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Five Reasons Why Your Finance Transformation Failed

You focused too much on finance costs and satisfying internal customers, thought of it as a finite project and relied too heavily on consultants.

5. Thinking you can’t execute a transformation on your own.
CEB is careful not to call itself a consulting firm, and Raiswell is not short on dismissive commentary about consultants. Here is the difference between a consultant and an adviser, in his view: “You decide you need a new accounts payable process. A consultant says here, we have one, it’s in this box, and to implement it 10 of our best people will unwrap the box, roll it out and after 12 months we’ll leave and you’ll have the best AP process there is.”

What CEB does, he says, is help you learn how to do the work yourself. “You sit down with one of our advisers, put your data into our system and we’ll tell you if your accounts payable system is in fact broken. If it is, we’ll show you the top two or three accounts payable processes used by other companies. Then we’ll advise you how to put together a project team. We can help train and guide that team, but what we won’t do is put bodies in your office for months.”

Under CEB’s business model, its members pay an annual subscription fee to get access to the firm’s ongoing best-practice research, benchmarking database and advisory services. The cost of all that is spread out among CEB’s thousands of clients. “It’s a more cost-conscious model,” Raiswell opines.

A Picture of Success
After considering all those common mistakes, it might be difficult to picture a fully successful finance transformation. But CEB says it has identified some trends about what works, as well as what doesn’t, as shown in the table below.

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6 thoughts on “Five Reasons Why Your Finance Transformation Failed

    • I agree this is a very insightful article. I would like to offer a few comments for consideration.

      1) Whether it is finance initiatives, system implementations, or other major process improvement efforts, it seems like there are always big gaps on average between what is promised and what is realized. This is hardly a new phenomenon. I wonder if there has been any improvement on average over time or if we keep repeating the same mistakes?

      2) For many organizations sustaining an effort over the long haul is very difficult due to turnover in personnel, project fatigue, and changes in the business and management priorities. In my former role in internal auditing I served as an adviser and found in many cases if you didn’t get something in phase 1 you never got it.

      3) Any time I read articles of this type it reminds me of a quote from Machiavelli:
      “And let it be noted that there is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to set up as a leader in the introduction of changes. For he who innovates will have for his enemies all those who are well off under the existing order of things, and only the lukewarm supporters in those who might be better off under the new. This lukewarm temper arises partly from the fear of adversaries who have the laws on their side and partly from the incredulity of mankind, who will never admit the merit of anything new, until they have seen it proved by the event.”

      • Steven, excellent question, “Whether it is finance initiatives, system implementations, or other major process improvement efforts, it seems like there are always big gaps on average between what is promised and what is realized. This is hardly a new phenomenon. I wonder if there has been any improvement on average over time or if we keep repeating the same mistakes?”

        In a recent survey of 172 companies by Panorama, only about half (49%) of respondents said their IT systems delivered less than half of the projected benefits, and more than 1 in 3 (34%) said costs exceeded budget by at least 26%.

        Many Organizations typically don’t review and modify business processes to best align with core system functionality of their IT system. They end up putting good technology over bad process. Others engage in process improvement initiatives without first looking at the interaction between people, process, systems and IT, which is constantly changing in most organizations.

        Within many organizations, human capital is woefully underutilized. By empowering and engaging employees effectively before, during and after a transformation project is initiated, leadership can capitalize on more opportunities to innovate and drive performance improvements.

        The challenge for leadership is to design and implement a framework that effectively empowers and engages employees at every level of the organization before, during and after the organizational transformation.

        Such a framework might look like:

        1) Effective policy management (online policy library)
        2) Ongoing assessments (people, process, systems & technology)
        3) Performance Scorecards (hard & soft metrics)
        4) Event management and reporting (utilizing Failure Modes and Effects Analysis)
        5) Annual certifications to the Code of Conduct (reinforce core values)
        6) Enterprise data analytics (talent & workforce analytics, performance-based job descriptions)

  1. 12.02.2014

    David is right – “Finance is the forerunner of any organization, irrespective of its size. Finance drives the business plan forward and steers the organization towards its mission”.

  2. There are so many complex projects in the world which does not fail or if they fail there are very remote chances like rockets, airlines etc.

    Why this happens in the Business Transformation projects? Is that we don’t give the due diligence to the project, or is that the demands are more impractical, or we don’t hire the talented people for the projects..???

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