Baseline or Flatline - Your Call!
In honour of Man Utd winning the FA Cup I treat you to the image above, me in Paradise last year. To help you solve that intractable problem every Finance team has but never talks about I offer you a story about how a May Bank Holiday imparted a lesson in root cause analysis I have never forgotten.
I have been Transforming Finance functions since 1996 and in almost 30 years since I learned many ways to accomplish this. As I advanced through my career, I was fortunate enough to meet many great people who were Finance Leaders, Consultants and even Change Management gurus. I started my career at Whitbread Beer company, the 'Beerco,' where I managed the first of many Finance Transformations.
I was very lucky to start at the Beerco because it was the 'University of Transformation'. It had 2 distinct advantages as a proving ground for Project Managers, Finance, and IT alike. Firstly, it had a separate special projects unit called Business Process and IT (BPIT) headed by the vastly experienced Peter Golding and secondly it had more supply chain business systems than you could swing a stick at. To add real flavour to that, the biggest and most important were outsourced! Before outsourcing really was a 'thing'.
Anyone who has managed Finance within an FMCG environment with a systems landscape like that will know what I mean when I say just how challenging it is to produce the numbers. The Finance function headed by David Coldwell was a great environment in which to work but always faced the challenge of how to reconcile Stock with so many system inputs. It was a Drinks business, Stock was the be all and end all and you knew all about bulk beer, contract packaging, secondary packaging, duty rings, SKU's and my favourite RBUS. Fill in the letters you get a prize. Gary Dohoney you cannot enter.
It was in this environment that I got handed my most challenging ever Project and I was lucky enough to be handed it at the start of my career. It challenged me in so many ways that everything that came after was always achievable. It also taught me the most important lesson of any Finance Transformation program.
I was tasked to fully reconcile the Stock Account, a feat which had not been achieved since the multiple systems which supported the supply chain had been implemented and expanded year on year with the growing success of the business.
Multiple systems on disparate platforms, with varying levels of performance and reliability, spanning all major functions in the business all of whom believed they had no responsibility to ensure the Stock balanced…that's a Finance job!
In all it took me 12 months to accomplish the task. I was told they would put a bust of the Irishman in Porter Tun House if I ever managed it and after 12 months, I thought a statue was more appropriate.
In those 12 months I traversed the length and breath of the business, which meant the whole of the UK. I visited every depot and brewery, every IT provider, met with manufacturing and logistics teams, counted kegs, delivered beer, asked BPIT more questions then ever before and finally designed an entirely new suite of Stock Accounting reports and still I couldn't find the answer to that one intractable question.
After all that I found the cause of the problem one May Bank Holiday Monday working through these Reports. A discrepancy that had never been noticed before and would necessitate building more new Reports to prove my theory. The cause of the reconciliation problem all this time, since the Account was first created, was Unconfirmed Deliveries which broke the Duty ring on a Bank Holiday.
It took 12 months, countless investigative meetings, report development and building up more knowledge of a business than I ever thought possible. Then to finally find the answer working a Bank Holiday Monday because the Irish and UK June Bank Holidays do not fall on the same day...
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So, what is the most important lesson in how best to Transform Finance?
Know your Baseline!
All these years later I insist that Finance Transformation UK fully document the Finance Baseline of people, process and technology. I don't let Clients jump to the answer or their preferred Solution until we have documented all the facts.
Its interesting to look back and smile, that despite all the technological advancement since then, that the most important lesson came right at the start. If you are starting out on your Career in Project Management, Finance Transformation or Operational Finance your elders may think they have all the answers but maybe they learned them right at the start too, just like you will.
Cheers,
Solver of intractable problems and deliverer of One Version of the Truth