Getting started with finance transformation

Adam: Hello and welcome to PwC Canada's newest podcast, Finance in 15, in a series that explores finance transformation and what it means for leaders in the finance function. My name is Adam Boutros and I'm your host. As PwC Canada's future of finance leader, I've been having great conversations with CFOs and other executives in recent months and there's so much to talk about with the COVID-19 pandemic really giving an extra push to the idea of digital transformation in general and for finance leaders specifically, the need to reinvent how their finance functions operate. So we're launching this podcast to dive even deeper into what finance transformation means and explore how you can kick start your own journey. We're launching our series in two parts. For our very first episode. I'll be joined by Samir Bishara, who leads PwC Canada's National Finance Transformation Practice. He's going to talk about what the future of finance is all about and where to start. He'll be joined in our second part by Alaina Tennison, CFO of PwC Canada. She'll help us put our financial transformation principles into practice by telling us about what PwC Canada did to reinvent its own finance function.

Adam: So let's get started with Samir. Welcome to the podcast and thanks for joining me.

Samir: Thank you, Adam. Good to be here.

Adam: So to start things off, can you give a quick background on your role and what you do when you're working with finance leaders?

Samir: Absolutely, Adam. So a lot of our finance leaders struggle with what is the role of finance? Traditionally, the role of finance has been around being the the steward and the operator, making sure the numbers are correct and the financial statements are accurate. But over the last few years, what we have noticed is the traditional role of finance is being challenged. CFOs and finance executives are looking beyond incremental change and breaking down the silos. Three main business problems arise to solve. One is how can I deliver better value and insights to business leaders? Two how can I spend less time on transactional processing and spend more time on looking forward and delivering insight? And three, is my team adequately skilled to meet the demands and the requirements of the business as we execute against our strategy?

Adam: Yeah, very good. And no doubt driven from all of the deep conversations that you've been having with clients from coast to coast, really. So as we think about finance transformation, I know it can mean a lot of things to a lot of different people. At PwC, Canada, we talk about it in terms of people process and performance, or the three Ps. Can you tell us more about the three Ps and maybe talk about finance transformation, what it is, what it isn't, and perhaps address some myths or misconceptions people might have?

Samir: I'll start with the, with myths. There are two myths. Number one is that transformation is all about technology. You have the best technology, the latest tools and boom, you have that and everything will be alright. That is wrong. Number two is the transformation, there's a perception about it that it's going to take longer, it's more complicated, it's more expensive, and a lot of companies are saying, no, I'm not going to spend a couple of years to get some kind of business case realized. So we start with people. For the CFO to accomplish their goal of being a better business partner to the business. They need a digitally savvy team with the right skills to support the finance leader's vision. This is why we really emphasize that it's not just about the technology. It's also about building teams to thrive. Many organizations have no issue attracting talent. The problem is if the processes and the technology are not there, you have very capable people doing menial tasks such as reconciling spreadsheets, multiple jockeying of Excel spreadsheets, trying to get that information ready. And most high performing people just will not stick around for that, especially as we go to the future of finance transformation. So developing the finance workforce into a digitally savvy and collaborative competitive capability, you have to retool to attract and retain talent in a very highly competitive labor market. Financial resources will work alongside bots with an AI capabilities, a distributed finance function including shared services, outsourcing partners, centers of excellence alongside the finance function in-house to provide insight and deliver performance.

Adam: OK, I love how you started with people, because I think in the most successful transformations that we've seen, it really does involve getting everyone on board, showing them what's in it for them, and really bringing them along in the transformation and upscaling journey after people maybe let's move on to process now.

Samir: Gone are the days of customizations and clients saying that their finance processes are special. Finance is finance, finance processes for the most part are the same. The move to cloud allows us to standardize and simplify those processes, leveraging technology the way it was meant to be used. Anything else can be automated, reducing the need for manual processes and workarounds.

Adam: The process element is often underestimated in terms of how important it is to fix the underlying processes before jumping into the technology aspect. So if we look at a transformation that has addressed the people element, the process element and now turning to performance, what does that look like?

Samir: Performance is what it's all about. It's what really the the finance users, the business users of the community, the partners really see the impact of. So we start actually with the end in mind and focus on performance. What are the decisions that the business and the finance function needs to make? What is the type of information that they need at their fingertips without having to worry about accuracy, where the data is coming from, and the dreaded Excel spreadsheet. In traditional transformation, reporting is done at the end after the technology has been implemented. Given the role of finance as the business partner that is underpinned by data and insight, we work with the client upfront to define their informational needs and use that to design the data models needed and build around that.

Adam: So how about some outcomes? What have you seen in organizations that have tackled the three Ps most successfully?

Samir: Imagine a finance function, Adam, that spends the majority of its time analyzing results, forecasting the future and driving decision making. So forget the days of recording the past recording transactions, but looking forward to business insight and intelligence. This finance functions can do this because it leverages a skill team and technology to transact and report events on events as they occur, manage transactions by exception, minimize reconciliations and establish a self-serve information delivery model, freeing up capacity and using talent to the best effect possible, which is decision support and business partnership.

Adam: Very powerful and sounds like a finance function that I'd like to be part of. So these projects can be daunting. There's a lot to them. Where should they get started?

Samir: Well, the journey is not linear or prescriptive, and the starting point is uniquely driven by the needs of the organization and where they are on the journey. We have four stops along the way of the journey. Number one is a clear vision roadmap to get there and followed by the three Ps. The key message is while this journey is going on, it does not preclude us from realizing benefits associated with capacity, process simplification, standardization and a better and deeper insight of the data and information the business needs.

Adam: So as we get into these projects Samir, it's obviously a collaborative engagement where there's a lot of investment required from the clients working alongside PwC. Can you tell me about what your secret to success is around doing that successfully and and really helping the clients along the journey?

Samir: Adam, what I've noticed is clients are very determined to make an impact. The challenge that they face is trust in the business partner, and working collaboratively. Most clients do not want a consultant to come in and do this to them, it is doing this with them. For them. And that's really the key. For this relationship to work, because it is a relationship there needs to be a vision or an acceptance of the fact that the consultants are there to help. And that is a barrier that our industry has faced, that consultants are coming in to do a project and then they're gone. But when that works, which is the finance team and the consultants work together, it's just amazing. It's fireworks. The other key thing is to think about what are the different capabilities. When I started my first consulting project many, many years ago, it was like, OK, we're going to get in the SAP team, we're going to get in a bunch of process people and everything's going to be done, et cetera. But transformations now are much different. They require different skill sets and different capabilities. You bring together the clients and surround them with the SAP capabilities, the workday capabilities, the experience team, which looks at crafting the future state experience of the what they want to deliver around the finance user. You bring in capabilities of analytics, data modelers, data scientists. You look at risk assurance and tax compliance and also looking at it from a process perspective. So when you factor in all these capabilities, it is very important to work together as one team, one partner, and most importantly, to have the right people on your team.

Adam: OK, Samir, tell me about a project that you're working on right now, maybe a challenge that you faced and how you overcame it as a team.

Samir: We're currently working with a large global Canadian based company on their financial transformation journey. They have multiple ERPs. They have grown through acquisition. They are struggling with retaining people because of the hard labour market. And we started by working on the current state assessment to say, OK, what is the finance function today? Where are the pain points? Where are the challenges? And worked with them on the future state solution that brought together not only the finance leaders, but also the finance stakeholders. We defined that future state and we launched six parallel initiatives alongside the CFO and the finance leadership team to define the road map and start getting on going on that journey.

Adam: And what about working in the environment we're in right now? I know we're all virtual. Can companies start a finance transformation journey working the way we are?

Samir: Absolutely, Adam. And when COVID hit, we all struggled quite a bit. We were used to running workshops in person. Teams would be engaged, working around whiteboards and trying to engage in discussion, having people from the different lines of business. And that was probably the hardest thing to overcome. But I think one year into it, we've all got used to it. We have great tools, collaborative tools that allow us to do this. And overall, our mindset has accepted the fact that things are different. And in fact, I don't know if they'll ever go back to the way they used to be done before. So, yes, we have embraced change. We are all agile and adaptive.

Adam: Yeah, I think it might be fair to say some of the projects that I've been involved in, they can actually move more quickly because meetings come together a little more quickly in this virtual environment, there's no geographic boundaries. So you really kind of get an accelerated spin on many parts of the process. So I actually think it's a pretty good time to jump into a finance transformation.

Samir: That's absolutely right, Adam. And many of our clients are investing now because the market will take off again. The businesses are booming. Some of them are, some of them aren't being challenged. But it's a great time to step back, look at what needs to be done, take care of the housekeeping and emerge even more powerful than before.

Adam: All right. Very insightful Samir. Really want to thank you for your time today and giving people a good sense for the overall transformation process, how they can get started and what good looks like.

Samir: My pleasure, Adam. Good to be here. And I definitely have a passion for finance transformation.

Adam: So in our work, Samir and I meet a lot of finance leaders who are working hard to be change agents who will lead their finance functions into the future. Already, COVID-19 has shown us how quickly we can adapt and embrace change, and I really am excited to see what comes next. At PwC Canada we've been on this journey in our own finance function for some time. So to bring finance transformation and the three Ps to life, join us for part two. I'll speak with Samir and our own CFO, Alaina Tennison, who's going to talk to us about what we've done at PwC to our own finance function and what we've accomplished. Visit our Web site at www.pwc.com/CA/FinanceIn15 to learn more about the opportunities ahead for finance leaders. That's www.pwc.com/CA/Financein15. If you enjoyed today's episode. Please let us know by leaving a review and rating us on Apple Podcasts. I'm Adam Boutros and this is the Finance in 15 podcast. This podcast has been produced by PricewaterhouseCoopers LLP and is for informational purposes only. Contents discussed are for general guidance on matters of interest and should not be taken as professional, legal, business, or investment advice.