CFO strategy

Shape the future of your finance function with the right target operating model

Transformation needs a strategy

New technologies and digital business models are fundamentally changing the demands on finance functions. To make the best possible use of these new developments, companies need to evaluate and realign their finance operating models. To reduce complexity, companies need a specific target vision to aim for – a target operating model (TOM). The transformation according to TOM is carried out on the basis of a roadmap with concrete individual steps.

The CFO strategy includes the future direction of the finance function as well as the transformation in the dimensions. 

The ultimate goal of finance transformation is to develop your finance function into a strategic business partner, focusing on future opportunities and risks. As a strategic business partner, the finance function shapes the future development and growth of the company providing management with data-driven insights and recommendations for action derived from these insights.

This new role strengthens the CFO's position in the company - especially in view of a world characterised by volatility, uncertainty, complexity and ambiguity (VUCA). Covid-19 is the most recent example of this 'VUCA world'. The bumpy ride has shown many companies that they are only at the beginning of implementing digital opportunities in the finance function and that they are still a long way from Finance 4.0.

In order to fully exploit the opportunities offered by digital transformation, companies need to evaluate and realign their finance TOM. This enables companies to achieve huge cost savings and efficiency gains. At the same time, they need to develop agile finance teams to quickly react to and shape new business models: these teams will be crucial for business success.

Our services at a glance

Strategy and vision

  • Defining a strategy and a vision that are aligned with that are in line with and positively influence the business strategy
  • Defining the future vision of the finance function with a focus on business partnership and advanced analytics to enable and drive data-driven business decisions

Organisation and governance

  • Developing a comprehensive governance model  that translates strategic objectives into measurable goals and strengthens staff accountability.
  • Developing the right organisational structure that enables effective collaboration between the four key components of the finance function – business partner organisation, centre of excellence (e.g. for advanced analytics), operations (shared service centre), and governance and compliance

Shared service centres

Shared service centres are a key component of any future-ready finance function, especially when developed to provide global business services. Centralising and standardising your transactional processes enables your finance function to make huge efficiency gains while also improving service quality. But relocating complex, knowledge-based tasks isn’t just an opportunity for your finance function: integration of further functions (e.g. purchasing, sales) enables you to lay the foundations for process-driven organisation.

Global business services also act as a catalyst for digitalisation, as intelligent use of digital technologies such as RPA and artificial intelligence (AI) increases levels of automation. Technologies like these can be directly anchored into global business services as centres of excellence.

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Process architecture

  • Embedding end-to-end process visibility into the finance function, to constantly optimise cross-departmental processes through a continuous improvement process and to offer the best service to internal and external customers
  • Designing an effective, efficient process landscape, supported and automated by suitable technology and without any organisational silos

Data and technology

  • Positioning the finance function as a catalyst for digitalisation through the implementation of technological innovations and digital optimisation of services
  • Encouraging data-driven business decisions by using predictive analytics – hereby increasing the finance function's strategic influence

Employees and culture

  • Identifying all required roles and skills of staff  to implement  the elaborated strategy
  • Introducing digital upskilling initiatives to foster an agile, innovative culture to empower staff to meet future demands

“CFO strategy has to fulfil the essential role of identifying demands on the finance function – not yesterday’s demands and not today’s, but those of the future. Companies can only embark on this journey today if they have a clear target in sight.”

Gori von Hirschhausen,Finance Consulting Leader Europe at PwC Germany

Off to a good start

A digital TOM is helpful for implementing the defined strategy and vision in the organisation. The challenge is to consider possible changes and scenarios today – and the technologies for addressing them – that might occur tomorrow.

To react appropriately to the increasingly complex business environment, companies often press ahead with isolated improvement projects. However, such improvements can only be sustainably effective if an integrated TOM brings together the multiple dimensions of the finance function and the business.  It is this process that makes current technological and economic changes tangible.

TOMs comprise a complex target operating model with various dimensions. It is therefore recommended to develop a roadmap to prioritise the individual areas of action. For this purpose,  not only the strengths and weaknesses of the own company need to be considered, but also the risks from competition and possible future challengers. The roadmap provides a concrete plan for the transformation of the finance function.

Step-by-step implementation

Along the roadmap, the finance function can be developed successively according to the defined TOM. Since not all projects can be implemented at the same time, they are to be prioritised.. Dependencies on other projects also need to be taken into account. Sustainable change management is the most effective way of guiding the implementation process, as the employees will only embark on this journey if their managers succeed in allaying any fear of change and its consequences.

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Contact us

Gori von Hirschhausen

Gori von Hirschhausen

Finance Transformation Leader, PwC Germany

Tel: +49 89 5790-6698

Arne Weuster

Arne Weuster

Director, PwC Germany

Tel: +49 201 438-1204

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