Hat tip to IBM for its 2010 Global CFO Study.
What did 1,900 global CFOs report as the primary driver for their investment in Finance Transformation programs? It wasn't ROI.
What was really interesting in the presentation, hosted by APQC, on IBM's findings was that CFOs are pursuing strategic goals in Finance Transformation, way beyond simple cost reduction and better cash management.
Carl Nordman, IBM Research Director on the Study, commented:
"The case for change is much more about strategic goals: greater transparency, enhanced risk and controls, globalization and the mitigation of structural complexity. ROI was secondary. The benefits were seen as longer-term, building the capability to recognize opportunities and to execute on their plans."
Which makes perfect sense. And it's a breath of fresh air because the received wisdom tends to focus almost exclusively on the ROI of cost reduction.
Two other findings stood out:
'Time to value' is shortening dramatically. Finance Transformation programs used to take 10-15 years. Now they take more like 5-7 years. It was a lesson learned by CFOs: "You can pull multiple levers at the same time".
One of the biggest gaps between aspiration and reality related to continuous improvement. More than 80% of CFOs said that embedding continuous improvement was a high priority. But only 50% thought that their Finance functions were doing it effectively.
This accelerated pace, together with the complexity of multi-track change programs and the need to enable engagment in continuous improvement, reinforce the argument that the methods and tools for managing process that got us this far aren't fit for the future.
Going forward, an enterprise platform for process management of this sort will be essential. They are the key to delivering the mitigation of structural complexity that CFOs want. Otherwise, as Phil Gilbert has noted, we risk creating enterprises so ridiculously complex that they are unmanageable, or hopelessly inefficient.
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