The better the question
Where should you start when transforming your operations?
Transformation agendas can go awry if stakeholders don’t talk.
The world is moving fast. If organizations want to stay ahead of the curve, their operations need to be agile and predictive, and they must pick the right time to engage with both the right talent and the right new technologies to gain a competitive edge.
However, there are a lot of technologies out there and a lot of business processes, all in a state of continuous evolution. Separating the signal from the noise – and picking the right strategy – can be a real challenge.
Even when organizations choose a strategy, other factors can stand in the way of effective implementation. Understanding how to ask the right questions, who to ask and where to find the answers, is critical in making any strategy work.
Take, for example, the challenges around digital transformation.
Digital transformation is a vital component of any modern business strategy. Old software, platforms and processes become unfit for modern needs. In their place, new software, new platforms and new processes need to be developed and efficiently implemented.
However, transformation is often driven by technologists and IT teams, rather than the people who they will actually impact – such as those on the office floor. This can make communicating business value and enacting effective change a fraught process.
The most sophisticated, expensive artificial intelligence (AI) in the world can quickly become ineffective if implemented without the input from the people who would actually be using it, and whether or not they think it would actually improve processes.
But getting the right people talking and identifying the actual problems that need to be solved, can be harder than it looks.
One Tier 1 financial client came to EY with this problem. It had faced challenges in implementing technological transformations in the past, and so recognized the need for creating the kind of collaborative spaces in which critical questions could be asked – and strategies shaped – before it started building technology into its operations.
The question the client asked was crucial but broad: rather than making incremental improvements, how do we think differently about how the finance function supports the business? In particular, it was looking at how to improve operations across eight distinct finance processes, from financial accounting to book closing, by applying technology in ways which would work to deliver real value.
The better the answer
Thinking around the issues
Getting the right answers means fostering the right conversations.
Finding fresh perspectives meant the client needed to bring together the right expertise. For large multinational organizations, these conversations can be hard to create and sustain – teams can be widely distributed around the world, business functions may be highly siloed and individuals may keep varying hours. Bringing stakeholders together physically – and giving them the tools to succeed – was critical.
The technology enabled everyone to collaborate live on a canvas that everybody could see whether they were sitting at home, in Hong Kong, the US or London.
Building a space to shift perceptions
In practice, this took the form of a Finance Innovation Lab, which was built for the client by leveraging EY’s wavespace network. The EY Advisory and Assurance teams worked together on this project to help create the conditions that allowed the client to have these conversations – bringing our own different perspectives to bear on the project.
In wavespace we help clients curate talent and technology, bringing them together in collaboration. They are proven to energize and align teams to create meaningful outcomes, faster.
Clients can engage with wavespace locations around the world, be hosted in temporary pop-up wavespaces, or have a wavespace installed in their premises – all are designed to help clients interact with ideas, technology and each other, in ways that can lead them to the decisions and creativity that will help them thrive in the transformative age.
Over the course of an eight-week program, wavespace hosted dozens of key stakeholders in over 150 meetings, giving them the perspective and collaborative focus they needed to think about and ask questions about the best ways to transforming their finance operations. At the same time, participants were challenged to work identifying meaningful ways to assess how technology solutions could be applied to their finance processes.
First, the client landed on the Cloud as the most appropriate technology for their needs. Within wavespace, they then started challenging their own assumptions – rightly identifying the fact that the Cloud could not be considered just as a technology play but needed to be understood as a wider platform that could transform the finance function in multiple ways.
Technology is a tool. It’s not going to get you results on its own. It's how you shape the organization around the opportunities that the tool provides.
The client also identified potential roadblocks. Through dialog with respective stakeholders, they found that if they had focused entirely on the tech, but neglected the process side of the equation, the desired results would not be delivered.
EY ensured the wavespace environment provided the frontline finance professionals everything they needed to help design the solution and define the use cases, supported by the IT and Finance Change teams. Through transparent conversations between different stakeholder groups, practical, effective solutions began to emerge.
Developing a truly transformational, measurable strategy
Through creative collaboration within wavespace, the client not only honed their transformation strategy to a specifically Cloud-based approach – they also developed clearly defined steps that would allow them to pursue real, measurable value.
Across the program, the client’s teams collaborated on 20 distinct ideas around Cloud-enabled finance. These included:
- A data model which created a single, unified data source for the whole finance function, that only needs to be adjusted once – making it easier and more time-effective for multiple business units to engage with data in the way that’s most appropriate for them.
- Real-time data quality visualization, allowing for prompt data validation (the process by which data is checked for accuracy and usefulness) and data remediation (the process of cleaning, organizing and moving data in a way that makes it fit for use). This included the use of machine learning and artificial intelligence to improve data quality.
- Detailed reporting tools that broke down standard reporting across different dimensions (such as business line or legal entity). These provided detail down to the transaction level, and captured commentary from multiple stakeholders on any given product or investigation.
- Continuous and automated control monitoring over the entire data population, rather than manual testing of individual samples.
These tools allowed the client to come up with solutions that led to real, measurable value for its finance function – and the business as a whole.
The better the world works
The fruits of creative collaboration
The right conversations lead to fresh perspectives and better outcomes.
Overall, compared with their former ways of working, the client realized they could benefit from a 300% increase in data processing capacity, in 25% of the time and with a 30-50% reduction in cost.
With these new Cloud-enabled processes, they identified the potential to remove the need for manual reconciliations between different systems or data sets. This could then potentially save significant man-hours – including reducing the time taken to close accounting books from up to 20 days down to four days – freeing up time and resources for more value-adding tasks.
The client was enthusiastic about the effectiveness of the collaborative environment EY helped create: “In just ten weeks, we went from “how do we improve finance” – and a certain degree of skepticism over technology products – to 20 well-thought through ideas using the Cloud. It’s generated excitement among our people, because they can see how to make finance better, faster and cheaper, and in the process give the business better controls, better data quality, and more insightful reporting.”
The model office approach is the future platform for working with our financial services clients as they develop their digital finance transformation journeys.
Working together to find the right path
This client’s wavespace experience – and the values of collaborative, conversational thinking it supports – holds wider lessons for any organization trying to transform their operations in preparation for a digital future.
Particularly, it demonstrates that grounding any technological agenda in real world, human experiences – rather than hypothetical ideal scenarios – is critical if technology solutions are to be applied in an effective and valuable way.
With the current business landscape utterly changed by the impact of COVID-19, organizations increasingly need to be able to reimagine how they work in this unchartered environment. More than ever, they will need to reframe how their business models and operations fit into a global economy that continues to experience severe shock as a result of the pandemic. To effectively reinvent themselves during this crisis, organizations will need to embrace transformation to drive growth.
But reimaging, reframing and reinventing your business will not be enough if the vision you create hasn’t been properly thought through. By creating the mental space to think through the challenges brought about by COVID-19 – actively seeking different perspectives and challenging assumptions about not just the right paths forward, but also the fundamental issues to be addressed – organizations can ensure they are pursuing strategies that can deliver genuine value.
Additional EY contributors include George Ioannou – CFO Advisory Technology, Amy Steptoe – CFO Advisory.
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