In this business architecture blog post, let’s review, how a Finance Business Capabilities Model helps in accelerating the transformation of the finance function. Of course, accounting and finance capabilities model has to be an integral part of a broader, overall transformation framework.
The accounting and finance function is undergoing tremendous change, which most observers feel, is for the better. While hitherto finance was deemed a bean counting exercise purely, today, the finance function is seen as a holistic approach to funding, budgeting, allocation, paying and receiving, and profitably managing the enterprise. It includes a varied set of services, requiring diverse capabilities, skills, and competencies to achieve the overall record to report value stream successfully.
However, the accounting and finance function has several challenges including an array of complex systems, byzantine processes, arcane procedures, and disjointed experiences. Some of these difficulties are to be expected as finance function is as old as the concept of business itself. Other issues and complications are mainly due to factors such as mergers and acquisitions, and a patchwork of legacy systems and processes. Irrespective, the status quo of how accounting and finance functions are managed is not acceptable.
To jump-start, a finance transformation, a strategic capability framework of what accounting and finance functions do and a process framework encompassing the value streams and activity flows is an essential ingredient. As a part of the business architecture, two of the most critical deliverables are an Accounting and Finance business capability Map and an accompanying Value Stream model. We will address the value derived from Finance Value Stream mapping in a separate blog post. In this post, we will focus on how Accounting and Finance Capabilities Model help influence and drive the Finance transformation.
An Accounting and Finance Capabilities Model includes a logical grouping of accounting and finance functions defined at multiple levels of granularity. After completion and adoption of a finance capability model, the transformation teams can use the model to accomplish the following:
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