at VantagePoint. Today we're going to talk about assessing your finance function. First of all, we'll talk about why you might want to assess your finance function and what you might be able to achieve off the back of that. We'll then look at the core pillars of assessment that we recommend and the kind of measures that you can use to assess. It's also good to think about some guiding principles that you use through the assessment. And finally, we'll talk about planning for future change, so how you take what you learn from the assessment and turn it into some tangible outcomes.

So starting with why you might want to assess your finance function. The first opportunity is for you to get a really clear view of your current state. It's really easy to be caught up in BAU and not have that opportunity to take that holistic view of what the entire finance operation is doing and what it looks like. So it can be a real opportunity to take stock of the current state. The first focus can be on decreasing inefficiencies. Those inefficiencies are probably fairly well known and easy to identify, and a quick win can be to tackle some of those before you move on to making further efficiencies. You can also use the review as an opportunity to highlight risks and dependencies and future opportunities for change. One really key objective is to align your finance function with the wider corporate strategy to understand how the finance function is supporting that strategy, but also to look at how the finance function is perceived within the finance team, but also externally to the finance team.

Finally, you also get the opportunity to review technology. Technology is a core part of everything that finance does nowadays. So it's a good chance to take stock of what technology your leveraging. Overall, what you're looking to do is get a clear view of the current state and work towards that future state. And in the middle of the two, you'll be tackling some incremental improvements, but also identifying strategic initiatives that you want to deploy over the next few years.

And we recommend a few core pillars of assessment, and they are process, technology, people and teams, and culture. With process, you can perform core process mapping. So understanding what are the core processes within the finance team, mapping those out, understanding what all of those are and where the bottlenecks within those processes occur. The key process could be the working day timetable and assessing that. And ultimately you'll be looking at where you're already using automation, but where you can further enhance the amount of automation you're using to improve those processes.

Similarly, for technology, technology is enabling those processes. So starting to map out all of the technologies you use, how they relate to one another, what the data flows are and what reconciliations you're performing. Take a look at where there are manual processes and some of those manual processes might be driven by legacy technology and the limitations that that technology brings.

Moving on to people and teams, take a look at the structure, so what the teams are and how they work together and also the dependencies between those teams. You can look at core competency skills that are abundant in those teams and skills that might be lacking that you want to build on as you take the finance function forwards. That could include looking at the leadership and the overall structure of the team, but also think about retention and career planning. So how are you going to retain those skills within your team in the long term?

And linking really closely into that is culture. So thinking about the core values of the organisation and how those core values descend and impact you as a finance team. But then as I mentioned previously, looking at the perception of the finance team within the wider business. So is the finance team seen as a strategic asset to the organisation, or is it seen as a backend accounting function? It's important to also ensure you're staying true to personal values and giving your team the opportunity to have personal values that interweave to the organisation values, and that can be factored into that assessment as well.

So moving into a level a little bit deeper beyond the pillars of assessment, it can be really effective to look at key metrics that you want to use to assess your finance function. Now, here we have some suggested ones and they are just suggested. So take a look at these and tailor them around your organisation, your teams, your structure, your processes, identify a key or way of measuring those. Here, we have an example of none to advanced. And all of this is giving you a central series of metrics that all of your analysis can be tied back to and can be measured against, but also it's a really effective way to report the result of your review to wider stakeholders that might not have actively been involved in the review process but want to understand what you've learned. So think about those metrics and think about a way of measuring against those metrics.

But also think about overall guiding principles. Now, here are some of the principles that embody what we do at Vantage Point, both internally and externally with our clients. And some of these hopefully resonate, but think of your own, too. So, simplify and streamline is a key principle that we apply to everything we do and is a pretty common one to look at. Also being value-focused, so take a look at input versus output. Are the processes, the systems, the what your team are doing day to day, is it driving value and is that value proportionate to the amount being input? Now that leads onto the efficiency is paramount point.

It's also really important to continually learn and challenge and iterate and improve. So even through this review process, you might be conducting, listen to the people in the team and see how you can improve the way in which your auditing the overall finance function through this project. Or through the projects that come off the back of this, think about how lessons learned and incremental iterations can be built into that because we're always looking to improve how we deliver. Think about maximising collaboration, so how teams work together and individuals within those teams work together. And think about becoming a market leader. Now, what that means is not just looking internally to benchmark your performance and quality and what you're aspiring to work towards, but also look externally. Look to similar, but potentially different organisations as well, to better understand what other finance functions are doing and what they look like so you can better benchmark yourself against the market. So do have a think about those guiding principles as you work through your assessment.

And as you get towards the end of the assessment, make sure you're starting to think about change initiatives. So you've learned a lot through the assessment process and you've identified some areas of improvement, also compose how you might address some of those challenges and turn them into improvement opportunities. Some of those might be tactical. Some of those might be more strategic. And this is an example of how you can map those potential change initiatives out to really clearly articulate which ones to tackle now and which ones to tackle in the future.

And finally, put a timeline against those as well. Here's a really basic example of a timeline, but by putting some milestones and some time-bound objectives around the output of your review will make it much more possible to implement, and it will give you the platform to be able to share that vision with the wider organisation and then execute upon it.

Hopefully, you found some of the thoughts in this video somewhat useful. Please do feel free to comment below if you've got any thoughts or additional questions, and also feel free to reach out to us here at Vantage Point if you had any questions or wanted to talk through anything in a little bit more detail.

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