the finance enterprise transformation illustrated(tm)

The Finance Enterprise Transformation Illustrated™

ByEric K. Gaba, CMA®

A Systems Approach to Refocusing the Finance Function

Automated, Best-In-Class, End-to-End, Integrated, Lean, Simple,

Standardized

The ROI Advisory for Specialized Technological AdvancementEnterprise Transformation Experts 2016 ©


Table of Contents

Executive Overview……………………………………………………………………………….....pg3

The Finance Enterprise Value Stream Architecture™……………………………….…pg4

Attributes of the Enterprise Transformation Architecture Models™…………..pg5

The Risk Tolerance and Value Creation Quadrant™…………………………………...pg6

The Architecture of the Enterprise Transformation Maturity Model™……..pg7

The Model → Risk → Duration → Outcome Matrix™…………………………….....pg8

The Building Blocks of Enablers and Inhibitors™………………………………………..pg9

The Resource Calibration Triangle™………………………………………………………….pg10


Executive Overview

The emergence of the Enterprise Transformation discipline has created an enormous amount ofopportunity for both organizations and practitioners to leverage intellectual capital, technical andfunctional tools amongst other resources in order to unleash the synergistic values which areinherently interconnected and interdependent within the cycle of business activities conducted bya going concern.

The concept of a going concern is well defined within the financial arena as an entity which is inbusiness with the expectation to remain as such, whereas the definition of an enterprise andexactly what constitutes transformation, remains an evolving field of management research thatcontinues to examine the complex array of business activities intertwined with a diverse networkof digitally transformative systems and applications which enable organizations to achieve theirvalue creation objectives.

Within the above context, the Finance Enterprise as a part of an organizational value stream ofactivities, is also emerging as a strategic business partner with the capability to transform its corefunctions into a predictor and enabler of value creation.

The transformation process of the finance enterprise also continues to be an evolving field ofmanagement research and this publication attempts to formulate the pillars and the frameworkwithin which the finance transformation initiatives can be meticulously crafted and successfullyunleashed to harness value creation throughout the enterprise.

In a visually summarized and condensed format, this publication intends to contextualize andstructure the finance transformation initiative by introducing the key concepts of:

The Finance Enterprise Value Stream Architecture™ Attributes of the Enterprise Transformation Architecture Models™ The Risk Tolerance and Value Creation Quadrant™ The Architecture of the Enterprise Transformation Maturity Model™ The Model → Risk → Duration → Outcome Matrix™ The Building Blocks of Enablers and Inhibitors™ The Resource Calibration Triangle™

The author suggests that by systemizing these elements within a structured framework, theenterprise transformation leadership team of any organization will be well positioned to unleashthe synergistic values embedded in their transformation goals which will ultimately and effectivelydrive business performance to exceedingly higher levels surpassing pre-established expectations.

To hit the ground running with these concepts, contact me at [email protected].


Enterprise/ Entity

Structure

Consolidation Levels

Sub-Consolidation

Levels

Investment Centres

Revenues/ Profit Centres

Support Centres

Working Capital

ManagementCapex Management

Supply Chain Management

Inventory Management

Human Capital Management

Treasury/Tax Management

Operations Management

Policies & Procedures

IFRS/GAAP/ CHART OF

ACCOUNTS

Regulatory Environment

Internal Control/SOX Environment

The Finance Enterprise Value Stream Architecture (A Condensed Overview of the Meta Data Structure)

Corporate Sustainability Reporting (CSR)

Enterprise Performance Management (EPM)

Enterprise Risk Management (ERM)

Business Process Management (BPM)

Corporate Performance Management (CPM)

Corporate Governance, Risk and Internal Controls (CGRIC)

Customer Relationship Management (CRM)

Business Process Reengineering (BPR)

Transformation Cylinder

Enterprise Dashboard

Business Intelligence (BI)

System ProcessesAutomated, Best-In-Class, End-to-End, Integrated, Lean, Simple, Standardized

The Finance Enterprise Transformation Illustrated

i. The Transformation model is formalized with a comprehensive blueprint outlining boththe current and future landscapes.

ii. There is documentary of evidence of formal acceptance by all key stakeholdersincluding the board of directors, where applicable.

iii. The Entity demonstrates a low risk tolerance for system implementation hurdles.iv. The Transformation life cycle exhibits a long term maturity model with a high value

creation emerging from an effective and efficient execution of established objectives.v. Execution is precise and seamless. The project team is less likely to spin their wheels

while attempting to resolve issues.

i. The Transformation model is formalized with a high level summary blueprint.ii. Stakeholder buy-in and acceptance is reasonably assured without any evidence of

formal acceptance.iii. The Entity demonstrates a moderate risk tolerance for system implementation hurdles.iv. The Transformation life cycle exhibits a medium term maturity model with moderate

value creation based on established objectives.v. Execution is moderately precise with a low occurrence of wheel spinning to resolve

issues.

i. The Transformation model is generally understood and well communicated amongstkey stakeholder groups via a formal action plan.

ii. Buy-in and acceptance is anecdotal with varying degrees of expected outcomes and alack of documentary evidence.

iii. The Entity demonstrates a moderate risk tolerance for system implementation hurdles.iv. The Transformation life cycle exhibits a medium term maturity model with moderate

value creation as defined by the established objectives.v. Execution is moderately precise with a low occurrence of wheel spinning to resolve

issues.

i. There is general acceptance for the need of a transformation initiative.ii. Key stakeholders are conceptually convinced without a formal action plan.iii. The Entity demonstrates a high risk tolerance for system implementation hurdles.iv. The Transformation life cycle exhibits a long term maturity model with low value

creation.v. Execution is less than precise and the implementation team is plagued with a massive

issues resolution log accompanied by excessive wheel spinning.

[D] A Definitive and Structured Transformation Model:

[W] A Well Defined and Formalized Transformation Model:

[L] A Loosely Defined and Informal Transformation Model:

[C] A Clearly Defined and Casual Transformation Model:

Attributes of the Enterprise Transformation Architecture Models


Definitive and Structured Model

Definitive and Structured Model

Well Defined and Formalized Model

Well Defined and Formalized Model

Clearly Defined and Casual Model

Clearly Defined and Casual Model

Loosely Defined and Informal

Model

Loosely Defined and Informal

Model

Definitive and Structured Model Well Defined and Formalized Model

Clearly Defined and Casual Model Loosely Defined and Informal Model

High

Low Low

High

The Risk Tolerance and Value Creation QuadrantThe Architecture of the Transformation Maturity Model

Risk Tolerance Value Creation

Risk Tolerance Value Creation

Mo

der

ate

Mo

der

ate

Convergence


Definitive and Structured

Well Defined and Formalized

Clearly Defined and Casual

Loosely Defined and

Informal

The Architecture of the Enterprise Transformation Maturity Model

Low

Medium to Low

Medium to High

High

Value Creation

High

Medium to High

Medium to Low

Low

Model →Risk →Outcome → Matrix

Model Type Risk Tolerance

[D] Definitive and Structured

[W] Well Defined and Formal

[L] Loosely Defined and Informal

[C] Clearly Defined and Casual

Low risk tolerance for implementation hurdles.

Potential Outcome

Medium to Low risk tolerance for implementation hurdles.

Immediate and Effective Transformation.

Medium to High risk tolerance for implementation hurdles.

High risk tolerance for implementation hurdles.

Moderate Transformation and Value Creation.

Slow Transformation and Value Creation.

Delayed Transformation and Value Creation.

Risk Tolerance

The Finance Enterprise Transformation Illustrated ™

Model → Risk → Duration → Outcome Matrix

.

Model Type

Business Processes/

Control Environment

Risk Tolerance for

Implementation Hurdles

Risk of Delayed

Transition from

Current to Future

State

Duration of Project/Time to Maturity

Expected Outcome during

and after Transition Phase

Likelihoodof

unleashing Value Added

Synergies

[D] Definitive and Structured

Fully Optimized Low risk tolerance for implementation hurdles

Low risk of delayed transition

Long Term Immediate and Effective Transformation and Value Creation

Highly Likely

[W] Well Definedand Formal

Repeatable and Intuitive

Medium to Low risk tolerance for implementation hurdles

Mediumrisk of delayed transition

Short to Medium Term

Moderate Transformation and Value Creation

MoreLikely

[C]Clearly Defined and Casual

Managed and Measurable

Medium to High risk tolerance for implementation hurdles

Mediumrisk of delayed transition

Short toMedium Term

Incremental Transformation and Value Creation.

Less Likely

[L]Loosely Defined and Informal

Initial/Ad Hoc High risk tolerance for implementation hurdles

High risk of delayed transition

Long Term Delayed Transformation and Value Creation

HighlyUnlikely


Funding – Estimating the level of the financial commitment. Time Horizon – Assessing the time to maturity of the transformation model.. Intellectual/Human Capital – Talent Management, Skills and Competencies. The Transition Curve – Migrating from the Current state to the Future state. Interruptions/Down-time – Estimating the impact on routine operations. Level of Automation – Selecting the ERP/The Optimal Level of Integration. Workflows – Capturing the sources and flow of data. Regulatory Requirements – Establishing the framework for compliance. Business Process Reengineering – Carving out the Future State. Entity Structure/Design – Reconfiguring the foundation of the enterprise. Policies and Procedures - Leveraging proper authorization and authority. Blue Printing – Documenting the “AS IS” and the roadmap for the “TO BE”.

The Building Blocks of Enablers and Inhibitors


Establish the Transformation Leadership Team , Communicating and Overcoming

Objections Document Policies and Procedures,, Implement Change

Management Procedures, Stakeholder Buy-In and Acceptance, Procure Resources

Assess Requirements, Consultation, Design, Configurations, Blueprinting , Prototyping, Testing, Troubleshooting, Support

Mechanisms

Transformation Deployment and Systems Implementation

Pyramid of Resource Calibration

Future State Objectives: Optimization Agility Adaptability Flexibility Scalability

System Processes Automated Best-In-Class End-to-End Integrated Lean Simple Standardized

the finance enterprise transformation illustrated(tm)

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