Imagine the Full Potential of Transformation

Implementation helps organizations from project initiation through execution and capability building. Our consultants work hand-in-hand with you to ensure quick ramp ups, on-time delivery, and sustainable change.

Cost Reduction & Increased Effectiveness

The trade-off between cost reduction and increased effectiveness of the finance function is a false choice. Leading finance departments are guardians of enterprise value creation, demonstrating stewardship of their own spend by lowering absolute costs and shifting work towards more value-added activities. We have analyzed the finance functions of hundreds of companies to understand how cost and effectiveness have evolved over the past ten years. After controlling for differences in sector, scale, and geographic footprint, several findings emerged:

What can companies do differently to join the finance leaders

Look beyond transactional activities

Many leading organizations have substantially increased efficiency in transactional functions—by 39 percent or more—including areas such as accounts payable, accounts receivable, and other core accounting areas. While most companies have room for further improvement, subsequent efficiency efforts will almost inevitably show diminishing returns as the cost base for these activities continues to shrink.

Help finance lead in data

Finance departments face challenges in managing and leveraging data effectively. They need a well-defined master data-management strategy to handle the increasing volume and complexity of data. This strategy is crucial for generating actionable insights that support financial planning, liquidity management, and asset deployment. Finance leaders play a key role in defining the master data strategy and should prioritize data quality, align data standards across departments, invest in flexible data infrastructure, allocate resources to clean data, and leverage technology for data validation.

  • Prioritize data quality and consistency: Set high standards for data structure, entry, aggregation, storage, and protection. CFOs can lead enterprise-wide transformation, drive data governance, and reinforce change-management practices.
  • Help lead data-standard alignment across departments: CFOs have a unique perspective as both consumers and providers of consistent information. They can marshal resources across departments, promote collaboration, and develop business cases for improving data quality.
  • Invest in an agile, tech-enabled data backbone: Advocate for a layered architecture that accommodates changing business needs while maintaining a single source of truth.
  • Allocate finance-staff capacity to clean data: Invest in validating and cleaning data at the point of entry, which is more efficient than addressing data-quality issues later. Provide additional capabilities to address data limitations.
  • Deploy technology for better-quality data: Use machine-learning algorithms to cross-reference and validate data, reducing errors and saving time during data ingestion.
Improve decision-making

The use of advanced analytical techniques to solve pressing business problems is increasingly a requirement for finance departments.

Beyond providing analytical insights, the finance department is also responsible for framing discussions on company performance and the actions needed to improve it. To be effective, finance staff need to be able to provide:

  • Clearer insights, by communicating performance unambiguously, highlighting shortfalls against expected outcomes, as well as the underlying factors and context that informs why these gaps occurred.
  • Faster insights, so that management can understand recent performance and make decisions to change its trajectory quickly and decisively.
  • Richer insights, based on more robust datasets from a wider variety of sources, providing broader perspectives than those based only on internal financial data. For example, profit projections can be contextualized against the overall sector’s performance. By basing insights on multifactor datasets that include both internal and external data sources, organizations gain a more realistic view of likely performance outcomes and reduce the chance that unexpected shocks will render projections inaccurate
Reimagine the finance operating model with new capabilities

Finance organizations are adopting a new operating model that emphasizes agility and focuses on pressing organizational issues. This model includes streamlining core operations, implementing data standards and management practices, leveraging automation and digital technologies, and undergoing organizational changes.

  • Break traditional hierarchies and form flat networks of teams: Enable finance business partners to access a shared pool of analysts based on agreed-upon priorities.
  • Mobilize temporary teams for in-depth insights: Apply agile principles to identify and solve business problems through financial analysis sprints.
  • Embed digital skills across the finance organization: Develop programming, analytics, and data interpretation capabilities.
  • Develop business-savvy finance leaders: Encourage job rotations within finance and between finance and other departments to build versatile professionals.
  • Strengthen finance skills with a competency matrix: Establish transparent standards for career progression and capability-building actions.
  • Incentivize skill development: Tie incentives to knowledge and capability growth, set targets for internal promotions, and recognize managers who foster skill development through coaching.

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Imagine the Full Potential of Transformation

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