The CFO is commonly considered to be the sparring partner to the company CEO. Traditionally this implies a physical vicinity of the finance department to the CEO. Moreover, in local subsidiaries of large companies, the Finance Director sits close to the Managing Director, with his or her team on site. However, during my career, I have found more and more finance organisations where remote working is prevalent. I can identify three models.
1. Shared Service Centers (SSC)
SSC are probably the most recognised form of remote work, normally seen in large companies for accounting. An accounting SSC consists of a team that performs the accounting tasks on behalf of country subsidiaries. The scope of work can range from accounts departments to the full accounting process. In many cases, accounting SSC cover accounts payable because these tasks are repetitive and common across locations. I also know companies that have successfully delegated many more accounting activities to a shared service center.
The SSC is either internal, part of the company, or external, outsourced to a third-party provider and staff will either be located on a near-shore or off-shore location. In many cases, the main reason for setting up an accounting shared service center is the cost advantage of delocalisation. Additional benefits include no risk of absenteeism (vacation or illness) and consistency in accounting processes across the company.
2. Centers of Expertise (CoE)
During my career, I have encountered centers of expertise in the controlling function. They exist either to ensure a common controlling approach for the ongoing company business or to manage a strategic topic.
I have seen examples of CoE in sales and marketing subsidiaries and manufacturing plants. Physical CoE teams were put in place on a regional basis. They deployed common control processes across their area of responsibility. For example, key performance indicators and variance analyses were calculated and reviewed in the same way. As a result, top management received consistent data and recommendations.
CoE can also be assigned to cover specific finance topics. For example, a company can put in place a control CoE to cover all of the financial aspects for specific sales channels. The CoE first defines the approach for the finance control required, then evaluated the business alternatives and finally defines and implements the necessary tools and reports for its control.
Centers of expertise probably do not hold as strong a cost advantage as shared service centers. Rather they leverage the knowledge and competence of a dedicated central team.
3. Remote subject matter expert (SME) teams
In this model team members do not share a common workplace but are part of a virtual team, working across different sites. Today’s communication technologies make remote work possible. This model is most useful when knowledge is already available in the company but is spread across different locations, when strong potential candidates are not available in current company locations or when the cost of expatriating staff to a single location would be too high.
Remote SME teams are in my opinion adequate to cover common topics across the whole company. Enterprise resource planning (ERP) is a good example since the service must be available for all parts of the company at all times. This makes a so-called follow-the-sun service necessary. To achieve this, the company can leverage the fact that the experts are based in different locations and time zones across the globe.
Challenges in the implementation and management of remote teams
The most burning question with remote working is whether the new remote team will make current employees redundant. The answer is that it depends on whether the remote team will take over a new activity or an existing activity. In the case of the latter, the employment safety of the current employees would then depend on whether their time can be put towards other tasks or not.
For employees that are not remote, the job content and the way of working is very likely to change. This change can lead to a rejection of the new remote team. Strong organisational change management must accompany the structural change to ensure the new remote team is accepted and integrated into the company. Also, the hard and soft skills of the non-remote employees must be redefined. For remote employees, cultural fit and language capabilities are additional factors to consider for success, especially in Europe due to the high amount of languages spoken.
For all employees, mutual trust and loyalty to the company must be the goal. Team managers will need to grant greater autonomy and manage on a higher level, while still controlling the quality of the services. Team members will need to adapt to working in a more isolated environment, especially at home offices. Regular conference calls become necessary to align activities across teams. Also, face-to-face meetings should be budgeted to ensure teams still build personal relations. These will help enable connections between colleagues and therefore create efficient workflows when people are back in their remote locations.
The article was first published in Unit 4 Prevero Blog