Finance Organisation Design
Welcome to our new Subscribers and I hope you are enjoying your week. Today I want to talk about Organisation Design in Finance. My thoughts are equally applicable to other Business Functions or indeed business wide if you are considering a Multi Functional Shared Services Centre. Clients sometimes leave this critical stage until their Program is close to Go Live. If that sounds like you then pay particular attention to my 3 Principles within.
When new Clients approach me with their challenges I do have to introduce myself and I do wish I could find a new way to do it. Started as an Accountant at Whitbread, morphed into a Project Manager at Argos, became a Consultant with Deloitte, Consulting Practice Leader at Logica and have inhabited the shark infested waters of Interim Consulting since 2012.
My Clients range from £150m to £4bn turnover, they have used SAP, Oracle, Microsoft and all variations past and present thereof. They have 50 people in Finance or they have 1,500 worldwide...but the approach to Organisation Design is the same, always. Don't believe me?
Since Covid I have managed Shared Services (GBS) feasibility studies into 3 companies all at once, because...my approach is the same. All that varies is the volumes. Over the course of my career I have challenged or given comfort to no less than 12 ERP selections and I have redesigned Finance teams across multiple sectors. The approach is always the same all that varies is the flight destination and quality of the hotel.
For the record I encourage no UK centric Client to create a Finance SSC if they possess less than 80 staff in Finance. Anyone who approaches me who has only 50 I tell them nicely they are wasting their time and we would all be better off if we transformed their Finance function in situ. Three days of Workshops on average is sufficient for me to download sufficient advice to keep such a team busy for a year, blissfully Transforming itself.
As my second Book will describe in more detail there are several key questions at the start of a Transformation program and if you haven't addressed them it is impossible to do Organisation Design for Finance or any other Function for that matter. For the purposes of this Article you need to know very clearly:
What is the precise Problem - Prove it Numerically, anecdotal evidence is insufficient
What is the Solution - Lay out and cost your Options
Should we Proceed - Do you really want to go through the Pain.?
I bet you all thought it was a given that you proceed, if so it would interest you to know that I have laid out the problem and the options to 4 Clients in the past 5 years and all decided against proceeding. Still don't believe me? Wait till you are in the Doctors surgery and you don't like the first prognosis...
The key to Organisation Design of a Finance team is the numbers. Every non Finance Subscriber to this Newsletter just went 'doh well of course it is!!!" However, this is not successfully applied in I would say 70% of cases. The majority of Business Case / Feasibility Studies into major Change programs are done in a 'cupboard' by teams who don't wish to engage in case anyone tells them something that contradicts their preferred narrative.
Consequently, major decisions on adopting Shared Services, Captive or BPO, Centres of Excellence, Onshore Near or Far shore, or a new ERP are performed in isolation at only a certain level of seniority.
In most cases this will completely bypass middle management. Middle management are like the Army Sergeant Majors...no Army functions without them, THEY know the numbers, THEY know where the bodies are buried and THEY are seldom consulted at sufficient depth right at the very start of a Program.
Still think everybody pays attention to the Numbers at the start of a Transformation...
If you are tasked with sizing a Finance team for an in flight program I would suggest you do 3 things:
First starting point is the size and shape of the existing team - this is the easy part but I do suggest you expend time in researching how it arrived at its current configuration. By 'suggest' I mean really go and do this.
Then the most critical point to establish is the volume of work they currently manage and to what level of performance. This is what drives the result, it is vital. You will indeed be told that the new system will fix this, that and the other, so close your eyes, ignore that and don't be surprised when the first thing the Program Manager asks for is increased temporary headcount to 'manage go live'.
The third thing I suggest you to do is think from first principles and challenge all assumptions. Read and revise the Business Case. I largely suspect you will read something along the lines of...100 FTE...new Tier 1 ERP...20% headcount reduction. This was written by somebody from a textbook don't go betting your career on that result.
Finally, you need to road test the result. I usually get a lecture hall of silence when I say this. How do you road test a new Finance Organisation Design?
Well folks I am a Consultant and that part you need to 'Book' me for and we can have a long chat which will explain it in full and I will give you a signed copy of the Book.
Cheers,