Modernization in the financial sector did not exist until now. Although business leaders express a will for technological progress, they do not have a sufficiently developed strategy for primary problems. The modernization of technology and business processes should unite to form the dynamic foundation of any business.

One of the essential ways to implement strategic and proactive modernization is to form an independent internal team that guides the organization towards progress. The key is to have a team of people dedicated to the transformation effort with a fully developed strategy. There are strategic and tactical considerations for a transformational office, and the finance function plays an important role in these considerations.

The transformation office must be functionally independent

The finance function must be represented within the transformation office, but at the same time separate from it. The transformation office must be functionally independent because it is not a finance, operations or technology transformation office. It is outside of all these functions, but it interacts with all of them. Various functions throughout the company should cooperate on one plan for transformation and creation of an adequate solution. The office needs to know different technologies and different types of procedures in business.

With business vision and technical understanding, the office can help all functions take a proactive approach to modernization. In a proactive approach, the transformation office must look beyond "halfway" solutions in order to proactively plan long-term needs, and the financial function has one of the more important roles here. A proactive approach can help each function identify realistic goals and tactical steps for improvement over time. A dedicated team should think about continuous improvement, with a focus on ROI. However, it is important that ROI focuses not only on profit and loss, but also on the cash flows that underpin the economics of the investment.

The finance function is one of the key ones in the transformation

Although the transformation office should be structurally independent, it must also be pragmatic. The finance function plays a key role in helping the office balance this focus and possible cost reduction opportunities against a proactive perspective of continuous improvement and return on investment.

The finance function brings important value to the transformation office, but so do many other areas. In addition to a range of functions, the office should also represent a range of experiences. The finance function must be represented by a mix of experienced knowledge and fresh ideas. Structure and composition are equally emphasized in this process. For experience, you need someone who has experienced most aspects of the finance function, while new ideas are essential, it is also important to use and protect institutional knowledge.

Put the right people in the right places

Modernization should refer to institutional knowledge and it is important to plan for the retention or transfer of this knowledge when necessary. The key is the ability to absorb or at least soothe the team during the transition, which is a financial task as it is about skills, training and development. For finance and other transformation functions, succession planning means disseminating knowledge, clarifying and codifying processes, documenting rationales, and involving junior team members in key conversations and decisions.

This all boils down to three things: putting the right people in the right jobs, having the right tools to do business, and then letting the workforce work in peace. Modernization should look at work to be done, not roles to be filled. Then consider how that work can be reduced for business value and ROI. What a transformation office would do is create capacity and bandwidth, which can be through business processes or through technology.

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Dana source: Grant Thornton Global