How to optimize your finance team with people, tech, & structure

Everybody is currently struggling with resources. Because of inflation and a generally unstable environment, you can't really just go out and hire people.

I'm going to talk about how you can optimize your current team and make sure you can cover more ground with the teams that you already have.

Why are we here?

Popular topics in finance at the moment include optimizing cash flow, nurturing high-performance teams, and the evolution of the modern CFO. But how do you actually do these things in day-to-day life?

I’ve been a part of finance teams myself, and I know what it’s like when your boss comes to you and says, “We’re going to do ESG reporting,” or some other brand new task. Your existing work is still there, and you're piling on even more. That's just not sustainable.

I'm going to walk you through two case studies which are essentially client stories. I'll also talk about the frameworks that I’ve used to deliver these transformations and the key things to watch out for in terms of the framework.

Case study 1: Finance transformation

The first case study I want to talk about is finance transformation. This is where we changed the whole finance team. It was a multi-site, multi-country business. Each country had its own finance team consisting of two to four people, and they ended up having almost 25 to 30 finance professionals in FP&A.

But they weren’t exactly doing the FP&A work. It was muddled-up work with no clear focus. So, the ask was to reduce the cost (as they couldn’t afford 25-30 people), create specialization, support strategic design, and create efficiency and effectiveness of the finance function.

First, we created an entire list of activities done by the finance professionals. We then segregated these activities between controllership and FP&A, what maintained activities and statutory activities were being done.

Finance leaders need to understand that to specialize between teams, you need to first be aware of what activities are being carried out, and that needs to be segregated between teams so each team can specialize in what they do.

We then put in a data hub, which meant that all data came from a single source, and all the data was then reconciled to the mandatory statutory books as well as the management books, and the numbers were always consistent.

The result was that we improved the visibility of financial metrics and saved costs because we reorganized the teams and were able to redeploy some of the resources in other functions and organizations. We sped up strategic decision-making because the data was available so easily. You were able to make financial decisions by negotiating with third-party distributors and external warehouse people.

The clarity of people's careers was improved as well. Even the individuals who were moved around were put in roles that they actually enjoyed. Therefore, they were very clear on what their career paths were, instead of having a vague, generalized job title.

So, that was a large transformation project where we identified processes, assessed people, and deployed technology to transform and deliver results that were necessary for the business to progress.

Case study 2: Reporting and analytics

Now, I’ll take you through another example which was delivered very recently for a customer. A board deck was taking over seven working days to put together. Everything was in Excel, and formulas were being updated manually to calculate a ruling average of revenue.

This resulted in so many errors. When we took up the project, we were able to point out to the client that last month they’d forgotten to update the formula and the previous month’s KPIs were reported wrongly to the board.

So, the ask was to automate as much as possible, release time and resource for better analytics so they could create a better commentary, provide a connected picture of the business, and implement KPIs we thought were appropriate for that particular business.

We implemented Power BI and Excel, but Excel was connected to Power BI, which meant there was no manual updating of any formulae. All calculations and data sat in the Power BI environment.

We redesigned a dashboard for KPIs and decision support so that the board could actually have a specific conversation rather than just have a bunch of data and numbers thrown in their faces.

Before, they were taking seven days to gather and validate the data and put it in tables and graphs. That became basically less than two minutes to do. You opened the deck, hit refresh, and all your numbers were the latest numbers. And that was it, you're done.

The instant feedback from the finance director was, “Every month, I was adding commentary, but after seven days of laborious work, I was so tired that I’d just put in something that was okay and get on with it. Now, I actually have time to understand the performance, ask questions to other functions in the business, and provide insightful commentary.”

For me, that was the best customer feedback we could hope for because not only was it accurate, but it improved staff motivation, enabled more future-focused conversations in the business, and there was more time for better, insightful commentary.

But to achieve this kind of process and these kinds of results for our clients, we operate using a certain framework.

The Ways of Working framework

The framework which we operate under is called the ‘Ways of Working.’ We’re constantly focused on our clients in terms of how they’re delivering their analytics, reporting, budget, and forecast.

How are they doing business partnering? What are the touch points? What are the decision-making conversations that they’re having within the business? What are the challenges they’re facing? How are they looking to save money? Are they looking to expand revenue? Are they looking to improve margins?

The framework in which we operate is people, organization, and technology. We believe these three interact; people use technology and processes to create data. You get multi-layered data and multi-dimensional information, and that needs to be managed correctly for the business to be able to actually work and look forward.

That data then supports your performance management and compliance with your auditors, controllership teams, and statutory reporting, and that needs to be done in an efficient and effective manner.

This is the whole picture coming together of taking people, the organization, and technology, understanding the data they’re producing, and making sure that that data supports statutory performance management and the effectiveness and efficiency of the business.

So, let's understand how exactly you do that. What's the magic sauce?

People

Firstly, focus on the people. There are technical skills that you need to get a job in finance, whether it’s in accounting, FP&A, or controllership:

Accounting knowledge
Excel/tech skills
Budgeting/forecasting skills
Business acumen
Financial modelling
Analytical abilities

These are the soft skills you need:

Communication
Presentation
Organization
Negotiation
Empathy
Adaptability

We also talk about attitude. Attitude is comprised of two things: one is personality and another is energy for impact.

There are tools out there that can be used to assess people's personalities. MBIT or Myers Briggs is one of my favorites. It asks questions like:

Are you outwardly or inwardly focused?
How do you prefer to take information?
How do you prefer to make decisions?
How do you prefer to live your outer life?

This is what you can use to manage a person correctly and keep them from being demotivated. It doesn't necessarily mean that it will motivate them.

For that energy for impact, we prefer the GC Index. There are five personality types, which include:

Game changer
Strategist
Implementer
Polisher
Playmaker

It uses dimensions like:

Are you a pragmatic person or are you an obsessed person?
Are you imaginative or are you action-focused?

What this index then helps you as a finance leader understand is what really motivates your team and brings out their best work. And if you use that correctly, then you can actually deploy people in the right manner within your business.

Understanding their personality and what motivates them gives you a clear picture of their attitude, which means you can then deploy them correctly within the business to maximize the value they add.

If people have communication skills but they’re much more introverted, then you want to make sure you're not putting them in too much of a public space which makes them uncomfortable and makes it awkward for them.

Make sure that their personalities and their motivators are correctly complemented with the structure that you're giving them within the business. That's something that we consistently work with our finance leaders on to help them understand.

Technology

The next thing that we always talk about is the technology stack within finance. This is the piece that most finance leaders get quite easily.

There’s an ERP, which has your finance packages inside it, there’ll be some sort of a CRM, an HRM/headcount mechanism, there might be timesheet data, other customer information, or other project-based information that they’re holding on to.

They have all this information, but there’s nothing that’s connecting the dots together.

They also have this beautiful vision. For example, they want to close month-end in three working days, they want detailed reporting and analytics, they want storytelling, they want to manage performance, they want to do driver-based budgeting, scenario planning, and all these wonderful things.

The problem you get is that’s a strategic view. How do you connect it?

Currently, 80 to 90% of FP&A functions are mainly Excel-focused. So now you're taking this level of data, these millions of rows, and trying to figure out how you analyze all of this information and do the reporting and analytics. You can't. It's just not physically possible.

Accounting and controllership need their ERP, just like sales needs their CRM,

FP&A needs its own environment, which is basically EPM and BI focused for them to be able to deliver the strategic vision of the leadership

This is what we consistently find is missing within businesses. COVID has really helped to highlight this because as more people have started working from home, this awareness that Excel is just not going to cut it is increasing within financial leadership.

But you still get businesses thinking, Okay, if I implement a BI solution, my analytics will be sorted, or, If I implement a CPM or EPM solution, it’ll be sorted. It won't until you have your technology architecture clearly defined and a clear flow of data with a vision of, These are the items I want to analyze, this is the performance management I want to do, this is the driver-based budgeting I need to do.

Until you have that end-to-end clarity of the strategic view driven by the CRM or other drivers over here, you’re going to struggle as a finance function.

So, having a proper architecture to interact with is critical for businesses to be successful with this, and we’ve consistently seen where we’ve implemented this correctly. Businesses have actually reduced the timelines for reporting and forecasting and improved decision-making.

Org structure

The third pillar is organization structure. A function needs to be built around creating some sort of data hub, somebody who’s responsible for consistent data that’s reliable, accurate, and connected, preferably not only within finance, but finance collaborating with other functions in a connected and collaborative manner.

There should be a bunch of individuals responsible for ensuring data is available correctly. That’ll create operational accuracy of the data you have, which then can be used by controllership, FP&A, performance management, and treasury to drive better decision-making, better decision support, and better analytics.

This means you can have a statutory and compliance arm at a strategic level, and provides you with the ability to look forward and be a strategic leader.

For example, you don't need to wait until the month-end to find your sales and then go to the sales leader or marketing leader and say, “We’re missing our forecast. What are we going to do about it?” You could do that in week one or week two of the month, and that way you can turn the volume up or down on what they need to achieve within the quarter or the month.

It’ll then become a preventive and proactive activity rather than a reactive activity, which is after the month-end or quarter-end.

So, that’s the reason why the org structure is also very, very important, where controllership, FP&A, and treasury are supported correctly so that you can drive future ways of working.

If you get the people, technology, and architecture correct, that’s when you’re now in a future-focused finance function that’s actually driving decision-making correctly and is able to add value. Rather than driving your car looking in the rearview mirror, you can start running your business car by looking through the windshield, and that’s what you want to do.

How to optimize finance teams through people, technology, & structure