A preoccupation for CFOS in today’s global economy is how they can shape and evolve the optimal finance model to drive business performance.
Increasingly, finance and accounting delivery through shared services and outsourcing is playing an important part in optimizing the structure of the finance function.
A breakfast meeting that included a keynote address and the panel discussion focused on the challenges, issues and opportunities in finance transformation through shared services and outsourcing was jointly organised by ACCA (the Association of Chartered Certified Accountants), the global body for professional accountants, and The Sri Lanka Association of Software and Services Companies (SLASSCOM) at Cinnamon Grand recently.
The session presented insights from experts on finance transformation and the use of shared services and outsourcing. The presentation explored current issues, challenges and opportunities, and presented unique perspectives on how successful transformation programmes can be delivered.
The session was based on report developed and produced by ACCA. The content was created from a series of interviews with shared services and outsourcing experts from across the world.
The keynote speaker, Ronnie Peiris, Group Finance Director and Executive Director of John Keells Holdings, outlined the many steps and key areas that can be used to improve this transformation. ACCA’S report showed that if the expert respondents are representative, there is no turning back from the adoption of shared services and outsourcing as a meaningful finance transformation tool. The benefits included transparency, lower cost, greater efficiency, standardization and improved governance and more are now taken for granted by the industry. It was also noted that there were different approaches to finance transformation that were evident. The application of these delivery models is however still a work in progress and different approaches to finance transformation are evident. Some leaders use shared services and outsourcing as a ‘Functional Fix’ improving finance operations and processes, while others see finance transformation as a means to transform the business rather than stop at a better finance function. Regardless of the endpoint, finance leaders stand firm in their belief that transformation is a journey not only in terms of value creation but also in the evolution of the finance model.
There was also a strong relationship between the finance model and the business transformation ambition. Where a ‘Functional Fix’ is sought, the sourcing model of choice is outsourcing. Conversely, those finance leaders seeking to drive business performance grapple with a much greater degree of model complexity. They see beyond the finance function and focus on the ‘connectedness’ of the finance function to the rest of the business transforming and aligning end-to end processes regardless of where they are housed. This requires significant influencing capability internally and externally. They understand that they must focus on the business need evaluating the best means to integrate finance into the business in order to be effective.
Whilst cost remained a starting point, it was also noted that today’s finance leaders are becoming more attuned to provide skills, placing greater demands to improve their capability. They are consciously mapping solutions and considering the providers ability to create value, flexibility and their service approach against their transformation requirements, as opposed to simply adopting a classic straightforward buyer– provider relationship for finance and accounting services.
Finance leaders and outsourcing providers alike named change management as the biggest barrier and in particular cited the organisations’ inability to assimilate new ways of working as a key challenge. Concerns about the capability of the retained team were equally evident and it is now being questioned of how the retained team adds value.
Another concern of finance leaders were about the natural misalignment between themselves and the provider, believing that service delivery is often sub-optional, with different incentivisation approaches, varying transformation expectations and goals and different economic interest in transition speed. Finance leaders therefore expressed concern that some providers promote a ‘one size fits all’ approach.
There was also a growing realization from finance leaders of clients that effective sourcing is synonymous with service and that while cost benefits are achieveable, service benefits are rather more elusive. Increasingly, finance leaders differentiate between the quality of service delivery they receive and the achievements of service level agreements.
A panel discussion followed which was moderated by Jehan Perinpanayagam, with eminent panelists that included Dushan Soza, Managing Director, WNS Global Services Sri Lanka, Trevin Jayasekera, Group Finance Director, Brandix Lanka, Vipula Gunatilleka, Chief Corporate officer, Aitken Spence Group and Ronnie Peiris, Group Finance Director and Executive Director of John Keells Holdings.
Ronnie Peiris, Group Finance Director and Executive Director of John Keells Holdings
(From left): WNS Global Services Sri Lanka Managing Director Dushan Soza, Brandix Lanka Group Finance Director Trevin Jayasekera, Aitken Spence Group Chief Corporate Officer Vipula Gunatilleka, John Keells Holdings Group Finance Director and Executive Director Ronnie Peiris and the moderator for the session Jehan Perinpanayagam