So, you’re a CFO wanting to effect large-scale change? You might not want to hear this, but the odds are stacked against you…
Separate McKinsey, Bain, Gartner and Harvard Business Journal studies each concluded that 60-70%
of all large-scale business transformations fail.
As new external challenges or opportunities arise, regular strategic change is essential for your business to reach its full potential. However, these wide-reaching strategic initiatives can cost you time, money, market share, customer base, and even skilled employees if implemented poorly.
Outlined below are some common reasons why transformation initiatives fail, and how you can beat the odds by leveraging a corporate performance management (CPM) solution. As a Finance leader, it is so important that you address these during the different stages of your transformation journey.
Poor understanding of the long-term challenges a company is facing and a focus on the wrong business objectives can result in short-sighted goals which don’t improve performance or growth.
By allowing you to delve into historic data, a CPM solution gives you context to the scope and scale of the organisational change you hope to achieve. In depth analysis of your data helps identify problems and determines the root causes of performance issues to ensure that you set appropriate, measurable goals. The right CPM tools also help to measure the success of your transformation initiatives against key KPIs including revenue, operational costs, and overheads.
Transformation initiatives affect many dimensions of an organisation. Poor change planning that does not explicitly address the interplay between different areas of the organisation can result in delays, incorrect allocation of resources, and ‘transformation fatigue’.
A clear roadmap with a precise approach which details specific pain points and how to manage these is needed to ensure implementation initiatives remain on course.
CPM solutions driven by robust, driver-based, financial models grant you incredible visibility of the P&L and balance sheet impact of changes you might consider. Having this ability to forecast allows for establishing a deliberate direction, and clear prioritisation of work and resources across various business units. It also allows you to assess proposed initiatives using cross-functional perspectives.
Change is never easy, especially change that takes months to implement. To this end, quick wins that show tangible results help to maintain a positive transformation culture and keep employees motivated.
A CPM solution with near real-time reporting allows you to monitor initiatives as they progress, so that you can see tangible results faster and filter these results down to employees. Employees can easily tap into a system that connects strategy and delivery performance via reports, dashboards, scorecards, and interactive visualisations.
A failure to align initiatives to outcomes can not only result in ‘leakages’ but may mean that you end up focusing on the wrong strategies.
CPM solutions clearly track the relationship between financial and operational activities and outcomes. This clear visibility of the impact on your bottom line allows you to more easily identify which initiatives are effective.
According to studies completed by the Project Management Institute, organisations that are highly agile, nimble and able to respond quickly to changing market dynamics complete more of their strategic initiatives successfully than slower, less agile organisations (69% versus 45%). This illustrates the need for real-time reporting that enables you to easily adapt your plans in rapidly changing circumstances.
A CPM solution that allows continuous forecasting and ‘what-if’ scenario analysis enables you to regularly check assumptions and verify whether strategies need to be amended or even abandoned.
The right CPM solution provides capabilities to plan with confidence, constantly measure and report progress, as well as maximise the return on investment from strategic initiatives.
An integrated business forecasting, reporting, and budgeting solution like CALUMO provides oversight and dissemination of high-level strategic data alongside everyday business figures to give you the insights you need to successfully deliver your strategic initiatives.