To successfully achieve autonomous finance objectives, Gartner says finance transformation leaders need to ensure other finance leaders fully understand the scope of changes that genuine transformation requires.
The technological research and consulting firm observes that finance transformation efforts are falling short of CFOs’ objectives in large part because finance leadership has not articulated a vision for its future operating model at the beginning of the initiative, which means using an operating model framework that will help orient stakeholders to all the pieces of large transformations.
It is then only fitting that finance leaders deeply understand why finance needs a new operating model and why autonomous finance should be a focal point of this new operating model.
Additionally, it is important that CFOs know the main components of an autonomous finance operating model.
Digital technology investments
"Many CEOs feel that their company’s digital technology investments do not meet expectations in terms of time to complete and time to realise value," says Emily Connelly, senior research director in the Gartner Finance practice. "If we accept, for argument’s sake, the premise that attempts to modernise the finance organisation with digital transformation initiatives also tend to disappoint, we can lay at least part of the blame on the absence of an operating model designed by the finance leadership team that clearly sets out which principles will guide decisions and trade-offs in the journey towards autonomous finance."
Connelly points out that finance transformation leaders struggle to get other finance leaders to think in the context of the entire operating model when planning transformation simply because most finance organisations have not defined one.
"Planning the future autonomous finance operating model will significantly increase finance leaders’ shared understanding of where their function is now versus where it is headed, and this alignment will result in clearer objectives for how to make transformation successful."
The need for autonomous finance is palpable, as within an autonomous finance environment, finance teams can deliver valuable insights to decision makers, find innovative ways to use analytic resources, and connect business problems to the data to help inform better decisions.
Core elements
Connelly concedes that getting finance leaders to make hard decisions about these operating model elements to unlock value from finance technology will require a different approach to discussions about technology and organisational structure.
This is because most finance transformation initiatives focus too heavily on technology or organisational structure and underinvest in other categories of operating model decisions.
Categories of operating model decisions
To help CFOs and transformation leaders formulate a comprehensive operating model, Gartner experts have outlined the categories of operating model decisions.
Finance transformation leaders should select, alter, or add to these as they work with the rest of the finance leadership team to plan a transformation.
- Ways of Working: Includes more collaborative and transparent approaches to work, behaviours, informal workflows, team customs and the adoption of methods such as agile and lean.
- Decision Rights: The decision rights that key stakeholder groups have for executing the strategy address who makes decisions, how decisions are made and how disputes are resolved.
- Talent: Employees’ competencies, skills and profiles needed to execute work in the operating model.
- Organisational Structure: Definition of the organisation structure, key roles and reporting relationships, and collaborative networks.
- Tools: Key tools and assets required for teams to perform their responsibilities.
- Financials: How finance will be funded; how budgets will be allocated, planned and monitored; how costs will be recovered or priced; how investment is aligned to strategy.
- Performance: The approach to performance management to ensure the strategy and ongoing operations are effectively executed and continually improved.
- Sourcing and Alliances: Sourcing defines the approach to outsourcing and partnership with third-party service providers. Alliances define the necessary partnerships and how to ensure they create value.
- Places: Where in the world people and key assets are located. Includes a more granular view on office location and reflects the changing ways of working, such as hybrid work. Can extend to cover the enhanced collaboration through exploitation of the digital workplace.
