Previously, we discussed how “Finance Transformation Begins with a Vision”. Once a vision has been set, it is critical to establish the appropriate governance model to support and enable decision-making and ensure efficiency and effectiveness in deployment. The lack of project governance will slow the project and increase deployment costs. Leveraging a governance model will ensure that the project stays in alignment with the strategic vision.
Establish Sponsors and Champions
Deploying project governance should start with defining a project sponsor that has the ability to obtain executive support for the project. If the executives outside of the Finance organization are not in support of the project, it will be difficult to bring about the necessary change to transform the Finance function.
Executive support should then be extended by leveraging a business partner advisory council as part of the overall governance model. This advisory council needs to include key stakeholders and critical users of Finance processes and technology throughout the company. These partners can then be utilized to champion process and technology changes, perform functional testing, and provide feedback.
Streamline Decision Making
A steering committee needs to be established to ensure activities are aligned with the vision and provide strategic decision making throughout the project. Steering committees are often made up of executives and leaders that have limited time to support the project. The project can quickly get off track due to delayed decisions, poor communication, and limited steering committee availability. Therefore, ensure that a decision-making process is clearly defined with effective communication and delegation of authority.
Most decisions can be streamlined if a project governance committee is established to intake project issues and new requirements, set priorities, ensure vision alignment, make decisions and escalate to the steering committee with recommendations as needed. Committee members usually include project, functional, and technical management that are dedicated to the project.
To ensure effective delegation of decisions, it is critical to document and gain consensus on a decision-making model. The roles and responsibilities of each committee must be clearly defined. This model will also need to define who has the authority to make decisions for various issues or opportunities that are likely to arise during the project. One approach is to define who can make decisions based on categories of issues or opportunities. These categories may include impacts to the organization, customer, strategy, Finance operations, technology, and project program. Understanding who can make decision for each category will help determine when a decision needs to be escalated.
Once the governance structure has been defined, document the decision-making process. The key component to this process is to define how issues or opportunities are communicated and escalated through the governance model. It is important to ensure that the process requires the problem or opportunity to be clearly defined with an estimate of time and budget. Having the necessary information is key to conducting effective meetings where the committee members can make informed decisions. It is also important to define how decisions will be communicated to the project team and stakeholders that are impacted by the decision.
Engage Internal Audit
Technology implementations often proceed without considering the internal controls that need to be in place at go-live. Engaging Internal Audit in today’s environment of compliance and internal controls is a critical component to managing compliance risk. Including a representative from Internal Audit on the steering committee will help ensure that compliance checkpoints and control documentation are in place.
Cloud-based financial management applications will provide multiple updates to functionality throughout the year. A version of the project governance model needs to continue after the deployment to consume these updates. This will ensure that the new functionality is properly leveraged and is in alignment with the strategic vision.
Don’t make the mistake of starting a technology implementation without taking the time to define a governance model with the focus on streamlining decision making. This will help ensure that the implementation delivers on the promised outcomes that are necessary to transform the Finance function and keep the implementation on-time and within budget.