Nikesh Valji, Accountant-turned-Finance Transformation Consultant, explores why project management skills are essential within modern finance teams.
Traditionally, digital transformation projects have been led by the IT team alone. In those cases, the only requirements were usually: ‘deliver the project on time and within budget’.
However, people and organisations have become more technologically savvy, especially within the finance department. Finance managers may now find themselves involved with transformation projects such as enterprise resource planning (ERP) implementations.
So in my opinion, they need to be part of the core project team.
Definition: Enterprise Resource Planning
(ERP) is a platform that integrates and automates the management of core business processes, including basic finance functions. It also provides a lot of real-time data on performance.
Finance is essential to ERP
Large ERP implementations affect all aspects of an organisation, with the finance team near the centre. So it stands to reason that a finance manager would be involved, to ensure the project was successful.
After all, they’re the one with the technical knowledge of the general ledger and the accounts structure – a key component of any ERP system.
The finance element needs to be right if an ERP project is going to work.
What about the reporting, forecasting and budgeting aspects of the finance manager’s role? An ERP implementation will impact all of them, which in turn increases the importance of the finance team’s requirements within an ERP project’s scope.
Finance experts in the project team.
The finance manager needs to appreciate and understand the project implementation process in some detail while getting to grips with how the new system will change the current processes and reporting schedules.
An example: a client of mine changed its general ledger transactional system to a group-mandated software solution. Although many schedules were available within the new transactional system, they sacrificed granularity as a result. Now, the team can’t get hold of the detail without spending even more time on a task – it’s become a very convoluted process.
This was a large oversight at the requirements gathering stage. Had the finance manager been properly involved in the project, right down to its scope and requirements, it might have been spotted in time.
Case study: Jannine Edgar, AAT
Jannine Edgar, AAT’s director of finance and operations, is a prime example of how finance and project management can converge.
Edgar’s role brings together ICT, finance, procurement and customer services. She began her career in management accounting but found herself drawn into projects as the finance team representative.
“Over the years, I got involved in all kinds of projects. From financial analysis, I could see the opportunities to do things like consolidate distribution channels and optimise retail centres. The next logical step was to actually oversee implementation of projects.”
That led Edgar to study project management through Six Sigma, opening up a pathway to the current role, running some big IT projects.
“ICT is a big expenditure for AAT. Having the financial perspective and service delivery together can help create good value investment and ensure we are fit for the future.”
Here’s a more positive example: a telecoms company needed to change its revenue recognition reporting due to the IFRS 15 accounting rule. This had a very large impact on how its ERP recognised revenue.
Happily, there were a number of qualified accountants on the project management leadership team, who helped explain and implement the changes needed within the ERP to become IFRS 15 compliant, while maintaining the current systems and processes.
Finance managers understand statutory reporting requirements – it’s a key part of their role. As the number of these projects around organisations grows, the need for accountants and finance managers to understand and appreciate the project management life cycle will only grow. It’s becoming a necessity.
Finance professionals are becoming more technologically savvy, the workplace is becoming more digitised and skillsets are changing and developing – many transformation projects are still on the horizon.
For more on the future of accountancy:
- Accountants who build stadiums, hospitals and hotels – why they’re essential to the management of projects
- What are your goals for leadership and growth?
- Why cyber security skills are in demand within accountancy
- The future accountant – everyday personal skills
The content team are the owners of AAT Comment.