Professional Documents
Culture Documents
Transformation
Strategic Approach
Agenda
XYZ Research
conducted a global
survey to understand the 31 68
maturity of the finance 54
function in governments
across the world. 13
2 3
100
66 percent have
80
difficulty getting timely
% of Respondents
and accurate
60
financial information
38
40 31
26
20
6
0
Not a barrier at all Minor barrier Moderate barrier Signif icant barrier
Program Owners Do Not Understand The Full Cost of Their Services Our Systems Find It Difficult To Support The
Including Asset Costs Preparation of Costing Reports
100 100
80 80
% of Respondents
% of Respondents
63
60 60
49
40 40
30
20 17 21
20 20
0
0
Disagree Neutral Agree Disagree Neutral Agree
The understanding of costs is missing and systems are not competent enough
to prepare cost reports
Source: XYZ Research Study, “Mastering Finance in Government,
Transforming the Government Enterprise Through Better Financial Management”
Gap #3: Relationship between investments and outcomes
is unclear
100
80
% of Respondenst
60 54
40
30
20 16
0
Disagree Neutral Agree
Compliance/Risk Management
100
Only 29 percent have strong
80 compliance/risk management
% of Respondents
capabilities
60
39
40
21 24
20
8 7
0
Source: XYZ Research Study, “Mastering Finance in Government,
Non-exis tent Developing Basic Advanced Leading Transforming the Government Enterprise Through Better Financial
Management”
Understanding finance’s challenges
Stimulate behaviors Provide financial
across the organization Leading Edge leadership in
to achieve strategic and determining strategic
financial objectives business direction and
align financial strategies
Threshold
Performance
Finance
CFO
Function
Focus
Triangle
0 20 40 60 80 100
% of Respondents
0 20 40 60 80 100
% of Re s ponde nts
0 20 40 60 80 100
% of Re s ponde nts
• Leveraging finance across the enterprise as a catalyst is a challenge for nearly all
government agencies studied. Strategists/Catalysts, however, are breaking new
ground and use this area to drive performance.
• Compliance
•What government does
• Management reporting
•Set strategic priorities
• Forecasts and budgetary plans
•Improve resource allocation
• Financial policies, processes, and
•Evaluate policy alternatives
procedures
•Set performance measures and targets
Almost no agency in our analysis has been able to master strategist and
catalyst capabilities without a foundation in stewardship and operator
capabilities
Stage 2: Improving the what and how - acquire
strategic capabilities
% of Respondents With Advanced or Leading Capabilities
Intermediates
100
Finance Masters
80
60
40
20
0
Determine Prioritize and Develop project Finance spends
strategic gain approval f or cost-benef it more time
priorities highest value analyses and dealing w ith
initiatives prioritize longer-term
investments f inancial issues
than on the
short-term (this
year and next)
issues
80
60
40
20
0
Policy alternatives are financially Finance has a clear and w ell-
valued to provide decision understood role in the
makers w ith the long-term cost development and evaluation of
implications of short-term strategy
decisions
100.0 Intermediates
Finance Masters
80.0
60.0
40.0
20.0
0.0
Budget There is a Program Senior leaders The finance
performance is thorough ow ners can obtain function is best
examined in understanding understand the financial results placed to move
combination of the full cost of their quickly the organization
w ith other cost relationship services at large to a
efficiency betw een including asset greater focus
performance investments costs on value
measures made (program
costs) and
outcomes
achieved
Leading Edge
Enablers to improve
their operations and Close, Regulation,
Consolidate Controls
better achieve their & Report & Governance
objectives Threshold
Performance
Enablers
Organizations working to improve their performance
can conduct a self assessment
Steps to Identify Areas for Improvement:
3. After assessing each Value Driver and Enabler, prioritize your issues
and determine a course of action to transform Finance
Transformation efforts can be driven by
organization and people
Organization and People
• Work to better define the finance operating model,
considering finance roles and responsibilities across key
stakeholders
• Consider opportunities to implement shared services or
centralized models
• Enhance the skills and training of people working in finance
• Begin addressing the recruiting and retention issue now
Examples
• Creation of shared services for particular finance functions,
such as invoice processing
• Establishment of a centrally managed performance
management effort
• Allocation of trained staff to analytical units focusing on
strategist and catalyst activities
• Create a dedicated audit organization that develops its
business plan through analysis of risk areas
Transformation efforts can be driven by
process and programs
Process/programs
• Find ways to reduce paper transactions
• Create processes that reduce the number of handoffs and
approvals
• Design processes that can use streamlining technologies
Examples
• Develop easy-to-use purchasing card guidelines to reduce
paperwork intensive transactions
• Review coordination of process activities across different
organizations and improve coordination
• Post-audit a sampling of transactions rather than pre-auditing
all transactions
Transformation efforts can be driven by
technology
Technology
• Find ways to use imaging, electronic processing and
workflow
• Implement integrated technologies
• Create integrated technical and business teams
• Use electronic forms and standardized technologies
• Develop integrated financial, procurement and HR systems
Examples
• Implement workflow technologies for invoice processing and
other processes
• Image documents one time and use the images for
processing
• Leverage vendor self service technology to push data entry
to vendor.
Global finance transformation research and benchmarking project