CEO Wavelength
Finance Architects: Designing Your Finance Function – Right.
The challenges of a business can often point to a poorly designed finance function. So, what should a well-designed finance function look like?
Efficient Design
More often than not, businesses have an organization of people and processes that just don’t make sense and, slow a business down. Maybe the set up of their finance function made sense, pre-Y2K era (remember that non-event, event?). Or, the finance function was designed while fires were being put out without the benefit of integrating all proper design considerations. Or, people who are not finance people who excel in process design and leveraging appropriate technologies put together a poorly designed and operating finance function, where it’s a mosaic of activities to get stuff done but, not the right stuff done. Or, it’s all of these things.
An efficiently designed finance function will consider: the flow of decision-making within the finance function and, across the company, roles and responsibilities will be clearly defined and, a good tech stack that fits the nature of the business. Resulting from these things will be solid business insights that flow from finance across the Company, bundled according to the right audience, in a timely way. The cost of the function will be much leaner than that of an inefficient finance function.
Operational Know-How
To design a finance function well means knowing the “ins and outs” of a Company’s operation. Investing in finance experts who know both - how to operate a finance function and who can design an optimal finance function (note: these two things are not always found in the same finance expert but it is worth the search to find them in one finance leader).
The Signs: Opportunity to Properly Design Your Finance Function
Usually, there are many signs. The big ones are: slow and/or, inaccurate and/or incomplete business insights. The people, the processes, the tech – these are all opportunity areas to enhance your finance function. When the signs are present, seize the opportunity for properly designing your finance function. It’s nothing short of transformational when you have a well-designed finance function. Make sure you engage with the right finance experts for when you do decide to transform your finance function and, look for the qualities of an Operational CFO whose equally identifies as a Finance Architect.
