1 Page Strategic Plan for Finance Function

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Strategy defines what an enterprise will do to be successful — how it plans to compete and win in its chosen markets or deliver the expected services to the citizen and fulfill its public mission.

A strategy is specific for an enterprise, in a specific environment, aiming at a specific objective in a specific point in time. It is that strategy from which you generate strategic plans (and then operational plans) that answers how the enterprise will get there.

At a functional level, strategic planning defines the roadmap for executing the choices and actions required to meet strategic goals that reflect the function’s contribution to the enterprise business model and goals.?

Therefore, it's really important for Finance Function to prepare its one page strategic plan that drives the daily activities of the finance function in order to act as a value creator rather than just a cost center. Yes it's really one page, we are not talking about 100 pages strategic plan created at the start of the year and that just gather dust on its shelf and no body uses it.

Today’s disrupted conditions make it even more important for finance function strategic plans to be clear, measurable and easy to communicate. Key components include the following:?

1. A few metrics that define the function’s current and target end state

2. The most critical assumptions underpinning the plan

3. The key initiatives required to achieve the end state

4. A concise statement that distills and communicates the strategy

Key actions in strategic planning for Finance Function

A, Identify a shortlist of metrics to describe the function’s target state?

To brainstorm appropriate metrics to measure your finance function’s target state, first confer with business leaders and other stakeholders to make sure you’re clear on the overarching business strategy and goals. Then identify metrics that relate directly to your stated outcomes.

Limit the core plan to no more than seven metrics, initiatives or critical assumptions to keep the strategic plan easy to communicate.

B. Document and monitor key assumptions?

The assumptions that underpin your finance function strategy are essential tools for communication because they reflect why the target end state and required initiatives are better than alternatives and they form the cognitive foundation of the selected strategy.

In articulating the central value drivers for your finance function, include explicit cause and-effect relationships and interdependencies where they exist among, e.g., the business ecosystem (initial and target), key initiatives and external driving forces. Incorporate assumptions developed during scenario planning to better understand which of these relationships are highly reliable “truths” while others represent highly uncertain dynamics difficult to control or predict.?

C. Identify key initiatives and milestones required to move to the end state

To identify the select key initiatives that drive focused but validated planning, include initiatives that:

? Represent your finance function agenda to change or transform the business, not just run the business as a bean counting machine

? Seek to create value beyond the existing business trajectory

? Demonstrate real action by grouping smaller projects under the initiative as necessary

The plan doesn’t need to include initiatives intended to run the business, such as “keep serving our customers” or “maintain employee engagement.” These initiatives strive to perpetuate the current state or trajectory.

After specifying the initiatives, set criteria and dates for key milestones and completion.

D. Craft a concise statement that captures the essence of the strategy

In creating a statement to surmise the essence or core elements of a finance function strategy, strive for a single, aspirational sentence — but be willing to sacrifice conciseness for clarity. The focus should be more on getting the essential elements right than on finding the perfect turns of phrase. Teams caught in endless debate over wordsmithing have likely gone too far.

The components of the finance function strategic plan can be documented on a single page, making it easy to communicate, as mentioned below.

Credit: Gartner

If you are aspiring to build such strategic plan for your finance function or any other business function in order to bring some tangible results for your business or if you need to upskill your finance team with the modern capabilities required to transform your finance function from the back-end service provider to a strategic enabling enterprise, then reach out to Hub of Finance Transformation - HOFT team of experts and we shall be glad to work with you on on your transformation journey.