Leading finance executives share how they are transforming their organisations to become future ready – building the necessary capabilities to help ensure they prosper in a rapidly changing business environment.
From providing critical insights to inform business decisions, to preparing for new ways of working, leaders of complex organisations outline how they are becoming a force for innovation within their enterprises.
Hao Qian, General Manager, COP Reporting and Industrial Strategy
Nissan Motor Company (Nissan) presents a compelling example of the benefits of automating manual processes to reduce labour hours and increase output quality. The company recently undertook a technology-enabled redesign of its monthly process for calculating the profitability of its products by model and operating region, leading to enormous benefits.
“We used to do everything manually,” says Hao Qian, GM, COP Reporting and Industrial Strategy at Nissan. “Our regions would send hundreds of spreadsheets to our head office, and data was not always entered consistently. We would spend an enormous amount of time manipulating the data and then would manually distribute reports in an inflexible format.”
Relying upon leading EPM software, Nissan compressed cycle times, reduced errors, improved the quality of its reports and, perhaps most importantly, freed its headquarters staff to concentrate on value-added analysis instead of data processing. Rather than looking to headcount reductions with the hours it saved from implementing the new process and technology, it moved three of the 19 staff members involved in the financial consolidation process into full-time data analysis roles. Nissan is now undertaking a similar redesign of its sales and marketing reporting.
“Don’t start with the current process and think about how you can improve on it,” advises Roberto Delgado, Nissan VP of Global Revenue Management. “Instead, identify the end state you are trying achieve and think backwards. Having a vision of the ideal process is the only way to identify the best possible scenario given resource constraints.”
As part of a more comprehensive business process transformation, Leggett & Platt, a diversified manufacturing company, has fundamentally rethought its global financial planning and demand planning processes, with a focus on standardisation, increasing data quality and providing higher quality analysis and insights.
Over the years, Leggett & Platt has made a number of acquisitions. As a result, explains Ryan Fathers, VP of Finance, Leggett & Platt Automotive, “Everyone came to their own conclusions on how they should put together their forecasts, annual operating plan and 5-year strategic plan. This lack of visibility into how different units generated their numbers made it very difficult to do any sort of advanced analysis. We had a homegrown, Excel-based approach with no consistency.”
The technological foundation of Leggett’s redesign rests upon a standardised, cloud-based ERP system, a supply chain management platform that incorporates predictive analytics, and an external market data feed, all integrated with one another to enable financial planning, demand forecasting and opportunity analysis.
“We’ve been a collection of controllers over the years,” adds Fathers. “What we need to do is evolve into a true financial planning and analysis function, where we act as business partners that understand more than just the journal entries and reconciliations, and provide value-added analysis and business recommendations using advanced tools and standardised databases.”
While Leggett is still in the process of fully implementing its redesign, it has already begun to see a marked change in its culture and the ways it evaluates its business performance. “We’ve seen a shift in mindset on how we should collect our data and analyse it, how to think about our business and how we talk about it to the investor community.”
The finance function of WNS Global Services, a leading business process management company having its presence in more than 13 countries with more than 41,000 employees, has made a concerted effort to expand its role beyond its traditional control and reporting responsibilities to become a value-added business partner. Its experience helps to illustrate some of the challenges and benefits of this journey.
“Typically, finance functions toggle between the transactional and strategic aspects of handling change and transformation”, says Sanjay Puria, CFO of WNS, “which is why we went beyond mere financial decision-making in shaping our global strategy. In close collaboration with the business, WNS’ finance function is focused on enabling holistic business transformation.
“Our finance function stands at the cusp of digital inflection enabled by a robust operational arm,” says Puria. Accordingly, WNS is developing three broad capabilities— domain expertise, technology and analytics—as it concentrates on non-linear growth, people development, location expansion and maximising billability. WNS has implemented automation technologies in multiple areas including performance reporting, treasury, seat capacity management; created a data warehouse; and undertaken a comprehensive change management and retraining program to upskill its employees and instill an analytics-based culture.
One of the greatest challenges that WNS Finance effectively managed, says Puria, is the cultural transition of their staff and business partners. “Whenever you automate a process, employees will naturally wonder what’s going to happen to their jobs. You need to give your team the comfort that you are willing to invest in them to make them future-ready.”
This cultural shift involved resetting expectations among members of their function regarding the types of information they needed to deliver. “We let them know that simply comparing budget versus actual is not analysis,” he says. “Instead, we emphasise aspects such as outliers, early warning signals, and trend analysis including descriptive and predictive analysis.”
One key to success, Puria says, is collaborating with business partners to define new analyses and business performance systems. “We have a complex structure, with a mix of industries, services and geographical presence from the delivery perspective. Different constituents want to look at their business in different ways,” he adds. Appropriately, WNS’ finance team designed a partner toolkit with automated budgeting, pricing analytics, ‘what-if’ analysis, and accurate revenue forecasting systems. Other innovations include next-generation asset and capacity management, smart receivables and treasury management, and end-to-end accounts payable automation. It is, as Puria describes, “a total transformation to insightful action boards.”
While Puria acknowledges that there is some work left to be done, WNS has already seen tangible progress on its efforts. “The traditional approach in finance will no longer work” says Puria. “To succeed, we need to make ourselves future-ready. This will be a two-to-three-year journey, but we are already seeing results in driving revenue and profitability growth and helping our business partners make better decisions. The big differentiator,” he adds, “is that it has been a structured journey rather than a big bang implementation.”