kpmg.

ca/financialmanagement

ISSUE 6

Finance Function Insights

Editors NOTE
Finance functions around the world are being transformed in all
industries from a transaction focus function to a much more strategic
value-add function.

Dan Zbacnik
National Leader,
Financial Management Advisory
Services, KPMG
(416) 777-8129
dzbacnik@kpmg.ca

Transforming your Finance function is no easy task. Do you do

it in small incremental steps or do you dedicate a large project
to accomplish this over a shorter amount of time? Do you
centralize the function or decentralize it across operations and
geography? There are lots of questions with unfortunately no
right answers.

This issue of Finance Function Insights expands on many of

the issues raised in the CFO survey results. We welcome
your comments and questions on Finance Transformation or
any other information you receive from us. Please feel free to
send your feedback to me or contact the authors of each article
directly.

Since our last Finance Function Insights issue (#5) we have

issued several publications on Finance transformation which
can be found on our website. Transforming Finance is KPMGs
point of view on Finance transformation. New Role for New
Times is the results of our Global survey conducted by CFO.
com of 443 leading Finance leaders on their views of Finance
Transformation. A seat at the table is the Canadian version of
the survey results.

Regards,

Upcoming Publication
From Keeping Score to Adding Value
Global CFOs on the Art of Constructive Change
The second part of a two-part series, explores key areas of concern and opportunity that were identified in
our Transforming Finance publication (click here). Based on in-depth interviews of industry leading CFOs,
this survey is intended to capture insight from those at the heart of Finance transformation.

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

 2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Setting the direction for

Finance transformation
Peter Brodrick, CA

Todays CFO needs to be able to contribute to organizational value creation in three core
areas: building trusted relationships with key stakeholders, simplifying financial reporting
and control processes, and providing insightful information for business decision-making.
For many organizations, Finance has historically been the transactional scorekeeper.
However, the business is increasingly looking to Finance for more decision-useful
information, and to bring with it interpretation and insight.
This implies the need for a transformation for many Finance
functions, a dramatic shift from the status quo to forwardlooking value add. But what does adding value really mean in
your organizational context? How can Finance best support the
business in realizing sustained value? These are fundamental
questions which require a fresh and hard look at your Finance
vision, goals and strategies.
Whether creating a meaningful strategy from scratch,
rethinking an existing strategy, or simply validating the current
direction, answering these questions is a critical first step in

A seat at the table: Transforming the Finance function, KPMG 2011

2 | Finance Functions Insights

the transformation journey. It is important to get this first step

right before plunging into individual changes to process, people
or systems. Leading Finance functions have a clear picture of
where they are headed, and what theyre trying to achieve, and
as a result, are well placed to prioritize competing demands
and focus limited resources. A recent global CFO survey
commissioned by KPMG found that a lack of clear direction on
the strategy, agenda and mandate for the Finance organization
was a key barrier to improving Finance effectiveness for almost
a third of all respondents1.

With this in mind, it is helpful to carry out the following

when setting the direction for your Finance transformation:

Take the time to clearly understand what is valued by your key Finance customers. Talk to the senior
leadership team and line of business managers to understand what they need from Finance to
achieve their strategic goals and objectives. Use this to shape your own vision and goals. Taking the
time to do this properly pays additional dividends by helping to achieve executive buy-in and support
for downstream change initiatives.
Having gathered your customer requirements, translate these into the critical success factors
needed to deliver against those requirements. These factors guide the development of specific
strategies in support of your newly shaped vision and goals.

2
3

Assess your current resources and systems:

Having taken the time to understand your customers needs, it is important when developing goals
and strategies to take stock of your current resourcing situation. What resources do you have to
meet the aspirations for Finance? Do you have the right level and mix of skills within your team?
Do your systems effectively support your key processes? If these enablers of transformation are
not well established, you may need to temper your goals and adjust your strategies. Conduct a
high-level gap analysis by comparing your current state with the critical success factors identified in
the previous step.

Balance efficiency and effectiveness goals:

There can be a tendency to focus change initiatives on enhancing either efficiency or effectiveness,
and typically one at the expense of the other. During goal setting, it is important to bear in mind
the CFOs multiple roles, which include both efficiency in financial recording and reporting, and
effectiveness in delivering insightful information. Define objectives to include both value creation
such as true business intelligence, and efficiency outcomes such as a shorter close process or a
streamlined portfolio of preventative and automated controls. Securing efficiency gains frees up time
to focus on generating greater business value, allowing Finance to transition to a true business partner.
Genuine transformation begins with a robust direction and strategy setting process that is inclusive,
aligned and balanced, providing a foundational framework for success well into the future.
Contact the author of this article: pbrodrick@kpmg.ca
Finance Function Insights | 3

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Define value from your customers perspective:

A True Test of Leadership

Transforming Finance and Bringing Stakeholders Onboard

Christian Lecours, CMA

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

According to the latest KPMG-CFO research survey, the role of Finance has remained essentially
unchanged as compared to previous survey results. Some regulatory and economic external
factors have indeed impacted the transformation of Finance, shifting away from traditional
compliance and control management initiatives to an emboldened strategic partner role. Still,
more can be done to empower the function. Can Finance step up to the plate?

Survey findings include Finance executive feedback showing

leaders are keen to enable a radical shift, allowing their
teams to go from organizational implementers to strategic
leaders of change. Still, successful business transformation
deployment could be complex and require tailoring to different
organizational cultures.
As a key strategic endeavour, this paradigm shift requires
strong leaders committed to change, dedicated to bringing
all stakeholders on board, and passionate about overall
organizational outcomes. Executives are encouraged to
communicate all strategic and operational benefits within the
function and the organization as a whole, underscoring cost
savings and also identifying organizational, technology and
human impacts, long term and short term.
Successful business transformations are usually orchestrated
by inspiring leaders who influence decision-making, mainly
because they are trusted by internal and external stakeholders.
These leaders are recognized as solid managers with an
undisputed performance track record. Their credibility is a
valued asset. Near term, it may be advisable to enhance
transactional efficiencies for processes where Finance
involvement is key.
Consider leveraging strategic thinking. Successful leaders will
need to strike a balance between efficiency and effectiveness,
risks and benefits, and strategic and transactional initiatives.
Successful leaders are passionate about change. They care,
and it shows. They steer with a steady hand.

These six steps can help you enable a Finance

function overhaul within your organization:

1
2
3
4
5
6

Be the go-to strategic leader in your function

a. Share your vision with your team
b. Enlist them to help with project development
Prepare and master your business case
a. Identify success benchmarks
b. Lay out success in economic terms
c. Identify roles and responsibilities
Reach out to supporters
a. Get support from one or a few trusted
colleagues
b. Share your vision with them
c. Listen to them and remember the Whats in it
for me? rule
Submit your project to the leadership team and get
approval
Prepare progress reports including successes and
challenges
Never lose sight of project goals, despite an
increasing demand for services

Contact the author of this article: clecours@kpmg.ca

4 | Finance Functions Insights

Enabling Your Finance Transformation

through Technology
Marty Murray, MBA, CGA, PMP

According to the recent KPMG study, A Seat at the Table: Transforming Your
Finance Function, 72% of Canadian respondents indicated that information
systems for financial processes and activities will become more important to
their business over the next five years. This statistic supports the trend in the
Finance departments evolution in playing a more prominent role in integrating
information across the organization, and effectively leveraging technology
enables Finance to play this role.
While technology can improve efficiencies and enable the Finance organization to provide more insightful
and forward looking analytics for decision making, it requires a strategic and disciplined approached to
ensure the rewards are realized. The following are three factors to consider before undertaking a Finance
transformation initiative enabled by technology:
1. Strategic and operations alignment of technology initiatives with Finance transformation priorities;
2. Comprehensive review of processes, controls and people (resources) as part of your technology
initiatives; and
3. Consider other organizational factors: change readiness.

Contact the author of this article: mmurray@kpmg.ca

Finance Function Insights | 5

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Finance 2.0:

Align your technology initiative with your Finance

transformation priorities
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the strategic and operational objectives that Finance wants
to achieve. Are you trying to: improve transaction processing;
accelerate the close process; improve reporting? Provide
analytical insight and support?
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objectives. For example, if accelerating the close is a Finance
priority, then perhaps you need to undertake the selection
and implementation of a consolidation system.
Undertake a comprehensive review

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

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structures and resources, to identify improvement
opportunities that leverage the technology to increase
efficiency and effectiveness. All too often, organizations take
technology and overlay it on inefficient processes expecting
it to cure all of the issues technology should be seen as an
enabler of process not as a solution to process inefficiencies.
Consider other organizational factors: Change Readiness
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implementation in the context of other initiatives. What other
projects are underway? Have you gained buy-in and support
from key stakeholders? A key part of this assessment should
be to review previous initiatives for lessons learned to
understand some of the key organization barriers and issues
that may be encountered.
Technology can help Finance departments deliver value to their
organizations by reallocating resources to provide accurate and
insightful information to support decision-making by business
leaders. To realize their return on investment in technology,
Finance departments should adopt a strategic and structured
approach in the adoption and use of technology, and thereby
gain their seat at the table.

Contact the author of this article: mmurray@kpmg.ca

6 | Finance Functions Insights

Optimizing Financial
Operations Through

Jim Cruickshank/Sean Bartman

In the recent economic downturn, many companies halted spending on a key

engine for success - their people. As a result, financial operations were forced to
adapt operating models to have a narrowed focus on core activities and tighter
organizational structures. Additionally, fiscal constraints and increased scrutiny
created further strain on Finance functions and their resources, already stretched
thin. That said, those CFOs with an eye on the future learned invaluable lessons of
efficiency and effectiveness through this period of challenge.
With the economy moving again, these same CFOs now
recognize the need to reorganize their operations and reinvest
in people strategies to establish competitive advantage and
be leaders in changing markets. Simply put, the way we work
and the skills needed to be successful have changed. For
organizations to significantly advance their strategic priorities,
they must be organized with performance in mind. Operating
models that havent adapted to meet changing needs are far less
effective and risk losing critical top talent. In order for CFOs and
Finance functions to remain competitive, be seen as strategic
partners and truly add progressive value today, a rethink of the
traditional organization design is required.

Merely redrawing an organization structure misses the point,

and those who evolve without conscious design choices
are likely to establish inefficient structures with unclear
accountabilities and suboptimal working relationships. CFOs
serious about competitive advantage will take a holistic approach
to organization design to address the complexity and challenges
of todays Finance organization. This means considering key
strategic questions such as What does it mean for us to be a
strategic partner?,How do we effectively link to the rest of the
organization to support the strategy and day-to-day business?,
and How can we leverage talent to create and sustain a highperformance culture?.With answers to questions such as these,
CFOs can build organizations designed to succeed.

Finance Function Insights | 7

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Organization Design For Performance

Effective organization design for performance takes a broad and thorough approach. It is
a logical process, starting with the development of a clear strategy, role and purpose.

Changing Economic Environment

CORPORATE STRATEGY
2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

WHAT

Which Customers?
Which Products?
Which Channels?
Which Distinct
Capabilities?

HOW

Macro
processes

Structure

Work Processes
Micro Structure
Job Descriptions &
Accountabilities
Coordination &
Collaboration
Mechanisms
KPIs
Staffing Strategy
Technology and Data

TARGET
People

OPERATING

IT

MODEL

Governance
Mechanisms

Geographies,
Sites

MACRO

MICRO
ORGANIZATION DESIGN

Designing an organization or function for performance considers

all the enabling elements to meet desired performance
objectives. Where organizations often need help is in objectively
picking and designing those elements to best enable them to
deliver on their specific performance objectives. Such changes,
as explained in Article #2, will require substantial leadership and
communication with employees and key stakeholders, as well as
a balance between usual operations and more strategic activities.
As market conditions continue to evolve, leading Finance
organizations will be rethinking the design of their

organizational structures and investment in people to create

and sustain higher performance. CFOs who believe that the
Finance function plays a critical role in the development and
execution of business strategy will be seen at the forefront,
driving these changes. Their key to success will be simple:
Remember the lessons learned from operating lean with a
focus on due diligence and governance, and take a disciplined
and considerate approach to planning the structures,
processes, systems, and capabilities needed to achieve
increased levels of performance.

Contact the authors of this article: jwcruickshank@kpmg.ca & sbartman@kpmg.ca

8 | Finance Functions Insights

Publications can be downloaded from our Financial

Management Advisory website. Print copies can also be
requested from your local KPMG office.
You can automatically receive the latest KPMG insights
on issues in financial management by subscribing to our
e-mail list.
Mastering Finance Business Partnering:
Shared services and outsourcing highlight the need
for improvement in the retained Finance function and
business partners roles, and Mastering Finance Business
Partnering discusses some of the challenges around
adopting business partnering models. It offers practical
steps and advice based on our extensive experience.

A quarterly round-up of our latest insights on

issues in financial management and reporting.

Maximising people power: Effective talent management

in Finance:
The economic crisis provided heightened visibility of the value
that professional accountants bring, and the next decade
presents an enormous opportunity for Finance professionals
to help create and sustain long term value for organizations.
But this goal depends on the people within Finance and the
way that the organization develops and applies their talents.
In an economic environment focused on cost, the ability of
employers to realize and leverage the talent within their Finance
functions will be more important than ever.

In the next issue

Finances role in organizational performance management
As Finance functions seek to become a valued partner to the business, they have an
opportunity to play a pivotal role in the performance measurement process adopted
by their organizations. In our next issue, we will focus on the role Finance can play
in the development and reporting of key performance metrics to enable effective
performance management.

Finance Function Insights | 9

2011 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

+ New this quarter

How KPMG can help

KPMGs global network includes more than 1,100 talented professionals dedicated to
financial management who share insights and experience on financial management
matters to assist clients of all sizes.
Simply stated, we help Finance leaders and Finance organizations drive business
value. We work with private and public sector clients to help ensure the integrity of
Finance processes and information delivered to key stakeholders.
We help clients tackle Finance-specific issues while addressing larger mandates from
the business via seven broad categories of services:
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We take a holistic view of the important connections between business goals, team
skills and capabilities, critical behaviours, and cultural attributes.

Contact us
To discuss any of the issues or opportunities explored in this issue
of Finance Function Insights, please contact your KPMG adviser or
any of our Financial Management Advisory professionals:
National and GTA Lead
Dan Zbacnik
(416) 777-8129
dzbacnik@kpmg.ca

Business Performance Management Lead

Chris Moore
(416) 777-3034
chrisjmoore@kpmg.ca

Qubec Lead
Martin Leblanc
(514) 840-2275
mleblanc@kpmg.ca

Alberta Lead
Stephanie Terrill
(403) 691-8374
sterrill@kpmg.ca

British Columbia Lead

Alastair Nimmons
(604) 691-3248
animmons@kpmg.ca

kpmg.ca/financialmanagement

The information contained herein is of a general nature and is

not intended to address the circumstances of any particular
individual or entity. Although we endeavor to provide accurate
and timely information, there can be no guarantee that such
information is accurate as of the date it is received or that it
will continue to be accurate in the future. No one should act on
such information without appropriate professional advice after a
thorough examination of the particular situation.
2011 KPMG LLP, a Canadian limited liability partnership and
a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. 5923
The KPMG name, logo and cutting through complexity are
registered trademarks or trademarks of KPMG International.