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Finance transformation: Assessing your finance function


Enabling finance to move from a back office position to a strategic innovator is one of the first steps in modernizing your finance function. No longer is the only role of the finance function to process, gather and report data. The current state of finance is moving beyond transactional to strategic, with new demands, such as improving insight and action, supporting business goals and strategies, and increasing business agility and risk management.

To achieve these goals, the finance function must be tightly integrated with the business leaders to understand their needs, provide better, more relevant and timely data, and be a part of the decision-making process.

The new foundation of the finance function includes a more efficient reporting process, ideally a near real-time reporting and fast month-end close process, to keep information relevant for effective decision-making. The evolution of modern enterprise resource planning (ERP) software, financial planning and analysis resources, and corporate performance management (CPM) systems and tools have allowed us to better achieve these goals, and made data easily accessible by the decision-makers.     

To capitalize on growth opportunities, you must modernize the functionality of your finance operations. If finance is still more transaction-focused, increase alignment with your organization’s strategy, and ensure it is proactive, rather than reactive from a people, process and technology perspective. Assessing the maturity of your finance function through periodic gap assessments can help you understand where your deficiencies may lie, and how to implement a plan for improvement.

The checklist below can help you determine the maturity of your finance function. The more you respond in the “Strategic business partner” column, the more your finance function can provide meaningful and timely insight and information to support the strategic vision of the business. 

How mature is your finance function?

For each facet on the far left, determine whether your finance function is transactional, a business partner or a strategic business partner.



Business partner

Strategic business partner

Strategic planning

  • No formal planning
  • Subjective decision-making
  • Formal, but disconnected planning
  • Limited data used in decision-making
  • Integrated planning
  • Objective data-driven decision-making
  • Financial and operational resources matched to capital required to execute strategic initiatives

Budgeting and forecasting

  • Annual budget preparation
  • Budget and forecast preparation
  • Moderate understanding of key drivers
  • Rolling forecasts
  • Thorough understanding of key drivers with an understanding on forecast accuracy and predictability

Management reporting and analysis

  • Reports indicate whether high-level targets were met
  • Manual process
  • Standard, recurring management reports with detailed analysis
  • Ability to drill down on results as needed
  • Drives re-forecasting decisions
  • Real-time results
  • Dashboards and scorecards with key performance indicators (KPIs)

Planning accuracy

  • Material variances in planned to actual performance explained
  • Reasonably accurate planning
  • Predictability in planning, resulting in increased target accuracy

Risk management

  • Limited understanding of key business risks
  • Identification of select upside and downside risks
  • Identification of key upside and downside risks with proactive planning based on likelihood and impact of events

Organization structure

  • Decentralized business planning functions
  • Scorekeeper role
  • Centralized business planning
  • Limited strategic influence
  • Centralized function providing decision-making support
  • Tightly integrated and aligned with other business units


  • Disparate systems and no one single data truth
  • Integrated and automated technology (such as corporate performance management and business intelligence systems)
  • Full utilization of corporate performance management and business intelligence software
  • Common information platform
  • On-demand self-service culture


The checklist is a quick way to understand where you fall on the maturity continuum. If you aren’t where you want or need to be, completing a deeper dive with a finance assessment to better understand your existing processes, policies, bottlenecks, use of technology, risks and controls is the next step. Once you know where you are, develop a road map, timeline and prioritization based on the cost benefit to the business to remediate.

This process will allow you to decrease operational and functional gaps, and improve your competitive advantage and your ability to make better business decisions. In addition, customer and employee satisfaction increases, and the stronger alignment allows you to meet goals more effectively.

When the finance function is more mature and it is a true strategic partner in the business, you utilize the best resources to their strengths, invest in technology, evaluate a finance assessment and challenge “the way it’s always been done” to increase success. Ultimately, a mature finance function will help drive the strategy, profitability and shareholder value.

For more information on increasing the efficiency and effectiveness of your finance function, read our recent article, Modernizing the finance function through finance transformation.  


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