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Finance Target Operating Model - Evolution of the Finance Office
The role of the CFO and their organization has changed fundamentally in recent decades and will continue to evolve in the future. Accountants have become analysts and business partners. In many companies whose business models are undergoing a major transformation, the CFO's most important task is to finance this change and organize new accounting models in a feasible way. As the only role in the company that can reliably report information from a global structure, the CFO organization also finds itself increasingly responsible for non-financial data.
What is the Finance Target Operating Model (TOM)?
The Finance Target Operating Model (TOM) is a strategic framework aimed at transforming and redefining the financial functions of companies. This model addresses the evolving role of CFOs and their organization - transitioning from traditional accounting tasks to strategic, analytical, and data-driven roles. It emphasizes leveraging digital technologies and data analytics to enhance the performance of the finance department and support innovative business models.
Key Points for Transforming the Finance Sector
- Digital Transformation: The ongoing digitization fundamentally changes the financial landscape, offering new opportunities for data utilization and the development of new business models.
- Data at the Core: The importance of data for billing and forecasts is increasing; data-based compensation models are becoming more prevalent.
- Enhanced Skills: There's a growing need for CFO organizations and controlling departments to further educate themselves in statistics and econometrics.
- Demographic Shift: Aging workforces and the low attractiveness of traditional roles lead to skills shortages and efficiency losses.
- Artificial Intelligence (AI): AI is increasingly discussed as a tool for automation and efficiency improvement in finance organizations.
- Future of the Finance Target Operating Model: Companies need to realign their financial functions to meet the challenges of the digital age and remain competitive.
Success Factors of the Target Operating Model
- Clear Vision: Defining a clear target image for the future role of the finance department.
- Technology Integration: Employing modern technologies to support financial processes.
- Data Competency: Building skills in statistics and data analysis.
- Process Optimization: Standardization and automation of processes.
- Change Management: Effectively managing the transformation within the organization.
Without a clear vision of the future finance organization, the CFO area will become the dinosaur of the company!
Stephan Grunwald | CFO Advisory
Your Benefits
Advantages of an optimized Finance Target Operating Model
- Increased efficiency and cost savings: By automating and optimizing financial processes, resources can be used more effectively and costs can be reduced.
- Improved decision making:The integration of advanced data analytics provides deeper insights and promotes informed strategic decisions.
- Flexibility and scalability: An adaptive Fin-TOM enables the organization to respond quickly to market changes and take advantage of growth opportunities.
- Risk management: Improved data processing and analysis allows risks to be identified and managed more effectively.
- Strengthening the CFO's role as a strategic advisor: With a clearly defined Fin-TOM, the CFO organization can add value beyond the finance function and contribute to the overall business strategy.
Success Stories
Our Approach
Analysis & Vision
Identification of current challenges and definition of a clear vision for the finance organization.
Adaptation of processes and organizational structure
It is necessary to revise both the internal processes and the structure of the finance department in order to increase efficiency and effectiveness.
Redefinition of roles and services
The finance organization must rethink its functions and services in order to meet the new requirements.
Development of a business IT strategy
Given the central role of data in the digital economy, the finance organization must develop a clear strategy for the use of IT resources in order to make optimal use of data.
Implementation of measures and ongoing optimization
Implementation of the defined measures and continuous evaluation and adaptation of the model to keep pace with the constantly changing business environment.
4C Whitepaper: Target Operating Model
The whitepaper provides insights into the adaptation of finance in the context of CFO 4.0, including the integration of new data into reporting, the design of reporting and control in the era of Industry 4.0, as well as the impacts of moving CRM systems into the cloud on the CFO.
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