“Part of the pursuit of excellence involves eliminating as many surprises as possible because life is full of the unexpected.”
– Sir Alex Ferguson
To lead the digital transformation of a finance department in a fast-growing business, you need to be aware of key considerations across a range of areas, including:
- Establishing requirements
- Vendor selection
- Building and leading your team to success
- Managing budget and accountability
- Ensuring adoption and ROI
In this article we will look at each of these areas and how you can eliminate the common surprises that derail finance transformation projects.
Before embarking on a finance function transformation, it is crucial to understand what you’re looking to achieve (both from a technological and non-technological standpoint), why, and the potential consequences of getting it wrong.
We know it’s obvious, but you need to begin by establishing clear and well-defined requirements. This phase lays the foundation for a successful project, ensuring that any chosen system aligns perfectly with your company’s needs and objectives. To eliminate surprises, you should look across 5 key areas of requirements:
1. Defining the Problem
To avoid jumping headfirst into a finance transformation, you need to clearly define what problem you are trying to address. This does not have to be overly detailed at this stage, but it should be a clear paragraph of what the problem is so that you can start to build requirements based on the problem and the next two points below.
2. Current State Assessment
Conduct a comprehensive gap analysis of the existing processes and requirements within your finance department and compare them with what your current system can accommodate. You want to understand what pain points and bottlenecks exist as well as the key areas that need improvement. It is important to get feedback from the finance team at this stage to better understand how the people using your systems day-to-day are experiencing challenges.
3. Future State Vision
Define a clear vision for your finance department’s future state, even if parts may not be currently possible. You want to consider industry best practices for ways of working, data handling, and how departments are brought together in any new ERP system. All these processes should be aligned to support your overall business strategy as well as tackle the problems you defined in the previous two sections.
4. Cross-Functional Requirements
Although you may be leading from the finance department, any new system you implement will impact the entire company. Work with the heads of other departments to build buy-in from their side as well as understand what they need from any new system from a functional perspective.
5. Customisation and Flexibility
Finding the right balance of maintaining processes while adopting the leading practices to avoid heavy system customisation is a tricky task. Having the mindset of taking best practices means you can get NetSuite implemented quicker and accelerate realising your ROI.
Should you need specific functionality that is missing, you can look to build customisation early, but we would recommend that it falls into phase two of any project and you embrace the industry best practices.
Once you have your problem and requirements well-defined, the next step is selecting the right vendor.
This is no easy task as you will often find they try to steer you away from your requirements and towards the areas of functions where their product excels. As the lead of any finance transformation, you must question vendors in-depth about the robustness of their solution. Push them to literally show you how the system would meet your requirements and ask them to provide examples of similar projects along with reference sites of clients with the same requirements as you.
A typical vendor selection exercise will follow the 6 points below:
1. Speak to your Peers
One of the best places to start in creating a list of potential vendors is speaking to your peers. This could be connections you have made over the years or by joining community groups for people in similar job roles. These people will be able to give you direct recommendations and share their experience with systems, vendors, and partners as well as what they found difficult during the project that you should look out for.
2. Request for Proposal (RFP)
Prepare a comprehensive RFP document that outlines your project’s objectives, the requirements you have for a new system, and any other expectations you have. This should be sent to your listed vendors who will decide if they can respond with a detailed proposal or if they would like to remove themselves from the process.
It can often make sense to work with a partner or independent advisor at this stage, who can help establish your requirements and prepare your RFP. This can help to cut down the back-and-forth needed for clarity and ensure you have a thorough understanding of your current processes and future requirements.
3. Shortlisting and Vendor Demos
The next step is to create a shortlist and start arranging vendor demos for those who have responded with a suitable proposal. To make sure you don’t waste days just watching demos of what each solution is strong at, it is vital you give the vendors examples of real-use cases you would have for their system. This should be based on the requirements they have already seen, and you should aim to make it as close to the real environment as possible.
4. Reference Checks
Should the demos be a success and reduce the number of possible options then you need to carry out robust reference checks on the vendors. This should include:
- Speaking to existing customers of the vendor to gain insights into their experience.
- Evaluating the financial stability of the vendor for the long-term
- Scalability and future-proofing of both the system and vendor
Carrying out these checks will give you the best chance of partnering with a vendor who will have a track record of success and be able to support you for years to come as your business continues to evolve.
5. Contract Negotiation
The importance of negotiating the right contract cannot be overstated when it comes to removing surprises from a finance transformation project. While you should cover the typical areas of pricing and licensing, you also must ensure both parties are aligned on implementation timelines, support agreements, exit strategies, and who is responsible for each part of the project.
6. Partner Selection
Finding the right implementation partner to work with can make or break a project. In most cases where someone is unhappy with a system, it is due to the quality of the implementation rather than the ERP.
You want to look at the previous projects the partner has delivered as well as their methodology when deciding if they are the right fit for you. Always look at how they stand out from the crowd and what they are doing differently to drive successful projects.
Building and Leading your Team to Success
As the leader of a finance change project, it is down to you to build and lead your team to success. Sharing the load is the only way to effectively complete a project but you must ensure the people you are sharing it with are capable. To build the best team possible, you should consider:
1. Cross-Functional Expertise
Not only do you need a cross-functional team, but you need members who possess skills that are cross-functional. Think of someone who has a deep knowledge of the finance department and how it works, but also has a great understanding of project management or relevant industry regulations. Those combined skills will facilitate a more holistic approach to the transformation and increase the chance of success.
2. Change Champions
Designating someone with the project to be the change champion can go a long way in helping to motivate the wider business and provide support during the transition. This person should be enthusiastic about the project and understand the ‘big picture’ benefits that it should bring so they can act as advocates for any new systems and prevent the team becoming bogged down in small road bumps. (e.g., ‘I know the invoice layout is changing, but it’s going to allow us to automatically consolidate our entire global operation.’)
3. Communication and Transparency
Any form of business transformation comes down to the people, both delivering and using the new system. Open communication with regular updates, progress reports, and opportunities for teams to provide feedback or raise concerns will foster trust and collaboration which is vital to a successful project.
4. Empowerment and Ownership
To avoid team members feeling like they have been forced into the project they need to have a feeling of empowerment and ownership over what they are doing. Encourage your team to identify process improvements or innovative solutions that can enhance the efficiency of the business and be sure to acknowledge and reward these contributions.
5. Training Roadmap
Part of being a leader is understanding that not everyone will have the skillsets they require yet. Take the time to create tailored training programs for different roles within the team to ensure that team members receive the specific skills and knowledge they need to be successful.
Managing Budget and Accountability
As the head of the finance transformation project, the success or failure will ultimately land with you. This can be daunting, but a methodical approach will remove the chance of a nasty surprise derailing the project. To ensure financial control throughout the transformation you should consider these 4 areas:
1. Creating a Comprehensive Budget
Build a comprehensive budget that encompasses all aspects of your financial transformation to avoid having to go back to the board of directors asking for more funds. While we cannot list everything here, you will be looking to include licensing costs, hardware costs, consulting fees, training expenses, data cleansing and migration, ongoing maintenance, and contingencies for unforeseen challenges.
2. Accountability Framework
Finance transformation projects often fail due to a lack of accountability across teams working on the project, especially in larger changes where it is easier for mistakes to happen as an overlap of teams muddies responsibility. Avoid this by having clear roles, responsibilities, and goals so teams know:
- What they are responsible for.
- How project milestones will be tracked.
- How to communicate changes or delays.
- When deliverables are due.
- The impact of missed deadlines.
3. Ongoing Monitoring
It might sound obvious that ongoing monitoring is necessary, but it can be one of the first areas to be forgotten during the day-to-day of a tough project. Establish a robust monitoring and reporting system that tracks actual expenses against the budget and regularly review this with key stakeholders in the project.
Never be afraid to take corrective actions based on any deviations you identify and put changes in place if needed to bring things back under control.
4. Contingency Planning
You want to develop a well-thought-out contingency plan that addresses potential budget overruns or delays to the project. There will always be things outside of your control and having a robust contingency in place can help prevent a surprise change derailing the entire project.
We always recommend having a 20-30% budget contingency which can be used to find opportunities to get the most value out of the system, ensuring your team can focus on enhancing your business during the design and testing phase.
Ensuring Adoption and Long-term ROI
Given the significant investment that goes into a business change project, sustained user adoption and long-term ROI are critical. You should have some modules planned for implementation in phase 2, but during testing and training your team might have raised more requirements and customisations that were pushed back to ensure phase one go-live on time. Now is the time to look at all these improvement opportunities and plan what enhancements to make.
To get the most ROI from your new system, you should also consider these 5 key factors in long-term success:
1. Continuous Improvement
Any system that is implemented should be treated as a dynamic tool that evolves with your company. Establish a process for ongoing improvement and optimisation by regularly reviewing the system’s performance and user feedback to identify areas that would benefit from enhancement.
Part of this process should be empowering your team to be curious and find ways to solve their problems or challenge the system. The most successful projects have highly engaged teams that explore all of NetSuite, find out where the system could be improved through other modules or customisation.
2. User Feedback Loop
Once the system is in place it is important to keep a channel of dialogue open with those who are using it each day. A formal system for collecting and evaluating user suggestions will help with user engagement and help identify opportunities to refine the system.
3. Training and Support
Even after the initial implementation, you should continue to invest in training and support for teams using the system. Access to resources and documentation is a good first step, but having a dedicated support team who can address questions and issues promptly will encourage adoption and help boost the ROI of your new system.
4. KPIs and User Adoption Metrics
The KPIs for the project should have been defined early on but they will often end once the implementation of the system has happened. Be sure to update what you track and monitor post-implementation to see the efficiency and effectiveness gains.
Another key consideration comes from user adoption metrics. These should be tracked to identify patterns or departments that may be underutilising the system. This will allow you to provide targeted training and support to improve the adoption rate as well as recognise high-performing departments who may be able to share what is working for them with the wider business.
5. Strategic Alignment
Continuously assess how the new system aligns with your company’s strategic goals and adjust the configuration and usage to support evolving business objectives. The aim here is to ensure that the system remains a strategic asset rather than a static tool which has diminishing returns.
To successfully transform the finance function of a fast-growing business, a methodical approach to change mixed with experience or guidance is required. While we covered many of the key considerations in this article, it would be impossible to have a fully comprehensive list which is why you should always strive to work with a team who have experienced projects from both the client and delivery side.
At MacroFin, our unique finance-led approach was created to fundamentally change the way financial implementations are carried out, resulting in an average go-live in 4 months. Driven by years of experience as finance professionals in the industry, MacroFin was launched in 2018 to eliminate the most common pitfalls and challenges our two co-founders experienced as Chartered Accountants on the client side:
- Projects were primarily led by system specialists, not finance specialists.
- The implementation process became lengthy and detached from the goals outlined in the sales and planning process
- There was always an over-dependency on individuals from both the client and partner side.
Now, we have 40+ staff, including 16 senior financial consultants who have delivered 300+ successful projects for some of the world’s fastest-growing and most recognisable brands.