Place processes at the heart of finance transformations

Process-focused finance functions aim to better understand how stakeholder value is created throughout finance processes.

In brief

• Finance functions must balance technology adoption with process and people considerations for successful transformations.
• A process-first approach prioritizing stakeholder value within finance processes enhances efficiency and optimizes the finance function.

Finance functions are constantly under pressure to evolve due to changes in both internal and external stakeholder needs. Therefore, finance professionals often find themselves amid finance transformation projects. Implementing new technology is a common approach to shape the future of finance.  However, prioritizing technology over careful consideration of processes and people can lead to diminished returns, especially in substantial transformations like ERP system implementation.

EY teams have worked with numerous companies struggling with systems unfit for their processes or processes not leveraging systems’ capabilities, resulting in inefficiency, ad-hoc solutions, and poor data quality. While system implementation is vital, a process-first approach optimizes return on investment by enhancing workforce efficiency, and improving the overall finance function’s performance.

Process-first approach for transformations

Process-focused finance functions prioritize understanding stakeholder value creation within processes, and finding what inputs are needed from other stakeholders to maximize that value. They often organize around processes rather than functions, products, regions, or operations, and promote process understanding throughout the company. Process-oriented change management starts by understanding current processes, key outputs, resources, and systems, often creating process taxonomies, flow-charts, RACI matrices, task instructions and policies. Large technology implementations greatly benefit from a strong understanding of the processes, as key tasks, dimensions, inputs, outputs, linked systems, and user groups are well-known from the beginning. In some cases, companies might also want to analyze the current processes and identify pain points before initiating a new technology implementation. Poor design choices in current processes should not be duplicated to new systems’ design.

Management’s role in transformations

A successful finance function transformation project requires centralized and clear governance. Strong management commitment directs the organization toward achieving the defined goals preventing situations where project streams and new processes do not have a clear owner.

More importantly, management must demonstrate dedication and courage in designing the finance function’s future direction. Implementing advanced tools and technology will not yield desired benefits unless the management is willing to adapt working methods and ensure change management gets the attention it needs. Suggesting changes that affect daily work may face initial resistance, but failure to make these decisions leads to subpar and partially realized implementation. Proper change management and involvement of all parties ensure needed changes yield better results.

Management’s dual role of decision-making and change management requires a clear overview of both current and future finance process and system landscapes.

Benefits of process-first approach

A process-first approach helps companies make informed design choices during transformations, make the right calls, and effectively communicate the vision to the organization. Proper process walkthroughs  enhance the organization’s understanding of transformation’s desired impact and provide insights for designing and implementing future processes. Benefits will cumulate over time, fostering better control via standardized ways of working, clearer development responsibilities through process ownership, higher data quality through fit-for-purpose solutions, and more meaningful work for finance professionals by optimizing global end-to-end processes and emphasizing business value creation.

Process Excellence team: how can we help

EY Process Excellence empowers finance functions to maximize their process potential. We help financial units identify  critical areas of development and improve processes from different perspectives, such as design changes, automation, and risk management. Additionally, we assist in selecting new technologies, defining roles and setting responsibilities and goals. The development of processes usually has companywide impacts, emphasizing the need to understand the current state and set clear goals before project initiation. We prefer a process-oriented approach in transformations as it provides the best elements for a successful transformation.

EY Financial Accounting Advisory- and Climate Change and Sustainability Services teams support CFOs, sustainability leaders, controllers, treasurers and audit committees in disclosing financial and non-financial insights to stakeholders. We provide insights and services to comply with evolving financial and sustainability requirements,  boosting transparency and trust in reporting, and aid in decision-making. We also offer support  in financial data analytics and innovation through our specialized tools.