Advising from a Place of Experience

SynFiny Advisors helps companies of all sizes and industries grow and flourish.

It is often those with the most experience who give the best advice. SynFiny Advisors is no exception. Founded in 2014 by Jeff Wuest and Graham Cater—corporate executives with extensive financial management experience—SynFiny is rooted in the idea that seasoned advisors—people who have truly been there, done that—are ideally positioned to guide companies to success.

Today, the Cincinnati-based management consultancy firm with a global footprint is the second fastest-growing company in Ohio, with two years on the Inc. 5000 and more than a dozen offices spread over five continents. Since its foundation, SynFiny’s mission has expanded to encompass key functions of leading and managing an enterprise. Fueling this mission is an enviable talent pool of multi-functional advisors from a variety of industries and a shared desire to embrace new projects and solve new problems.

Best In Class Advisors

With an average of 25 years under their belts, SynFiny’s seasoned advisors boast sterling credentials and impressive track records, as well as an eagerness to share their expertise. “Because many of the people we put on engagements have seen this or that problem before, we’re likely to solve it faster,” says Christian C. Lee, North America managing partner. Many of SynFiny’s 250 advisors have held leadership positions at established organizations; they often work exclusively for SynFiny. “These are people who don’t want to stop learning and being active,” Lee says. “They like working on engagements, they enjoy the flexibility, and they want to be part of something great.”

With its hometown and international offices, SynFiny manages to be both globally minded and locally accessible. Its curated roster of advisors works with companies on mergers and acquisitions, strategic planning, business process transformation, source-to-pay, financial planning and analysis, information technology, supply chain management, and other services. “For a small company, we’re diverse not only in the type of work we do, but also in our ability to support other international companies,” says Wuest.

Eager to roll up their sleeves, advisors often embed in the companies they’re assisting. Whether they’re overseeing a tricky merger or helping a company boost profitability, SynFiny’s advisors will run meetings, draw up roadmaps, coach managers, and even sit in for C-suite roles when companies are changing leadership. “It doesn’t matter if the proposal is $20,000 or $2 million or for a public, private, or nonprofit entity. We give the same caliber of service to all clients, and we never turn down small gigs,” says Lee. “We think in terms of relationships, and we always keep in touch.” Not surprisingly, 70% of SynFiny’s contracts are repeat business.

Since SynFiny’s inception, it has added to its client list—100 and growing—and has developed strong relationships all over the world. Yet, one thing has remained constant: the company’s mission to bring great people together, strive for excellence, and serve clients with honest, insightful advice that helps them grow and flourish.

The Importance of Finance to the Startup

A Japanese proverb reads, “Vision without action is a daydream. Action without vision is a nightmare.” This proverb holds true, many times, for the entrepreneur as they strive toward success. Either there is too much vision and too little action, or vice versa. In either case, the entrepreneur is destined to either live the daydream or nightmare.

What causes the daydream or nightmare scenario for the entrepreneur? In most situations, it is trying to become the expert across too many diverse areas. The majority of entrepreneurs have a brilliant service or product idea based on a prior expertise, passion or interest. However, when they launch their startup business they now need to be an expert on marketing, sales, finance and accounting, human resources, manufacturing, research and development, and information technology – and chief executive of the business. These new areas are not where they have expertise, passion or interest; they are forced into it by necessity.

The SynFiny Advisors’ Definition of FP&A

  • Critical value creation processes, which require a deep understanding of finance, modeling, data systems and processes, and accounting, all married to deep business knowledge.
  • Typically combines financial and non-financial data as required to create strategic and operational financial plans.
  • When done well, these processes are a clear competitive advantage and thus are viewed as critical by a firm’s owners and senior leaders.

The entrepreneur is thrown into the “deep end of the pool” to gain experience. There is a 50/50 chance the entrepreneur sinks or swims, but even if they swim it may be too late to deliver a successful startup as they focused on income statement preparation, pro forma financials, or book vs. tax depreciation schedules. (Yes, yucky finance and accounting!) Instead, the entrepreneur should be focused on consumer or customer-centric activities like marketing development, fast cycle product development and testing, or design execution to delight the consumer or customer.

The purpose of this article is to explain how a Finance leader helps the Entrepreneur through each phase of the startup.

Critical Development Phases of Financial Leadership

The chart below shows where Finance plays a role for each of the critical developmental phases of a new business.

Seed - Funding strategy, Financial strategy, Competitive Analysis; Start-Up - Funding/Investors, Tax/Accounting, Simple Budgets; Growth - Funding Investors, Investors Reports, Budgets vs. Actuals; Maturing - Investor Relations, Ongoing Financials, Capital/Cash Plans.

“Finance is the key owner of critical business processes.”

-Jeffrey S. Wuest, SynFiny Advisors

Seed or Idea Phase

In the initial ideation phase of a new company, it is necessary to penetrate and understand the financial and funding strategies of the company. This includes an assessment of the competitive environment and market understanding to determine the size of the market, pricing and ease of entry. The funding at this phase may come from friends and family or small “angel” investors. To note, even at this phase the investors MUST be accredited to avoid issues later.

Startup or Start of Sales Phase

As the idea is validated further, it is necessary to start better understanding the exact funding needs. This is confirmed as part of the pro-forma financials development required by investors (balance sheet, income statement, cash flows). These are going to be more detailed from the initial seed phase of analysis since at this point it will be necessary to price and cost the product or services. A large part of the investor deck will be coordinated or owned by the Finance leader. At this point in time you will start asking for funding from investors (accredited angel investors or private equity mostly).

Growth or Rapid Sales Phase

The product or service is now out in the marketplace. The sales have taken off and now there is greater need for deeper knowledge and understanding of the financial structure of the business, which will also be needed as there will be further investments from investors (private equity or venture capital). The investor deck will now be supported by the detailed actuals and financial projections.

Maturing or Stable Sales Phase

The business has experienced rapid growth and is now beginning to slow down, from a fairly large base of revenue and profit standpoint. The management requires fully developed financials, capital/cash plans, and reporting or analysis to sustain the business. In addition, there is no need to find new investors but simply keep the existing ones updated on financial progress.

In all of these phases, Finance plays a key leadership role in ensuring the financials are accurate and well communicated to both the entrepreneur and the investors.

Turning Startup Financial Vision and Strategy to Action

We are now to the detailed action steps required to turn the initial financial vision and strategies into reality. This is the point where the “dollars meet the cents.”

This is also the step in the visioning process where Finance insists the entrepreneur check and confirm sufficiency of competitive understanding, availability of funding, cost assumptions, and realism of the startup plans.

This happens at each phase of the new business financial flow. The Finance leader and Entrepreneur will want to confirm the key financial assumptions at each phase of development. When there is a major change, they will want to go back and request more funding, resources, or time from the investors. A good Finance leader and Entrepreneur will never surprise the investor with sudden bad news; they are continually reviewing, reassessing the plans, and communicating the current reality.

A few examples of where the Finance leader helps the Entrepreneur:

  • Financial strategy exists, which supports the growth of the company
  • Competitive analysis and market understanding (includes market size)
  • Create the initial investors deck, working with the entrepreneur and other experts
  • Attend investor meetings and explain the financial aspects of the business
  • Pricing (based on competition/consumer) levels to support profitable growth
  • Budgets exist for both overheads and marketing spending
  • Identifying ways to keep the organization lean and the burn rate slower
  • Challenge (based on external understanding) all plans for spending
  • Create Finance training materials to build capabilities for new staff

The Path Forward… Find Your Financial Sage

There are a few critical questions the Entrepreneur should ask when assessing and selecting a Finance leader:

  1. What experiences have they had in the industry or other businesses?
  2. Do they feel comfortable talking to the investors, sharing the financials?
  3. Do they challenge the Entrepreneur? (i.e., on assumptions of the business plans, financial plans, investment or spending choices)
  4. Did they have experiences with all aspects of Finance and Accounting?
  5. Did they have a Finance leadership position in the past?
  6. Do they have local or global contacts that can help?
  7. Are they providing pro-bono, low cost fees, or reasonable salary for the work?

And of course, the Entrepreneur needs to make sure they both trust and respect the Finance leader. This person will be one of the key leaders of your business.

F. Scott Fitzgerald wrote in The Crack Up, “In a real dark night of the soul it is always three o’clock in the morning.” The Entrepreneur should see be able to see themselves picking up the phone, even in the middle of the night, to ask their Finance leader just about anything. There will inevitably be many down moments in the startup journey and the Finance leader needs to be a trusted advisor to listen and help guide the Entrepreneur through it.

In Closing…

This article hopefully provided a useful reminder about how obtaining funding and keeping the organization lean and focused on the biggest opportunities are key for a startup to survive. A strong Finance leader should be one of your key partners who can take on those responsibilities, letting the Entrepreneur focus on what they do best.

Crisis Management – Balance Sheet and FX Management

Insights to managing balance sheet components in volatile non-U.S.$ currencies.

SynFiny Advisors has developed a series of Crisis Management Insights to help you strengthen and grow your business after having faced a major business interruption.  Our objective is to provide a framework that allows any business (no matter how big or small) to maintain focus while dealing with the multitude of distractions that take you away from your core business.   Our advisors’ share their seasoned experiences and “been there, done that” practical advice to not only survive but thrive in a crisis situation.

This Insight will address the key actions to take during major economic and political crises that impact market sizes, availability of funds and that create a flight to safety ($), thus impacting soft currency countries resulting in high inflation and volatile consumer markets.

Discussion

As a result of the Coronavirus pandemic, there has been a flight to safety, where investors move to strong currencies, i.e. U.S. dollars, thus resulting in the weakening of developing market currencies of 20-40% as it happened to Mexico, Colombia, Peru, and other markets even before these countries were impacted by the virus. Next, we are exposed to closed businesses, low sales, lack of liquidity and reduced consumption. The perfect economic storm.

When faced with a perfect economic storm it results in lower sales, higher local production and operational cost and a devalued currency. Surviving these challenges requires cash – CASH IS KING – and the optimization of the balance sheet to avoid currency risks and to better utilize assets like inventory.

Did you have enough cash to weather the crisis? Do you have line of credits available? If outside of U.S., could you borrow in local currency?

If borrowing is available, that is great move in soft currencies impacted by devaluation and inflation.

Where are your profit margins after you have been impacted by devaluation?

If your business has a margin of 20%, with a 20% devaluation (Mexico) and a 50/50 local to imported cost structure, you are starting the crisis with a 10% margin, if devaluation is 40%, you are at breakeven.

So, questions to consider when you are facing these cash challenges:

  • Do you have a good system to forecast scenarios for margin and cashflow?
  • Once you know what your margins are, do you need pricing?
  • How well are you utilizing working capital?
  • Receivables – could you collect sooner? If not, create an incentive for prompt payment, offering a larger discount.
  • Accounts payable – is it possible to extend payment terms?
  • Are you eliminating low moving and unprofitable sku’s?
  • Could you avoid hard currency payables?
  • Local sourcing – could you avoid importing finished goods, is it possible to locally manufacture?
  • Cost savings – is it possible to reformulate? Cheaper products, trade down as there is less acquisition power?

Key Takeaways

Cash is king in times of crisis. Careful analysis and management of the balance sheet is of utmost importance. Avoid debt in hard currency. Incentives for prompt payment of receivables is a most. Localization in local currency of manufacturing inputs is critical. Careful attention is required to profit margins and cost reductions and or pricing are key in maintaining dollar-based profit margins.

Conclusion

SynFiny Advisors brings talented “been there, done that” experienced managers to solving client challenges. Each engagement brings measurable, pragmatic, and actionable recommendations. We assist in developing Business Process Transformation scenarios to survive changing economic conditions and minimize disruption to your business. Our approach is very simple, we Define, Design and Transform. And in doing so, transform your business from ‘existing’ to ‘exceeding’.

Download and read the full insight.

For more information, contact Jose A. Alonso (jaalonso@synfiny.com).

Other contributing authors to the “Crisis Management” series include the following:

Crisis Management – Major Devaluation in Developing Countries

Insights to help you prepare and sustain your business during a business interruption

SynFiny Advisors has developed a series of Crisis Management Insights to help you strengthen and grow your business after having faced a major business interruption.  Our objective is to provide a framework that allows any business (no matter how big or small) to maintain focus while dealing with the multitude of distractions that take you away from your core business.   Our advisors’ share their seasoned experiences and “been there, done that” practical advice to not only survive but thrive in a crisis situation.

This Insight will address the key actions to take and important considerations during major economic turmoil and devaluation in a developing market. Developing markets are increasingly important for all international businesses, however, they do present high level of risk and uncertainty that business needs to plan for.

Discussion

In most emerging markets, major economic crisis is something that needs to be expected and anticipated. Following are 5 general guidelines for business to survive such turmoil and minimize negative impact to the business.

  1. Be Agile – A major currency devaluation can be sharp and unexpected, and lead to significant economic contraction short and mid-term.  It is important to acknowledge the new reality quickly and adjust your plans and targets accordingly rather than stick to the plans made for a pre-crisis reality. To minimize exposure, businesses need to be agile and internally align on key points of a currency crisis management plan. These points can include:
    • Acceptable levels of credit terms to customers and when those should be reduced/withdrawn.
    • Pricing principles including rate of devaluation that will trigger the move to cash-only sales or stop shipments.
    • Working capital targets/cash flow protection measures.
    • Policy regarding local salaries and headcount reduction.
  2. Prioritize – Non-crisis business factors should not be a main concern during the abnormal period of the crisis. During the period of high volatility normal business priorities, e.g. market share, will likely play second fiddle. Asset protection might become the critical consideration when the market is in meltdown. Whilst crisis can often be an opportunity to build market share, new investment is best considered after the market behavior has returned to a reasonable level of normality
  3. Plan for the Worst – Full market stability is unlikely to resume immediately following the return of currency stability. It is important to monitor the situation closely and not assume/plan for a fast recovery.  Crisis will create long term ripples in economy, which will be further affected by government policies and restrictions, financial stability of customers and the banking system. It often takes more than 6 months for the full implications to feed through.
  4. Do Not Rush, Wait It Out – Currencies that are going through a major correction are likely to overshoot their new equilibrium level – and will bounce back somewhat. There is a risk of taking up-pricing too much too quickly that would be difficult to reverse.  During the periods of very rapid currency devaluation, halting shipments is a lower risk option than trying to keep up with devaluation through pricing.  Shipments in the period of very high volatility can create exposure for your business and your customers, complicate implementation of further price changes and undermine your credibility.
  5. Support Your Partners – The crisis is a true test of a strength of a business relationship. People tend to remember how others treated them in such circumstances for much longer than the crisis lasts. Talk to your key long-term partners, both customers and suppliers and decide where you are prepared to run risks and give extra support.

Key Takeaways

Major devaluation in a developing country requires organized and structured approach – by addressing the key risk areas with agility, planning for worst-case scenarios and prioritizing management can minimize exposure and create a basis for faster recovery.

Conclusion

SynFiny Advisors exists to bring talented “been there, done that” experience to bear on solving client problems.  Each engagement results in measurable, pragmatic, and actionable recommendations. We assist in developing Business Process Transformation scenarios to survive changing economic conditions and minimize disruption to your organization and business partners. Our approach is very simple, we Define, Design and Transform. And in doing so, transform your business from ‘existing’ to ‘exceeding’.

Download and read the full insight.

For more information, contact Natalia Beketova (nvbeketova@synfiny.com).

Other contributing authors to the “Crisis Management” series include the following:

Crisis Management – Business Survival Kit

Insights to help prioritize and optimize business critical operations during a crisis

SynFiny Advisors has developed a series of Crisis Management Insights to help you strengthen and grow your business after having faced a major business interruption.  Our objective is to provide a framework that allows any business (no matter how big or small) to maintain focus while dealing with the multitude of distractions that take you away from your core business.   Our advisors’ share their seasoned experiences and “been there, done that” practical advice to not only survive but thrive in a crisis situation.

During times of crisis, there are two fundamental questions that every company must ask: How do we eliminate discretionary ‘nice to have’ processes so we can better support essential ‘have to have’ business operations? Whether you are in manufacturing where maximizing revenue or profit may be the most critical objective or a hospital where patient care is most critical, value is unique for each business during a crisis. Therefore, take the necessary steps to ensure that your organization can continue to maximize value creation during difficult times. Here are a few considerations as you position your organization to thrive during a crisis.

Prioritize Mission Critical Business Processes

Your ability to distinguish between ‘have to have’ and ‘nice to have’ processes is key for setting your business up for long-term success during a crisis.

‘Nice to Have’: Discretionary functions and processes that have minimal impact to the business, including all non-core functions that can be outsourced or be put on hold until resources become available.

‘Have to Have’: Mission critical functions and processes that dramatically curtail or stop business production, including those that are responsible for generating revenue.

In a crisis, ‘nice to have’ business processes can distract your organization’s focus from mission-critical actions. However, rarely do these ‘nice to have’ processes exist in isolation. Instead, they exist within an interdependent, dynamic system where decisions can have unintended consequences. For example, decisions meant to maximize performance according to local measures may lead to damages in global performance. Therefore, a holistic, systems-level approach must be used for making decisions about which processes are ‘nice to have’ and which are ‘have to have.’

Optimize Mission Critical Business Processes

Once you have determined the mission critical operations for your organization, focus on optimizing these key business processes so the organization can maximize value creation. Here are four key steps that your organization can take to optimize mission critical operations during a crisis.

  • Optimize Flow – Optimize the flow of your business processes. The primary objective of the system (your business) is to improve flow (also known as throughput). Multitasking is the number one killer of flow within an organization, therefore eliminating multi-tasking, especially in non-critical business processes, enables your employees to focus on processes that deliver the most value to your organization and your clients.
  • Utilize Non-Production – Do not be afraid of non-production. If a business operation is not mission critical, then freeze those tasks or place them in non-production mode. Use the residual resources to reinforce and limit downtime for critical operations.
  • Abolish Local Optima – Focus on holistic health of your organization in lieu of meeting goals for specific business units. Abolish any local goals or efficiencies if they detract from the overall organizational health.
  • Focus on Process – Use a focusing process to balance flow. Implement ways to ‘buffer’ (i.e. protect) the mission critical processes so that entire system can withstand unforeseen fluctuations and operations can maintain flow. The purpose of a ‘buffer’ is to protect against variability. For example, a real-time monitoring system to make potential problems visible.

Resolve Workflow Issues

Inevitably, you will encounter workflow issues as your streamline your mission critical business operations. Follow these three steps to ensure that your transformation has minimal impact on your business by asking these 3 key steps:

  • Identify the Problem – What is the root problem we are attempting to address?
  • Identify the Solution and Impact – What solution can enable us to continue our mission critical operation during the crisis? What are the potential impacts of this solution?
  • Minimize Conflict for the Business Operation – How can we reduce conflict and implement the solution?

Key Takeaways

  • It is important to determine and prioritize mission critical operations that create the most value for your organization.
  • Streamline mission critical operations by optimizing flow, utilizing non-production, abolishing local optima and focusing all efforts on reinforcing those operations.
  • When workflow issues arise, make sure to find solutions that will minimize conflict for your mission critical operations.

Conclusion

SynFiny Advisors exists to bring talented “been there, done that” experience to bear on solving client problems. Each engagement results in measurable, pragmatic, and actionable recommendations. We assist in developing Business Process Transformation scenarios to survive changing economic conditions and minimize disruption to your organization and business partners. Our approach is very simple, we Define, Design and Transform. And in doing so, transform your business from ‘existing’ to ‘exceeding’.

Download and read the full insight here.

For more information, contact contact Susan Thomas (sethomas@synfiny.com).

Other contributing authors to the “Crisis Management” series include the following:

SynFiny FP&A

Building the Business Case for Finance Transformation

We’ve heard it said that Chief Financial Officers usually come in two flavors: the accountant or the banker. The accountant keeps the books clean, ensures reporting is accurate, and helps the firm take full advantage of the tax code. The banker, on the other hand, keeps the cash flowing, ensures plenty of financial might, and focuses on deal making. 

What’s often missing is an operational emphasis: The ability to use financial data and methods to understand and improve firm results and decisions. To get more operational, the key to success is the firm’s financial and planning and analysis processes, or FP&A. 

Transforming FP&A is essential for Chief Financial Officers (CFO) looking to deliver improved forecast accuracy and faster, decision grade data to their organizations.

  • Critical value creation processes, which require a deep understanding of finance, modeling, data systems and processes, and accounting, all married to deep business knowledge. 
  • Typically combines financial and non-financial data as required to create strategic and operational financial plans. 
  • When done well, these processes are a clear competitive advantage and thus are viewed as critical by a firm’s owners and senior leaders. 

Start with a Vision

As a CFO, when you can combine FP&A with a vision, strategy and action plan, you can more easily gain leadership support and approval to begin the transformation journey. Let us guide you through the process.

A vision statement sets out the future operating model of transformed FP&A and should be an aggressive view of the future of finance in your organization. A vision statement should inspire readers to support it, so you’ll want to use clear and concise wording.

Your vision statement has two primary readers:

  • The C-Suite: The vision statement should read as business-friendly so that leadership will support the FP&A transformation plans.
  • The broader organization: The vision statement should inspire employees and create excitement about the future.

While a vision statement should challenge the organization to achieve more in the future, be sure you outline goals that are attainable. It’s important that your employees understand the long-term goals and can fully envision what’s ahead. To do this, you or your finance leaders may need to share more information than you typically would. This allows the internal organization to see the plan and commit to its success.

Calculator and pen on top of financial papers

Building Blocks of Strategy

With a strong vision statement in hand, the next step is to determine what building blocks you will need to achieve the vision.

A significant hurdle in this stage is determining which aspects of FP&A need to be substantially upgraded from their current state. Consider the various FP&A tasks within a company: 

  • Strategy development
  • New business modeling
  • Forecasting
  • Budgeting
  • Management reporting
  • Analysis
  • Working capital
  • Cash forecasting
  • Capital spending

It can be difficult to determine which of these tasks should change, how they should change, and when they require intervention. Most leaders will want to touch everything, but prioritization is critical. Choosing which tasks to focus on first leads to much more success than trying to change all of the tasks at the same time.

Successful strategies can – and will – change over time as the FP&A transformation areas of focus and timelines change progressively.

The challenge for any CFO is determining the right sequence and depth of change to support the FP&A vision. Look to the company’s vision statement or strategic priorities first to guide your FP&A priorities. Is the company priority product line expansion, then analysis and working capital might be the key FP&A interventions. Perhaps new facilities or equipment are on tap, therefore capital spending and forecasting become the focus.

The key is that your FP&A vision and strategies should be consistent with the company’s overall long-term plans.

Hand holding pen running over business papers

 

Turning Vision and Strategy into Action

With strategies in place to support the FP&A vision, you can now create detailed action steps to support the strategy and turn the vision into reality. Without actionable steps, strategies fall short and visions fall flat.

Before determining specific actions, ensure you have sufficient resources, funding and time to complete the FP&A transformation from beginning to end. If you miss one of these components in planning or need more, you’ll need to either request additional support or return to leadership to reassess the FP&A vision and strategies.

Potential action steps to transform FP&A might look like:

  • Develop pricing analysis tools to increase deal capture and sales growth.
  • Develop budget tools to decrease overall marketing spend.
  • Expand effective unit developed tools or processes to other parts of the business.
  • Document and roll out your best-in-class tools and work processes.
  • Create clear accountability and ownership for tools and processes.
  • Develop simple-to-read, easy-to-access, and anxiously anticipated reports.
  • Create training materials to build overall capability in the organization.
  • Create and leverage multi-function networks inside the firm.
  • Use the network to share or reapply best practices.

When you’ve defined the action steps that support the strategy to implement the vision, review all components with C-level leadership for approval. Leadership support is essential, so continue to refine the approach until you receive full backing.

With a clear vision and actionable strategy, you’ll want to address any company-specific cultural adjustments you may need to make prior to launching the FP&A project.

Two professional women having a discussion

 

Document and Approve the Business Case

Once you have an FP&A vision and strategy, and detailed action plan, along with leadership buy-in, you can now document the business case summary. The business case summary should provide the rationale and benefits of the FP&A transformation process you’ve outlined.

A sound business case summary includes the following:

  • Business rationale for the change: What is driving the FP&A transformation? What business issue does the transformation fix? 
  • Scope of the full project: What is being transformed? Is it focused on one area of FP&A or multiple areas?
  • Benefits realized: What will the transformation project achieve? Will it deliver cost savings, higher sales or improved productivity? Will it improve analysis, transform data into insight, enable better internal controls, or something else? The benefits should be clear and measurable.
  • Company culture impact: Which aspects of the company culture need to support or will be improved by effectively implementing the FP&A vision? Clearly explain the behavior changes that need to or should occur as the FP&A work comes to life. 
  • Required investments or resources: How much is the investment? Which resources do you need? Are they internal or external resources? Are they staff, services or software and tools? Provide an estimated range of spending and resources required and an expected ROI.
  • Intersecting projects: Are there other company projects or initiatives that impact the FP&A project? This could be a new ERP implementation or bookkeeping tools, new tracking or accountability software, etc. Whatever they may be, it is critical to document how the FP&A work intersects with, supports and enhances these allied efforts.
  • High-level timeline: How long will the transformation take? What are the risks and impact of delays? Most projects face challenges and FP&A transformation projects are no different. So being clear about contingencies helps ensure you have C-level leadership support when you hit the inevitable bumps in the road.

When you have created a summary that addresses each of these areas, have C-level leadership review and approve.

Man discussing business ideas

The Path Forward 

With a fully documented and agreed to FP&A transformation vision, action plan and business case summary, you’re ready for next steps. These are typically: 

  1. Assigning a total project lead or owner. 
  2. Establishing a multi-function data and project team. 
  3. Develop the detailed project plans and cascading objectives to individual’s work plans. 
  4. Setting regular action plan updates with C-level leadership. 

These steps structure the transformation process and enable it to run smoothly. 

Because FP&A processes are some of the most critical business functions in any company, it’s essential to keep C-level leadership updated on progress. Also, you’ll need to enlist their support when trying to overcome roadblocks or obstacles during the transformation process. 

Organizational change is difficult. Organizations tend to revert to known, previous ways of doing things. Process transformation faces inertia. But broad involvement and regular communication and feedback from the organization to the project team to C-level leadership will help prevent falling back into old habits. 

Ultimately, with a clear vision, strategy and action plan, you can more easily build support to embark on an FP&A transformation journey within your organization. The benefits are worth the effort: Better data, smarter decisions, improved results, greater impact! You can do this! For more information please visit us online at SynFiny.com.

Successful Team Meeting

Meet the Author

Jeff Wuest

CEO & President of SynFiny Advisors

Jeff Wuest is a business strategist and visionary, and he helps companies to achieve extraordinary growth.

Today’s environment demands the right blend of innovation, strategy, and risk-taking to define new opportunities, be first to market and lead the industry. Jeff works with leaders to push the boundary of what they think is possible, make big strategy bets without risking it all, and create an environment where they can achieve 10x growth.

Jeff’s expertise includes strategic planning, rapid market expansion and operational scaleup. He’s an entrepreneur with experience mentoring startups and emerging companies, as well as a strategic advisor to multi-billion-dollar corporations. Jeff has over 30 years of experience developing game-changing strategies across different industries, categories, products and services. His focus is helping forward-thinking leaders succeed with breakthrough strategy, execution and operations.

Currently, Jeff is the CEO of SynFiny Advisors, a global business consultancy firm, which was recognized by Inc Magazine’s, Inc. 5000, and ranked in the top 500 of the nation’s fastest-growing private companies.

Expertise

Leadership, Strategy, Operations, Business Development, Startups, Business transformation, Scaleups, Entrepreneurship, Innovation, Finance & Accounting, FP&A, Real Estate

3 Key Pitfalls to Avoid in ANY Automation

Weak foundations never make stable structures. Creating the right groundwork for automation or bots or Robotic Process Automation (RPA) or whatever name you want to call it is essential if you do not want to regret the outcome later. The terms have been used interchangeably in the article below. No automation is inexpensive; this article serves as a helpful checklist as you plan the rollout of your automation project (or work out what went wrong).

The below three prerequisites focus on process side of automation which at times I have seen get overlooked during the planning phase. Other elements like organization readiness, presence of a strong leader, committed executive team, and metrics to monitor performance are equally essential.

These prerequisites will need to be tweaked based on the kind of technology, industry, and scale of the RPA being implemented, but act as a good sanity check for any automation project.

WHY are you doing automation?

Start with the why first.

Is the intent to automate process? Say you want to replace manual effort with machine. The focus is on ‘as-is’ process. It will help to save costs by labor arbitrage. Your core process remains the same, it’s just that machines have come into mix. You are performing the same process – but more quickly. These are normally done within a functional group and have minimum impact on rest of the organization e.g. implementing a workflow approval tool in payables function for vendor invoices. The major impact will be in payables functions, approvers will have to just learn how to approve invoices electronically. Invoices, though, will be processed faster.

Is the intent to improve process? Automation does not question the sanctity of the tasks being performed. It will simply carry out the tasks, and whether they are redundant today or not is to be evaluated by human intelligence. Organizations must revisit the process, dissect it into tasks or activities that are being automated to ensure ‘waste’ is eliminated rather than automated. Process mapping and lean tools will be useful at this stage. Savings of standardization, consolidation, reduced rework are achieved over and above labor arbitrage. In the above payables example, before you implement the new workflow system, revisit the payables process to check the need for consolidating number of approvers, reducing number of cost centers, having backups for delays. Process is as good as the people supporting it; if an approver is not approving, a manual or electronic system is useless, but may be a backup approver, so automatic approval or escalation will help.

Is the intent to transform process(es)? This is process improvement+++. When processes are not only looked functionally but also horizontally across the organization in light of future strategy and direction, that’s when transformation takes place. In the above payables example, if we replace manual goods receipt with automated entries, manual invoices with e-invoices, manual matching to three-way matching and manual checks to ACH vendor payments – the result is payables transformation. Then it’s not automation but reengineering of number of functions and it’s not incremental improvement but significant transformation. Vendors, receiving, procurement, payables, and reporting functions everyone will be undergoing a change. This will need rewriting the standard operating procedures.

Answering the ‘why’ helps to check organizational readiness and the need for buy-in in the organization. Transformations should not be started unless there is a strong sponsor and complete buy in from the leadership.

Automate ‘processes’ not activities

Process is a series of activities when performed with a defined input, established procedures and measurable outcome. Process is different from ad-hoc activities. If your tasks are leading to rework it is activity not process.

Organizations need to automate processes not activities. The first step is to wrap those activities into process. Let’s say the automation to be brought about is on a matured process, i.e. a process which has been performed over a long period of time with established rules of how to handle outliers and exceptions. This is a good candidate for automation.

If similar automation is tried to be brought about on activities or process which have frequent outliers and exceptions, however, the machine will have to stop, learn, and incorporate at every corner – an uphill learning curve which will be cost inefficient. If in transaction processing of accounts payable there is standardization for all or types of invoices you can automate it, but if every invoice has exceptions, robots will spend a significant time learning rather than delivering. Lesser the customization, better the results.

Automation needs rules which it can code. If rules are not defined, it is learning on the job, which is possible but not effective.

What will you do with extra efficiency?

Automation will reduce costs and free up resource time. Have you planned on how to utilize the free time of your resources? If the intent of automation was to cut costs, downsizing your team would be a natural step; however, do not rush into it. There will be teething challenges in the implementation of new technology so have a gradual ramp down plan for resources. You can also look towards moving your resources to downstream processes or other processes. Moving to downstream processes will shorten the learning curve of the resource and he or she will have full understanding of end to end process.

If you can identify value added projects for your functions, things that always went on the backburner due to day to day operations, it would be great to identify them with the freed-up resource capacity. More often than not, you will realize that this contributes to further improvements.

Automation takes time and never comes easy; relentless disciplined pursuit is needed to finish the marathon. Answer the ‘why’, remove activity vs process ambiguity and optimize the resources and you are far more likely to ensure automation delivers what you had expected it to.