The FP&A Trends Webinar: Mastering Analytical Transformation with FP&A Trends Maturity Model
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The FP&A Trends Webinar: Mastering Analytical Transformation with FP&A Trends Maturity Model
Click here to view details and register
By Alexey Jodzishsky, Solutions Architect at ALGOne Solution
Being adaptive to changes in the surrounding world and changing yourself is the only way to progress today. Continuous transformation of planning and analysis approaches becomes a lifestyle. Digital Transformation forms a fundamental part of it. At the same time, changes bring risks and the only way to manage them is to be prepared.
There are plenty of different definitions of “Digital Transformation”. The one I liked most is “using digital technologies to remake a process to become more efficient or effective”. It is, however, absolutely clear that digital transformation is not just about technology, it is about processes, people, and a business strategy first.
According to Harvard Business Review, digital transformation is the highest risk in eyes of senior management. About 70% of DT initiatives did not reach their goals. Of the $1.3 trillion spent on digital transformation programs in 2018, $900 billion estimated as wasted. Similar figures are shown in McKinsey report.
Here are some key reasons of IT projects failing according to The Standish Group Report (2014)
FP&A is naturally a leading area in transformation processes and as a result has the highest risk in digital programs implementation. Following two fundamental principles will help to avoid or at least reduce such risks – business ownership in preparation and business ownership running the transformation.
Below a few points to help identifying an ownership for a change:
Looking at these points, is it difficult to answer one question: Who should drive the transformation – yourself or people coming from outside?
To achieve success in digital transformation of planning and analysis, companies must focus on ground preparation work which includes:
Years of experience and many successful transformation programs show that a journey can be outlined by following three practical steps taken by a business:
The key for success is to expand a level of knowledge in an organisation far beyond technology upgrade or new system build. Without discarding the importance of technical knowledge, the aim is to build understanding and involvement of all levels of the business in a transformation, buying into its values and seeing their role in a new business structure.
By closing gaps between strategy, operational management, and technology, you will create a fully balanced and low risk approach to successful Digital Transformation.
Finance information climate review
This review is covering current information systems use in the organisation.
Information provided by this review will allow to assess how the technology is aligned with business goals and needs to support company’s financial control and planning.
Digital education
As any professional area, the implementation of information systems requires special skills. This must be executed by professionals. However, an understanding of base principles and rules by business owners of the programs will massively improve an efficiency of a project. Following areas should be clear to all the participants:
Inception stage guide
Most of the program’s risks are generated at the start. By introducing an inception stage to the project risks may be reduced by:
With this information in hands program can avoid time waste and additional cost by waiting, resolving unknowns, and gathering missing information.
The transformation is an integrated process touching all areas of your company life. Being on the front line of business digitalisation (financial data analysis and management is always a high priority), FP&A departments are also setting an example of implementation processes. This makes Finance not only information and data provider across an enterprise but effectively a centre of excellence in collaborative work between business and technology streams.
Following this road, Digital Transformation will undoubtfully bring an organisation to leading positions and make it stronger and more flexible in a constantly changing world.
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