3 pillars of finance transformation you need to get right

When it comes to finance transformation, change is constant. Over the last few years, I’ve had the privilege of diving deep into this area, both learning and implementing changes within the finance function at HP, Inc.

In this article, I’ll share what I’ve learned along the way, from the interconnected pillars of transformation to the importance of culture in driving real, measurable outcomes.

What transformation means to me

Transformation is a word that gets thrown around a lot these days. Whether it’s setting up a transformation office, implementing new technologies, or adopting AI and machine learning, everyone has a different take on what “transformation” actually means.

For me, transformation is all of this - and more. It’s not just about shiny new tools or reacting to tough economic times. Transformation is a constant, essential process for staying competitive, no matter the external circumstances.

One misconception I often hear is that transformation is only necessary when things are going south.

I completely disagree.

Whether your industry is booming or facing challenges, transformation should be a priority.

Why?

Because it’s not about reacting to bad times - it’s about constantly evolving to stay ahead. For me, transformation boils down to three key elements: sustainable competitive advantage, structural change, and measurable outcomes.

Let’s break each of these down.👇

1. Sustainable competitive advantage

At its core, transformation should give your business a competitive edge. Here’s an example: Imagine you’re in an industry where commodity prices fluctuate wildly.

If it takes your company weeks to adjust your pricing to reflect those changes, by the time your new prices hit the market, conditions may have already shifted. In contrast, a company with real-time systems that can adjust pricing almost instantly will have a major advantage over you. That’s what I mean by sustainable competitive advantage.

Transformation isn’t just about implementing the latest technology, it’s about using that technology to gain an edge. Whether it’s faster decision-making, more accurate data, or improved processes, the goal is to stay ahead of your competitors.

2. Structural change

Structural change is another critical component of finance transformation. It’s not just about temporary adjustments; it’s about fundamentally changing how your business operates.

The COVID-19 pandemic is a perfect example of how structural changes can make or break a business. Some industries, like aviation and hospitality, suffered greatly, while others, like tech companies, thrived.

Companies like Zoom and DocuSign didn’t just adapt during the pandemic - they made structural changes to how they operated. These changes allowed them to continue thriving even after the world started to return to normal.

The lesson here?

Transformation should create lasting, structural changes in how your company operates, not just temporary fixes.

3. Measurable outcomes

If you can’t measure the outcomes of your transformation efforts, how do you know if they’re working?

For any transformation to be successful, you need clear, measurable outcomes. Whether it’s reducing the time it takes to close your books or improving customer satisfaction, setting concrete goals is crucial.

Too often, companies embark on transformation journeys without defining what success looks like. This leads to projects that never fully deliver on their promises.

By setting measurable goals, you can track your progress and ensure that your transformation efforts are actually making a difference.

3 pillars of finance transformation

Now that we’ve covered the three key elements of transformation, let’s talk about the concept of interconnectedness.

For any transformation journey to succeed, three main pillars - people, process, and performance - need to work together. These pillars aren’t separate; they’re interconnected, and if any one of them is out of sync, the whole transformation could fail.

Let me walk you through each pillar in the context of a case study I’ve been part of.

People

No matter how great your technology is, it’s the people who will make or break your transformation. If your team isn’t on board with the changes, the project is destined to fail.

It’s not just about training people on new systems—it’s about showing them the benefits of the transformation and how it will make their jobs easier.

In my experience, one of the biggest challenges is getting everyone aligned. You need to bring your people along for the journey, ensuring they understand how the transformation will benefit them personally. If they don’t see what’s in it for them, they’re less likely to fully engage with the process.

Process

Process inefficiencies are often the root cause of business problems. If your processes are outdated or unclear, no amount of technology will fix that. In fact, implementing a new system without first addressing process inefficiencies can actually magnify the problems.

Before you invest in a new tool, make sure your processes are well-documented, tested, and efficient. I like to call this step "paper tiger testing"—you may have fancy documentation, but if you haven’t tested your processes in practice, they might fall apart when put into action.

Performance

Finally, let’s talk about performance. When implementing a new system, it’s crucial to define your performance metrics upfront.

For example, if your goal is to reduce the time it takes to close your books from 14 business days to four, make sure you have a clear plan for how to achieve that. It’s not enough to just implement the tool - you need to measure the impact it’s having on your performance and make adjustments along the way.

Case study: Implementing a new planning tool

Now let’s bring all these concepts together with a real-life example. Imagine you’re tasked with implementing a new planning tool at a billion-dollar company. The goal is to move from spreadsheets and manual processes to a more automated, efficient system.

Step 1: Reference check

Before jumping in, do a thorough reference check. Talk to other companies who have implemented similar tools and get feedback from the users, not just the executives. This will help you avoid common pitfalls and set realistic expectations.

Step 2: Define Performance Metrics

Set clear performance metrics from the start. For example, if it currently takes 14 days to complete a planning cycle, your goal might be to reduce that to four days. Make sure these metrics are realistic and that everyone on the team understands what success looks like.

Step 3: Prioritize

When implementing the tool, don’t try to do everything at once. Focus on the most important aspects first, whether that’s the 12-month planning cycle, quarterly forecasts, or something else. Trying to tackle everything at once will only lead to frustration and delays.

Step 4: Iterate and adjust

No transformation is perfect on the first try. Once you’ve implemented the tool, be prepared to iterate and adjust. Listen to feedback from your team and make changes as needed.

Transformation is a journey, not a one-time event.

Culture: The hidden driver of success

I can’t talk about transformation without mentioning culture. There’s a famous saying: "Culture eats strategy for breakfast." In my experience, this couldn’t be more true. No matter how great your strategy is, if your company culture isn’t aligned with your transformation efforts, the project will struggle.

Culture isn’t something you can write down in a document—it’s something you experience. It’s the unspoken rules that guide how people behave, make decisions, and interact with each other.

When embarking on a transformation journey, make sure you take your company culture into account. How do people respond to change? Are they open to new ideas, or do they resist them? Understanding these cultural dynamics is key to a successful transformation.

Final thoughts

To wrap things up, successful transformation requires a holistic approach. It’s not just about technology or processes—it’s about bringing people along for the journey, making structural changes, and setting measurable goals. And don’t forget about culture—it’s the glue that holds everything together.

If you’re embarking on a transformation journey, my advice is simple: define what transformation means to you and your organization, focus on interconnectedness, and always keep an eye on culture.

With the right approach, you can turn any transformation into a sustainable, competitive advantage for your business.

People, process, performance: The 3 pillars of finance transformation