The Finance operating model is changing. Finance leaders are moving toward a more open approach, which can include innovative provider strategies and technology. By using this framework, companies can better serve their customers and achieve greater business results. But how do you get started? The first step is determining your business objectives. Those goals will shape how your organization organizes its resources.

Structure

A finance operating model helps finance executives define, design, and implement the change they need to make. It has been used successfully for many companies. The team can answer any questions you might have about this process. The structure of the finance department should be in line with the company’s overall strategy. In addition, it should align with company governance and resources.

Finance professionals should understand that they should work as part of a wider ecosystem with the rest of the company and outside partners. The structure of the finance organization should be able to change and grow in parallel with the changes in the business. In some cases, this may mean creating a new role for finance staff. Some of these new roles will require a different skill set.

As a company grows, the role of finance department becomes increasingly important. Typically, a company’s finance department adopts a divisional organizational model that has a double hierarchy. The finance department is headed by a chief financial officer and has several sub-departments that each have their own roles and responsibilities. Each division has a controller and a deputy financial officer.

Finance leaders should focus on balancing long-term value creation with near-term efficiency. This will ensure that the Finance team can focus on the value-added activities and increase enterprise value. The balance between the long-term and near-term value creation should be carefully considered when deciding on a new structure for the finance department.

Capability

A finance capability model can be both an execution and strategic tool. The capabilities map at the level of business units and processes provides strategic information while the capabilities at level 3 and higher are focused on execution. A capability-based model helps prevent ambiguity, foster transparency and provide clarity. Further, it can be used to influence the services landscape. It can also help compare and evaluate vendors.

Organisational structures are shifting toward different capabilities rather than functional silos. The size of team members is also evolving. Increasingly, a’static workforce’ is being replaced by flexible and agile teams of generalists. The new model can support the evolution of finance and ensure that it can remain relevant in an increasingly volatile environment. It also enables the finance function to support strategic decisions in real time. By creating a capability-based model, businesses can improve processes and leverage technology.

An operating model must enable a business to operate efficiently and effectively. It should be capable of covering all the essential functions of the business. It should be future-proof, as it should recognize the need for continuous innovation. In addition, it should be flexible enough to accommodate the capabilities of different asset classes in the future. A finance operating model should be able to generate business insights, provide efficient operations and support high-level, specialised capabilities.

The finance operating model should also be aligned with the company’s strategy. A well-designed model will enable a company to focus on the top priorities and leverage global capabilities. For example, a global pharmaceutical company delineates non-core operations and focuses its resources on the core. This enables a company to cut down on costs on the non-core capabilities.

Workforce

Workforce management is an essential component of a company’s business strategy. In today’s world, securing talent is harder than ever. While a traditional employment model may be an attractive alternative, a contingent workforce can be equally attractive. By synchronizing the recruitment of the professional contingent workforce with talent acquisition, companies can achieve significant advantages.

The OpsFM model empowers operations teams to be financially accountable. This approach is particularly appropriate for environments where labor costs vary widely. It unites Finance, IT, and Operations around common performance goals. As a result, employee engagement and labor cost are central metrics across these three functions. Human Resources is also often integrated into the OpsFM team.

The workforce in finance is changing, as are the requirements for talent. The pace of digital transformation, global risks, and other forces are altering the way that finance is organized. Finance executives will increasingly be virtual, mobile, and collaborative. They will use social media and crowdsourcing to collaborate and solve business problems.

Leading finance functions are investing in training and development, both for the technical and soft skills of their workforce. The transformation of the workforce is a key step in the evolution of finance. While investment is crucial, it is also essential to measure ROI. This will increase buy-in from top management and improve engagement within the workforce. As a result, leading organisations are not only measuring how their workforce contributes to the organisation’s success, but also the impact they have on the culture and ways of working. Furthermore, they are also considering how employees’ well-being and engagement influence the organisation’s financial goals.

Finance leaders are rethinking their operating models to meet these changing demands. They can also leverage new technologies and provider strategies to achieve their goals.

Digital transformation

With the advent of digital technologies, finance functions need to evolve and modernize to stay competitive. The CFO’s role in this transformation is crucial. He or she has a responsibility to evaluate initiatives and provide resources. Today, the CFO plays a data-driven role in the business area. Data lake is one example of how the CFO can leverage data collection to support financial and nonfinancial analytics.

Digital transformation can solve many of the issues that are holding back finance teams. But it requires more than new technology. A successful transformation rethinks processes and people to create value and drive performance improvement. If your team is up to the challenge, here are some of the steps you can take to make your finance organization digital.

First, finance professionals must consider how their organization functions and its customers interact. This means integrating operational improvement efforts around customer-facing journeys. In addition, finance professionals need to explore new ways of building relationships, launching new products and business models, and using behavioral science and enhanced data analytics to improve performance.

Second, CIOs must understand how technology can drive business success. CIOs have an increasing responsibility to drive revenue growth. They are responsible for implementing and adapting the company’s digital strategy. Often, the CIO must also rethink his or her role within the business. They must become more creative, take risks, and be comfortable with failure.

Lastly, finance and accounting leaders need to be flexible and embrace change. Digital technology can improve business processes and make people more productive. Achieving this requires a balance between different priorities and making the transformation a way of life. A successful transformation requires a clear, strategic roadmap and a strong support from the top.

Talent

The emergence of agile working practices and a focus on leveraging talent has changed the nature of the finance function. Organisational structures are evolving away from functional silos and towards cross-functional teams of different capabilities. The size of teams will also change and the proportion of’static’ staff will diminish. A finance operating model that harnesses the skills of diverse talent will allow the Finance function to be agile and respond to volatility.

Talent management has a significant impact on organizational productivity, employee engagement and creativity. A robust talent management system can help organizations improve the way they manage talent. To build a talent management model that is aligned with organizational goals, Cielo can assist with design consultations and business case development. Our experience has helped HR functions redesign their service delivery in order to better serve their business.

As global business services, global finance activities, and shared services change, the traditional talent equation has become more complex. This has led to a shift away from the ‘war on talent’ approach to a talent development model. Talent is not simply a set of skills; it is also a combination of experience, attitudes, and behaviors.

While technology plays a critical role in the modern finance operating model, finance leaders need to develop talent with “soft” skills, such as data analysis, visualization, and business acumen. Such skills are essential for rapid decision-making, and require more than just the traditional finance skills. By reducing the reliance on IT, finance leaders can improve the efficiency of the finance function and make it more dynamic.