The interim manager was commissioned by the German subsidiary (turnover: approx. €200 million) of a large American group in the aviation industry to fill the vacant position of Head of Finance (CFO). It turned out that the commercial processes and the role of the employees in the finance department were not optimally aligned.
Numerous deficiencies identified in the organization of the finance department
The interim manager's analysis revealed numerous deficiencies in the organization of the finance department. For example, there was no proactive, effective controlling that was interlinked with the specialist departments. Around 80 percent of working time was spent on reporting and compliance. Only a small proportion remained for the optimization of processes and the necessary role as a business partner. There was also no clear focus on tasks between accounting and controlling: everyone was doing something everywhere. Corporate management was neither "driver-focused" nor clearly geared towards the early identification of opportunities and risks and the attainability of corporate goals. Employees suffered from constant deadline and reporting pressure. This was exacerbated by deficiencies in IT support, insufficient staffing and high friction losses in the collaboration with the English shared service center.
Comprehensive concept for reorganization derived from SWOT analysis
As a basis for the reorganization of the finance department, the interim manager worked with the management and the specialist departments to develop a strengths/weaknesses profile (SWOT analysis). He also organized various change management workshops with the finance team to develop a clear mission for the finance department and to determine the necessary goals and steps. This mainly concerned:
- Monthly and annual financial statements (with the involvement of the Shared Service Center)
- Treasury, taxes, compliance issues
- Planning and forecasting process, opportunity/risk assessment
- KPI usage and IT support (including SAP usage)
- .including SAP usage)
Once the core processes and tasks had been clearly restructured, the interim manager formed 2 new teams, each with a team leader.
- Team 1: Accounting, taxes, treasury, accounts receivable and payable management, compliance (4 employees plus shared service center)
- Team 2: Business controlling with sales controlling, R&D controlling, operations controlling (with purchasing, production, QM and logistics), project and investment controlling (4 employees)
Proactive business partner concept developed for the new finance teams
The interim manager then developed a proactive business partner concept for the two teams with the involvement of internal customers. The core components were the development and implementation of a new management approach using relevant strategic and operational business drivers as well as driver-based KPIs for the divisional controllers and specialist departments.
The interim manager placed particular emphasis on optimizing controlling processes such as planning and forecasting or actual-value reconciliation and aligning them with the holistic management model of free cash flow (in terms of optimizing enterprise value). At the same time, the interim manager drew up the rough concept for the implementation of an MIS (management information system) and BI (business intelligence) solution based on SAP R/3.
Roles and core tasks defined for the new partner concept
In addition, the business partner concept included permanent (monthly, weekly) opportunity/risk assessments with coordinated action plans as well as regular business partner/controlling meetings with specialist departments, local management and representatives of the headquarters in the USA.
The interim manager also defined the roles and core tasks for the new partner concept. He revised the personnel requirements planning and the job descriptions for the two finance teams. He also organized the transfer of employee tasks to the new responsible team. This was flanked by the creation of a personnel development plan (in terms of job enrichment/enlargement) with training and seminars.
Return on sales climbs by 20 percent within 10 months
The focus on the "driver-based" free cash flow concept in conjunction with the "proactive business partner approach" significantly optimized reporting and forecasting processes, the early identification of opportunities and risks and therefore business management. The implementation of a "win-win" approach promoted acceptance among the specialist departments (particularly through improved communication and support).
The new organization also improved the effectiveness of accounts payable and accounts receivable management in conjunction with the Shared Service Center. This reduced outstanding receivables and improved cash flow. The return on sales climbed by around 20% compared to the previous year thanks to consistent project, revenue and cost management.
After 10 months, the interim CFO handed over the reorganized finance department to his permanent successor. Further challenges remain the optimization of IT support through the Group-wide Shared Service Center as well as the implementation of an MIS as part of the digitalization efforts and the reduction of reporting expenses.
