While it seems every corner of the org chart has experienced some sort of tech renaissance to drive greater agility, efficiency, and performance, one area has fallen behind—the finance function.
New SaaS tools have transformed marketing, sales, product, and even finance’s adjacent G&A functions. And yet, a tool from 1987 remains the workhorse for finance teams.
Spreadsheets aren’t going anywhere. But as demands for faster, deeper insight into the numbers increases, upgrading legacy systems and workflows through finance function transformation has to become a priority.
Former Dropbox CFO Ajay Vashee realized this early on in his tenure. Vashee’s approach to finance transformation while overseeing Dropbox’s progression from IPO readiness to officially going public helped the company grow from $45 million to $2 billion in ARR and collecting $500 million of free cash flow a year. (Check out our podcast episode with Ajay to hear the full story.)
Finance transformation isn’t just a buzzword—it’s a way to elevate the finance function to a true strategic partner that can drive tremendous growth. Here’s why you need to implement it across your company.
Table of Contents
What Is Finance Transformation?
Finance transformation is the evaluation of how the function’s teams, tools, and processes align with a company’s strategic goals—and the ongoing effort to optimize each pillar to support those goals more effectively.
All functions are reviewed with measurable results, such as reduced costs and faster reporting cycle times, to “transform” the role of finance into a strategic partner to brainstorm and implement company growth goals.
Finance function transformation begins with aligning the mission and vision of finance with the overarching company culture and goals. Vashee sees finance transformation built around two concepts: continuous improvement and strategic disruption.
“Disruption” and “continuous” seem at odds with each other. But for Vashee, finance transformation boils down to a philosophy driven by two questions: “Everything that you’re doing on a daily basis, how can you get better and better at doing that? But, then, how can you also always be on the lookout for ways to transform how we operate as an organization and transform how we operate as a company as well?”
Continuous improvement focuses on improving systems, from software to products to processes. Strategic disruption means staying on the “bleeding edge” of what’s new in the industry and always considering how emerging systems and tools could positively impact the company.
The payoff for Dropbox went beyond saving time and money. It led to them setting audacious, bold goals that led to intentionality across the company: Vashee noticed team members approaching annual reviews prepared to discuss how they contributed to organizational goals and how they pitched into transformation efforts.
Examples of Finance Transformation
Finance function transformation paves the way for more effective decision-making in everything from hiring decisions to SaaS pricing strategy, go-to-market strategy, product roadmap planning, and beyond.
Here are just a few of the many ways finance transformation has impacted real-world businesses.
New Software Automation for Data Analytics
Finance teams have the enormous task of analyzing revenue, bookings, and billings, which has historically been a manual process gathered into Excel workbooks. This is why software automation has been such a critical trend in finance: it frees up time for your staff to focus on more strategic, disruptive tasks that can drive business growth.
With a lofty goal of saving 5,000 working hours in the first year of Dropbox’s finance transformation, Vashee and his team had to evaluate where to invest in new tools. “As you implement a new piece of software that can automate a lot of what we do, there’s an opportunity to be more disruptive and to save tens or hundreds or thousands of hours on the close and outlook process,” said Vashee.
“Historically, there hasn’t been a whole lot of innovation and disruption in finance, and we spent a lot of time scouring the landscape, and we found a few tools that worked really well for us, but we also saw a lot of opportunity for innovation going forward.”
The best test for Dropbox’s goal was an implementation of Alteryx for analytics automation. The platform helped Vashee and his team replace its massive Excel workbooks and automate some of its highest-volume tasks. Alteryx also auto-generated email reminders for client invoices and expenses, which freed up time for accounting to focus on more strategic work.
Implementing new software like Alteryx helped Dropbox beat its goal by saving 6,000 hours, which pushed them to set the following year’s goal to 10,000 hours—which they hit again.
Automation Accelerates the Month-End Close
The month-end close process is one of the most repetitive tasks finance and accounting teams have. And that makes it ripe for automation.
Financial decisions depend on knowing the current financial state of your business. You can forecast, but if your month-end close data is already three weeks behind, you’re late to making decisions that will have any strategic impact. Even worse, if your month-end close data is off, your decisions are already set to be off course. And once your catch an error, you have to course-correct to make up for the last month and the three weeks of the current month you’re in.
Financial automation allows for repetitive tasks, such as emailing vendors about invoices and tax-clearing account transferences, to be completed without human input. Automating reports saves your team the manual labor required to generate the report, giving them more time to review the data and make more accurate forecasts and recommendations for your business.
Collaboration Builds Cross-Functional Awareness
We’ve established that your teams impact how finance transformation can be carried out. “Collaboration” is part of strategic disruption, as you get teams who normally don’t work together to anticipate potential issues and work through solutions together.
Vashee noted that it was especially important for finance teams to lean into collaboration: If someone was managing accruals on the accounting team, and someone else was working through monthly close with the infrastructure organization, both people should be on the lookout for potential crossovers.
He thought, “Why don’t I make the connection between our infrastructure leader who’s managing our server footprint and our procurement team and see if there’s an opportunity for us to renegotiate some of those contracts?”
This type of questioning is crucial to finance function transformation. Vashee spotted a way to save the company money, acting as the bridge between business partners and departments to help Dropbox capitalize on the opportunity.
The Benefits of Finance Transformation
You want your team to have time to seize opportunities as strategic partners within the organization. They won’t be able to do that if they spend their time chasing data and figures past the point of making an impact.
Continuously measuring the quantitative and qualitative ROI of your finance function transformation initiatives ensures you can communicate the benefits of implementing new or re-envisioned processes.
Giving the Finance Team More Time to Focus on Strategic Initiatives
Closing the books can take weeks at a time. Finance function transformation, such as Dropbox’s automation efforts, allowed their finance teams to close their books on a faster timeline. “We could get to outlook generation on a more accelerated timeline. That gave us more time, leading into our earnings calls, to really work through scenario analysis on the outlook to understand what was and wasn’t working,” Vashee noted.
The acceleration allowed Dropbox to access their revenue numbers and work through their accruals faster. With the time they saved, Dropbox’s finance leaders had more availability to work with their audit partners on their strategic positioning when the company went public.
Making Process Improvements More Iterative
Transformation takes many iterations: What may work for one department may not be optimal for another. You need to experiment with processes to discover what is successful.
When you’ve automated repetitive processes and freed up time for your team to focus on strategic work, you can dig into why certain processes across the organization aren’t working as expected. That’s what Vashee did when the self-serve side of Dropbox’s sales funnel wasn’t performing as expected.
Vashee recalled the scenario analysis conversations he had at Dropbox, where people were transparent about what was working, what wasn’t working, and how they could partner across the organization. These conversations enabled finance to collaborate across the business and help Dropbox identify ways to improve and measure success more effectively—which is time well spent toward setting up potential growth.
Strengthening Business Partnerships for Greater Company Impact
While evaluating systems is important, finance function transformation has larger returns. One of them is creating opportunities for better business partnerships, which sets your company up to have stronger forecasts and growth.
Vashee said that finance transformation opened up more opportunities for his team to form partnerships with key stakeholders across the business. Finance transformation initiatives made them spend “less time trying to be backwards-looking [to] understand what happened” and more time focusing on the most impact they could have, which was through establishing the “right level of business partnership.” They needed a quantitative way to measure the quality of their partnerships, which landed on working hours saved.
With finance having more time available to collaborate with business partners, they gathered insights that led toward faster system transformation and implementation—not just in the finance tech stack, but across the company as a whole.
Bake Strategic Finance into Your Company’s DNA
Finance transformation isn’t a one-and-done project. It’s a philosophy for running and evaluating finance functions that never ends.
While the “how” of finance function transformation varies, its point remains the same—to drive optimal, substantial growth again and again. But implementing new software and processes that don’t scale alongside your business can lead to costly migrations and retaining.
That’s why it’s so important for the people on your team to be engaged in the transformation, bringing new ideas to the table even as you grow. You can bake this strategic approach to finance into the DNA of your entire company by helping your team establish a shared language within your business.
Your finance team needs to understand how the company’s marketing team discusses their goals in order to translate it back into structured data (like marketing’s “growth” translating to team headcount, product development/launch, etc.). When each department understands each others’ goals, transformation is not only possible, but better predicted and executed.
Mosaic unlocks finance transformation by centralizing data, creating the foundation for that shared language with each department, and providing the ability to accurately forecast how new plans will affect your business in real time as it scales.
Request a demo and discover how Mosaic can transform your finance systems from simply functioning to strategic decision-making.
Own the of your business.
