I have just finished an interesting discussion with Vagn Hansen, former VP Finance, Finance Operations at Shell and David Mitchell, Partner – Finance & Performance Management at Kurt Salmon.
The discussion and presentation were an exploration of our respective and collective experiences in large scale change, especially that Finance variety typically referred to as ‘transformation’. Some key insights came out of the discussion.
There is some great best practice out there, stimulated and benchmarked in a large part by the work of such organisations as the Hackett Group.
The key benchmarks of World Class Performance are detailed below or can be summarised as finance moving from ‘counting the beans’ to becoming a true business partner;
- Finance is looking to achieve substantial reductions in costs related to revenues from nearly 2% a few years ago, to 1% today and an aspiration of 0.5% in the future.
- No compromise – Effective AND efficient
- Shared services delivery model
- Enhanced decision support for management
- Improving overall operating results
We discussed some of the key insights we have observed and developed;
- Change & Transformation Insights
- Change is a Process not a Project
- The Law of Un-intended Consequeneces is alive and well with regard to performance measures
- An effective and detailed ‘Operating Standard’ is critical
- Performance & Control Insights
- Standardisation & Simplification CREATE complexity – It is not a bad thing, but it is reality.
- The Systems Myth – The process is NOT the system – This can blind us to a lot of real issues
- Performance measures alone do not drive effective management action
In benchmarking studies, much is made of the role of ‘Decision Support’. This term has been used to describe various reporting and business intelligence tools as well as the role of analytical finance teams. One of the key insights has been that to provide effective support for actionable management decisions, we need to both DEFINE and MONITOR a detailed operating standard for the business processes. This operating standard includes the classic components such as process definitions, taxonomy, performance measures, organisational elements etc. The key to the new insight is the need to have process defects defined and monitored. It is only through exposing and analysing exceptions to our expected processes and operating standards can we aggregate the issues into root causes and take effective management action to accelerate the journey to the target model and operating performance.
There is also a survey we would like you to participate in. You will get access to this after the session. We will share the survey results with all participants to help develop a shared view of common practice and best practice.
Thanks for reading . . .