Analytics in Action: Why Finance Centers of Excellence Make a Difference

Source: Oracle

While data analytics play an increasing role in finance, many teams still find that critical finance information and specific processes remain spread across staff and lines of business. These unintentional disconnects can cause real problems, including offering varied views of business performance and forecasts.

But finance-specific Centers of Excellence (CoEs) can be a game changer, helping to consolidate data and reporting around specific areas and improving the efficiency and agility of your finance team.

"Centers of Excellence can offer tremendous benefit. They provide more consistent reporting and save people from doing the same things in different ways, which ends up costing the organization time and money," says Donald Anderson, Oracle's director of Organization and Talent Development.

How CoEs Change the Finance Game

In a study conducted by the American Institute of CPAs and sponsored by Oracle, researchers identified the key traits of "agile finance leaders"—executives who were driving finance transformation at their organization. The research revealed that 81% of these leaders had created centers of excellence around key modern finance initiatives, such as financial planning and analysis, compared to just 56% of the other finance leaders.

At Oracle, for example, the shift toward a subscription-based cloud services business model meant big changes for the company's finance team. During that transition, Ivgen Guner, Oracle's senior vice president of finance, reviewed existing processes and extended her team's responsibilities into new areas, such as monitoring metadata used for reporting and creating universal dashboards.

This evolution lead to one of the organization's key initiatives: Creating a CoE focused on critical finance systems. "It's critical that our metadata matches territories to our management hierarchy," Guner says. "That's complicated because our sales pipeline is based on sales territories but our forecasts are based on cost centers."

Finance-related CoEs make it possible to headquarter your company's subject matter expertise in one place. It's not only convenient, it also ensures that everyone is on the same page about core objectives, such as finance skills development or project accounting. More importantly, CoEs drive the development of best practices, which can help your organization standardize finance-related processes and data analysis. The result: Key decision makers gain a reliable, one-stop shop for their most important finance information.

Creating Finance-Specific CoEs

CoEs have myriad benefits. But how can you set them up effectively in order to reap those rewards? Here are three tips for establishing finance-specific CoEs:

1. Determine which finance functions warrant a CoE. Many organizations begin by centralizing the expertise of the most common finance functions. You could have a Tax CoE or one focused on Financial Planning & Analysis. You can also consider functions that are unique to your business or wrapped around core technology. For instance, you could create an ERP CoE to ensure that finance and the broader organization make the most of your technology investment.
2. Establish a scope—and funding. Once you determine where a CoE can best serve finance and the business, then you'll want to outline how you'll staff and fund the initiative. For example, you'll need to consider whether you need new hires or if you can redirect a portion of your current employees' time. In addition, you'll want to establish a scope for the center, as well as clear objectives so the staff understands the expectations, goals, and activities critical to the CoE's success.
3. Get broad buy-in early. Anderson recommends getting other lines of business on board as soon as possible. Everyone needs to agree on which processes the CoE will own—to avoid repeating tasks or creating another information silo, which runs counter to the purpose of a CoE. With Oracle's financial reporting CoE, Anderson says, it was critical to garner consensus about what reports the center would generate. "Negotiation is really important," he says. "Everyone has to agree."
   
   These days organizations are more interconnected than ever. Centers of Excellence ensure that everyone is operating off the same information, meeting the same high standards and ultimately putting your company's data to its highest and best use.