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Redesigning operating models to unlock ERP benefits

What do international and non-profit organisations have to consider?

As more NGOs turn to enterprise resource planning (ERP) solutions, having the right strategies, capabilities and talent in place is crucial to support a successful transformation. Learn how the right operating model design and organisational structure can enable better ERP benefits during—and after—implementation.

A changing landscape for finance departments in NGOs

International and non-profit organisations are undergoing rapid change – technology and increasing digitalisation have triggered fundamental shifts in ways of working. At the same time, rising complexity and external uncertainties have prompted organisations to re-think their operating models and prioritise activities that achieve the highest impact.

Finance professionals in NGOs face rising expectations to address these challenges – both from an operational and strategic point of view. Cost efficiency and financial planning and analysis remain core activities, as does reporting transparently on where funding comes from and what it is used for. But, due to automation and digitalisation, finance is increasingly expected to look beyond ‘business as usual’ and provide relevant insights and capabilities for improved decision making.

ERP: Enabling a future-focused finance department

Imagine your current organisation in the future: It has undergone a massive digital transformation, following a new strategy to accommodate a new reality, whilst continuing to remain trustworthy, and attracting and retaining top talent. With a clear ERP strategy and operating model design in place, you’ve proactively aligned your organisation’s capabilities and roles to design the ‘organisation of the future.’ This process has shifted how you operate, where you operate and the skillsets of your employees.

Today, a combination of digital forces is requiring the finance department to evolve. Processes are operated by both humans and machines. Agility is integral. New skills for finance professionals are needed. Such forces radically transform how finance delivers value:

To ensure trust with donors, your organisation must be as efficient as possible in implementing a comprehensive, cloud-based ERP system. Successful and sustainable transformations are supported through organisational and operating model redesign, along with upgraded technology and a workforce equipped with the required skills and capabilities. These upgrades can enable an organisation’s overall operations more effectively.

Deloitte’s recent Global Shared Services Survey found most organisations achieve significant productivity savings from their shared services centres. These centres are often enabled by more standardised processes and a more streamlined organisational design. Additionally, most global shared services organisations are embracing digital transformation solutions such as ERP.

CFOs may need to reshape its operating model and organisation design to fully capitalise on ERP investments. Here are some ways to do so:

You’ve already done part of this. You’ve decided to implement an ERP solution that will radically change how your operations are conducted — standardising and simplifying processes that can maximise financial insights and efficiency. To fully align on the vision, understand key opportunity areas and establish guidelines for future models, you can start to with one of the following activities:

  • Survey key leaders and stakeholders
  • Perform high-level maturity benchmarking
  • Host vision labs or working sessions
  • Evaluate current state and desired future state

Consider how new and changing capabilities may alter how you serve your stakeholders and shift your approach. Status quo won’t be enough. Finance functions have a strategic choice to make about how to operate in the future. If you don’t align your operating model and workforce to your vision, you risk falling behind. We often see two paths to success:

  • Cost efficiency: On this path, CFOs use emerging technology and automation to operate more efficiently but cedes its seat at the table as the organisation becomes increasingly comfortable with self-service.
  • Value creation: This path transforms the finance department into one that has dynamic capabilities and enables new ways to partner with the broader organisation. With machines and scalable platforms automating much of the traditional finance work to create capacity, leaders can shift the function’s focus to delivering new work outcomes and providing opportunities for finance to strategically advise the organisation. New finance technologies may require many professionals to have a new mix of skills, like data analysis and storytelling, to partner within the organisation and drive value in new ways.

Due to the changing landscape, new service delivery models are emerging as robots and algorithms complement a diverse workforce with talent both at your headquarters and further afield. Many organisations are starting to define their workforce more as a wider ‘ecosystem’ than simply as full- and part-time employees. It now includes contractors and gig workers, along with service providers like consultants, process outsourcers, technology for workforce augmentation (e.g., artificial intelligence, robots), and developers or accessory providers (e.g., Offering apps through an app store). Implementing this kind of workforce ecosystem requires some changes to leadership practices, including:

  • Recognising all types of workers and the pros and cons of each
  • Rethinking diversity, equity and inclusion
  • Maintaining a workforce culture while keeping up with the fluidity of the labour market in terms of employee type and geographic location (e.g., local, remote, international)
  • Considering workforce needs in strategic planning

Finance functions have traditionally focused on efficiency. The future of finance means adopting a new structure – with the input and agreement of the wider organisation – that will enable CFOs to harness new technologies (e.g., artificial intelligence, machine learning), manage risk and create value in an ever-shifting landscape. You’ll first need to consider the nature of work and its value to the organisation and then align your structure appropriately— even if that structure and capabilities sit outside of the finance function. This means balancing efficiency and agility. Here are the differences:

Delivering efficiency means asking yourself: "Which areas need to remain in functional silos to scale the capability, create capacity and manage costs?” For example, reporting and cash management capabilities may be best suited to a traditional, hierarchical structure optimised for efficiency.

Delivering agility, on the other hand, means asking yourself: "Where is it essential to invest time, effort and energy to group critical issues that require rapid response?” In areas requiring close collaboration and support for strategic decision-making, a dynamic, mission-based team approach will allow you to decide and act more quickly. For example, as you implement a new ERP, you may find the need to redesign your organisation around value streams like procure-to-pay. A team with diverse functional backgrounds and skill sets—in this case, perhaps, a team of procurement, supply chain and finance experts working alongside technology experts—pushing toward a shared goal of generating value will bring together the right insights more quickly than siloed functional teams with limited interaction.

Balancing these dynamics (efficiency and agility) when designing operating models enables:

  • Risk management for unstable environments
  • Rapid response to dynamic stakeholder needs
  • Organisational resilience in times of crisis
  • Scalability up and down based on the organizational environment
  • Delivery of end-to-end services, like procure-to-pay

Your next move: Getting started

You’ve seen what the future could look like. You’re aware of how digital transformations, including ERP implementations, are disrupting finance and driving transformation of its workforce. You see how transformation provides an opportunity to maximise the benefits offered by ERP, lifting the efficiency and agility of your organisation (e.g., Through use of automation and scenario-based modelling). And you’re aware of what other organisations have done to capitalise on the changing environment.

Based on the above, it's time to fully realise the benefits of ERP-enabled finance transformation and capitalise on the investment you have made. Deloitte is here to help. We would be pleased to engage with you on how to transform your organisation and harness the change to ensure your finance organisation can fully deliver on its mandate .

1 Deloitte's 2023 Global Shared Services Survey Report

 

Thanks to Maxime Albano and Sebastian Peichl for their contribution to this article.

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