The role of finance in the strategic planning and decision-making process
optim2 - high performing Finance
1. Building a
high performing & partnering
finance organisation
optim2 is a management consultancy that works with leading Australian companies to assess and improve their
Finance organisation. optim2 has deep expertise in delivering strategic reviews of the Finance organisation, re-designing
Finance processes, measuring the performance of Finance, and leading Finance transformation initiatives. In building a
“High Performing and Partnering” Finance function, the three big questions clients consistently ask us are:
QUESTION optim2 capability
Do we have the right Finance operating model to best support the business? ASSESSING FINANCE
How do we design, build and implement high performing Finance processes? IMPROVING PROCESSES
What are the right measures for Finance, and how do we compare? MEASURING PERFORMANCE
Why
optim2 provides the subject matter expertise to take your organisation to the next level. The optim2 difference is:
FOCUS
“this is all we do”
We only consult on the Finance organisation, and will
rapidly identify practical recommendations that succeed
EXPERIENCE
“no junior consultants”
Our team has a minimum ten years experience, so you don’t
pay for us to learn – we ask the right questions the first time
DETAIL
“PowerPoint is not a deliverable”
Our deliverables are not “one size fits all solutions”, and we
don’t consult by PowerPoint – clients deserve more detail
TRACK RECORD
“our clients recommend us”
We have an enviable list of ASX, private, multinational and
public sector clients – all our clients are references
BENCHMARKS
“metrics from over 50 companies”
We sponsor the Australian Benchmark Initiative, the
leading source of Finance benchmarks and better practice
FOLLOW THROUGH
“we implement our recommendations”
We often lead the implementation of the
recommendations that we make
2. ASSESSING FINANCE
QUESTION TYPICAL SCOPE
Do we have the right Finance operating model to
best support the business?
• Finance strategic review
• Target operating
model definition
optim2 are routinely asked the questions – what should the cost of Finance be as a percentage of revenue?, or
what should the headcount of Finance be? The questions raise more issues than they answer, including what is
Finance, what is its role, and where are the gaps? To fully assess the Finance organisation both core and business
embedded components need to be included, and it is critical to consider the different objectives of each component.
optim2 FINANCE ACCOUNTABILITY MATRIX
TRANSACTIONAL
PROCESSING
ACCOUNTING &
REPORTING
MANAGEMENT
INFORMATION
PERFORMANCE &
PLANNING
TECHNICAL
ACCOUNTING
Example Functions
• Purchase to Pay
• Invoice to Receipt
• Payroll
• Month end
• Financial reporting
• Reconciliations
• Reporting
• Costing
• Analysis and insight
• Planning
• Budgeting
• Forecasting
• Treasury
• Internal Audit
• Taxation
Objectives
• Standardisation
• Lower cost
• Customer service
• Timeliness
• Accuracy
• Quality
• Consistency
• Clarity
• Business insight
• Decision support
• Engagement
• Action focused
• Expertise
• Compliance
• Oversight
The follow on question is, how does Finance become a better business partner? In response, optim2 assess the
quality of your financial information (i.e. the ability to support business decision making) with the level of Finance
integration with the business (i.e. people, process and technology).
INFORMATIONQUALITY
STRESSED ADVISER
“spreadsheet hell”
BUSINESS PARTNER
“continuous improvement”
ACCOUNTANT
“back office bookkeeper”
EFFICIENT CONTROLLER
“limited business insight”
DEGREE OF FINANCE/BUSINESS ALIGNMENT
expertise
optim2 has a strong track record of delivering detailed Finance assessments through a facilitative approach
that engages stakeholders, and is backed by data to justify any recommendations. The outcome includes
identification of opportunities for improvement, a fully defined future state operating model (organisation
structure, headcount, accountabilities), and transformation plan to execute. The benefit is a business case for
change, supported by a practical and realisable plan.
optim2 typically delivers a detailed review of the Finance organisation in 4-6 weeks.
3. QUESTION TYPICAL SCOPE
How do we design, build and implement high
performing Finance processes?
• Re-design processes
• Build policies and procedures
• Support transformation
Process improvement, including standardisation, provides an opportunity to compare processes across an
organisation, as well as against better practice, to support the design and build of a high performing future state.
Typical optim2 process improvement initiatives include the transactional processing areas of Purchase to Pay,
Payroll, Invoice to Receipt and Payroll, however, often include other Finance processes such as month end close,
reporting and analysis.
optim2 CAN PROVIDE INSIGHTS ON HOW TO IMPROVE...
PURCHASE TO PAY INVOICE TO RECEIPT PAYROLL
• Purchase Orders
• Payables centralisation
• Trading terms
• Purchasing Cards
• Invoice automation
• Supplier catalogues
• Credit assessment
• Receivables centralisation
• Trading terms
• Collections management
• Electronic invoicing
• Receivables automation
• Time and attendance
• Payroll centralisation
• Payroll cycles and processing
• Payroll reporting
• Employee self service
• Award interpretation
WHAT ROLE DOES SHARED SERVICES PLAY?
As part of process improvement, Shared Services is often considered to enable efficient service delivery through
standardisation and consolidation of ‘scattered’ common activities. In considering which activities are best suited
for a Shared Service, the following matrix can be of assistance:
BUSINESSORIENTATION...
ENTERPRISE
GENERIC
CORPORATE/
FINANCE LEADERSHIP
Board reporting
Merger and acquisitions
Risk management
TRANSACTION SHARED SERVICE
Credit
Accounts Payable
Payroll
General Ledger
BUSINESS
UNIQUE
BUSINESS EMBEDDED
Performance evaluation
Commercial negotiation
Pricing strategies
BUSINESS EMBEDDED
TRANSACTION PROCESS
Management reporting
Purchasing
TECHNICAL SKILLS LOW COST PRODUCER
ADDS VALUE THROUGH...
IMPROVING PROCESSES
expertise
optim2 are subject matter experts in leading Finance process improvement initiatives, including those involving
Shared Services. The outcome is the rapid transformation to a high performing future state, with the benefits
being improved efficiency and effectiveness, and customer service.
optim2 typically delivers the full “end to end” re-design of a Finance process in 6-8 weeks,
with implementation to follow.
4. MEASURING PERFORMANCE
QUESTION TYPICAL SCOPE
What are the right measures for Finance,
and how do we compare?
• Finance dashboards
• Service level agreements
• Benchmarks
• Better practice reviews
Performance measurement helps facilitate the continuous improvement of the Finance organisation, with three
core components that optim2 is regularly engaged to assist organisation’s with:
1. Finance Dashboards
Finance dashboards provide the opportunity to monitor Finance organisation performance, with each team accountable
for the results. Measures should be relevant and accessible, and include a balanced view which combines volume and
performance metrics for each function.
Depending upon the maturity of the function,
a selection of the following information may
be included:
• Process (measures, targets)
• People (turnover)
• Customer (surveys)
• Finance (budget)
• Achievements
(continuous improvement milestones)
2. Service Level Agreements (Partnership Agreements)
Service Level or Partnership Agreements provide a basic contract between Finance and the business and assist in
managing expectations and performance. Key components include:
• An overview of the services provided
• Key activities delivered by Finance including business input required
• Customer requirements of Finance, and the measures that demonstrate performance
• The factors that may limit Finance to be able to meet the designated performance levels
3. External Benchmarks
External benchmarks provide a baseline against which an organisation can compare itself to peers. While benchmarks
in themselves do not provide the answers, the better practice attributes of high performing organisations often provide
guidance that an organisation should consider as part of their continuous improvement initiatives. optim2 has access to
a range of benchmarks, including those from the Australian Benchmark Initiative (see overleaf).
expertise
optim2 is regularly engaged to assist organisation’s in measuring the performance of their Finance function.
This can include building dashboards, defining key metrics, agreeing service levels, and benchmarking
between companies, or against external sources.
EXAMPLE: Basic Payroll dashboard
5. optim2 is a sponsor of the Australian Benchmark Initiative. The Australian Benchmark Initiative was established
to build a set of Finance benchmarks and facilitate the sharing of Finance better practice between Australian
companies. Over the past couple of years the Australian Benchmark Initiative has become the leading source of
Finance benchmarks in Australia, with benchmark and better practice studies including:
Purchase to Pay • Receivables • Payroll
Over 50 of Australia’s leading organisation have participated. With median revenue of $850 million, median
headcount of 1500 employees, and 35% being ASX listed, the studies provide a good quantity and quality of
respondents. Each study focuses on a range of qualitative and quantitative factors, including metrics, process
maturity and future improvement strategies, to allow companies to assess:
What does good look like?
How am I performing against my peers?
What are the attributes of a high performing function?
What is the optimal headcount for my team?
What should the cost of my function be?
What are the key trends?
The quality and number of participants has ensured that the findings are a reliable reflection of what is currently
happening across Australia, and provides clear insights and guidance for Finance process owners and business
decision makers. More information can be found at:
www.australianbenchmarks.comwww.australianbenchmarks.com
6. www. .com
SYDNEY
Level 12
309 Kent Street
Sydney NSW 2000
+61 2 8071 4155
MELBOURNE
Level 8
350 Collins Street
Melbourne VIC 3000
+61 3 8676 0644
ASSESSING FINANCE
IMPROVING PROCESSES
MEASURING PERFORMANCE