Finance - One Version of the Truth!

Finance Transformation projects are large scale endeavours, costing millions and causing major disruption to staff and processes before they deliver Benefits, so why do them? One reason advanced is that they will finally provide the Management Insights required to run the Business. I have heard this answer multiple times over 25 years and I have yet to see it happen as effectively as the CFO requires.

The CFO and the Decision Support teams in their various guises of Commercial Finance, FP&A and Finance Business Partnering will forever bemoan the poor reporting capabilities, lack of data consistency, timeliness and multiple versions of the truth they must work with. They will be present on Finance Transformation Steering Committees to ensure the Management Information requirements are met and in my experience their task is an unenviable one.

Finance Transformation programs involving ERP consolidations, upgrades or new implementations are tough beasts to control and they can become dominated by the technology at the expense of the true Business need. Decision Support subject matter experts from Finance inevitably become marginalised in such environments. The result is not good for the CFO!

The Business will get a new ERP, Finance will be transformed, Benefits will be delivered and then the 'after action' Report is compiled. Almost 2 years after the Business Case was first discussed the Decision Support teams will be asked "did you get what you need?" Is the Data they need to run the Business now at their fingertips? The answer will in most cases be NO or worse still the new system created new challenges for them to contend with. That is, I accept a harsh assessment, but it is so regular an occurrence that an alternative Strategy is required.

Finance Transformation UK & Lumilinks have produced the alternative - 'Total CFO!'

For many years the Holy Grail of management reporting was 'One version of the truth'. One source of data, readily available, verifiable, compliant and user friendly. The traditional approach to attain this is a Data Warehouse on the back of the new ERP. As we can see from above this is a long winded, costly and ineffective means of achieving this objective.

The CFO is the ultimate custodian of all matters Financial in any Business, and to run a Business successfully at FTSE 250 level they require 2 things to perform their role effectively for their Business to grow and succeed:

1. A Dashboard of Critical Success Factors; and

2. An 'enriched' version of the truth to optimise this Dashboard

The traditional approach, of ERP and Data Warehouse, can achieve (1) over a minimum of 12 months at a total cost measured in millions. It cannot achieve (2) as the ERP and Data Warehouse are driven from internally available data sources. The drawbacks to this approach are obvious.

The alternative is called "Total CFO" and is the brainchild of Finance Transformation UK Partner Michael Ryan and Gary Cole, CEO of Lumilinks. It is based on the premise that an experienced CFO can quickly define for their Business a 'Dashboard of Critical Success Factors.' They do not require to wait on the lengthy timescales of a Finance Transformation program.

Therefore, (1) is achievable in a short space of time, in focussed Strategic Workshops with the CFO. Delivering an 'enriched version of the truth' is where Lumilinks adds the real value, with speed to deliver and ongoing cost of production being key differentiators. Lumilinks can take Data from all internal Business systems and 'enrich' this with external data sources which the Business cannot easily access in a timely and cost-effective manner.

Deploying "Total CFO" can provide a more effective Dashboard of Critical Success Factors in 5% of the time it takes to deliver an ERP implementation at a fraction of the cost.

Author: Michael Ryan

With 25 years' experience Transforming Finance across multiple Sectors as a Consultant and as a Finance Transformation Leader, Michael Ryan is uniquely placed to advise Clients on creating a World Class Finance Team. Call him now on 0203 1466878