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Transformation Tales: Should I Hire a Permanent Finance Transformation Director?

Writer's picture: James HuangJames Huang

Updated: Apr 11, 2024

Transformation Tales are insights and stories from my time working as a finance transformation consultant.


What is a permanent Finance Transformation Director?

Traditionally, large organisations have temporarily hired external contractors and project managers to implement significant changes, such as a new finance system.


Nowadays, increasing numbers of large organisations have a permanent Finance Transformation Director (FTD). This role reports into the Chief Finance Officer (CFO). The remit is to drive strategic initiatives to reduce the cost of and improve the effectiveness of the finance function. This role is all about implementing change.


This blog post explores the pros and cons of hiring a permanent FTD instead of the more traditional external contractor model.


Pros:

  1. In depth knowledge and connections – one disadvantage of external contractors is that they don’t have in-depth knowledge or internal professional connections when they start a project. So, there isn’t much activity in the first few weeks of a project as knowledge is built up and connections are made. This is more acute in larger organisations and those with complex business operations. Crucially, credibility with the internal stakeholders can be made or broken in those early days. A long-established permanent FTD has that knowledge and those connections already in place.

  2. Change is now constant – organisations strive to reach a stable BAU (business as usual) environment but never seem to get there! There are acquisitions to integrate, internal reorganisations, processes to improve and pressure to reduce costs. We haven’t even considered the emerging impact of AI. That means it makes sense to have a stable, permanent role that is responsible for dealing with the constant change.

  3. Single point of contact – there can be a number of ongoing projects and several different competing priorities for future projects. A single point of responsibility can cut through the complexity and set the correct strategic direction.

Cons:

  1. Accountability and alignment with the CFO – even with an empowered FTD the CFO still has ultimate accountability for their finance organisation. You want to avoid the perception that the CFO looks after BAU while the FTD looks after change. The CFO should look after both and work in lockstep with the FTD. In the worst cases, the CFO and FTD can be played off against each other!

  2. Siloed responsibility for change – badging a role or a team with the “transformation” title means that the rest of the finance organisation may think that their roles are restricted to BAU activities. However, change is now a constant so any change project is a whole team effort. Often, the changes that stick are those that arise organically from existing teams. A FTD with a well set up team under them avoids this “us and them” mentality.

  3. Cost – there has to be a sufficient pipeline of change projects to justify hiring a permanent position. For smaller organisations or discrete, one-off projects hiring a temporary external consultant still makes sense.

  4. May still require external expertise – even an empowered FTD may not have the right expertise for a particular project or have capacity constraints. Finance system implementations are once-in-a-career events, but a contractor may have gone through several implementations. Bringing in external expertise can still be the right solution.


Blended approach – a permanent finance transformation role that is supported by the right external contractors and consultants may be a way that combines the best of both worlds.


Overall, a Finance Transformation Director plays a crucial role in redefining financial processes, implementing new technologies, and improving overall financial performance. They are becoming a must-have for today’s organisations.

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