Due to the sharp rise in digital applications in the line and within the finance column in public institutions, economics and control are changing. Other ways of managing are needed, and the business partner role that thinks strategic organizational issues really needs to be addressed now, writes Laudy Konings, partner at Exilo.
The finance and control teams we encounter in our work are traditionally strong in efficiency, operational excellence and (financial) control. However, their role is changing due to digital applications and innovations in the line, but also within the finance and control team itself.
Other ways of managing are needed, and the business partner role that thinks about strategic organizational issues really needs to be addressed now.
Some examples of organizational issues that should be reviewed. What role does digitization play in the organization? Is digitization seen as an enabler of strategic goals or as a factor that creates value? Does the organization focus primarily on internal efficiency or on social contributions?
How do the results of digitization actually contribute to the (strategic and social) goals of the organization? And when will digitalisation make employees in the line or in finance and control really happy?
An important effect of digital applications and innovations is that more emphasis is placed on result and result management than output and output management. The time to create spreadsheets and periodically check financial data is over (monthly, quarterly, yearly).
CFOs and their teams must continuously monitor developments in the line as a result of digital applications. Do these developments add value to the organization’s (social) goal fulfillment or not? There is also ongoing monitoring using digital applications and innovations in finance and control processes.
For the CFO and his / her team, this means: better understanding of the internal customer (read: the line), more understanding of technology and what this can entail (eg application of business intelligence, algorithms, artificial intelligence) and closer on primary process than ever.
Establishing the connection
Governments and public institutions are increasingly working on a digital strategy that creates the link between innovation and operational excellence. Both in the line and in the operational functions.
This digital transformation enables new value propositions in the primary process (e.g., blockchain applications in the social domain), putting CFOs in the public domain at the forefront of understanding, facilitating, and amplifying such developments from a financial perspective.
To be able to do this, changes in processes within economics and control are necessary. However, there are several avenues to implement these changes successfully. Sometimes via a method where a movement is slowly initiated to involve all employees in the finance and control department in the changes. Sometimes via so-called ‘nursery rooms’, where innovations are piloted and then scaled up. And sometimes by a thorough overhaul of almost all existing processes in economics and control.
Depending on the type of organization, maturity and other factors, a situational assessment should be made of which method or way is most appropriate to handle changes in financial and control processes.
However, the CFO’s, and thus finance and control’s biggest task, lies with organizations that are approaching digital transformations through agile work. Both in the performance of the partner role towards the line as well as in the projects carried out within operations management (and finance and control).
How do you keep track of the momentum and results of these agile approaches? When is an agile approach project on the way? This is a difficulty in itself, let alone when dozens of agile projects are involved. How do we keep track of these projects and how do we maintain control? Does such an agile approach project still add (social) value or not?
Finance professionals face the challenge of understanding, facilitating and strengthening that process and thereby controlling it. And that is only possible by being careful and often supplemented by simply using your common sense.