Since SOX was introduced in 2002, it has
been increasingly important to establish good cross-functional coordination
between the Finance function and the Information Systems ( IS ) function.
However, if you want to take it up a step, merge the two into one function,
and create what I call the Finance Systems Group.
What is a Finance Systems Group?
A Finance Systems Group is a group that synergizes the Finance function
and the Information Systems / Information Technology ( IS / IT ) group
into one team. This group takes over the responsibility from other
functions, for developing, improving, and maintaining processes and
data systems that support financial concerns, including SOX and internal
audit. Each person in the group has a combination of finance and technology
skills.
How will this help me with SOX?
A functional Finance Systems Group will be able to respond very quickly
to any concerns around SOX compliance, as their sole charter is to
organize processes, and build systems to support finance initiatives,
including SOX compliance.
Driving from requirements collected from external audits and internal
auditors, they fortify the processes and build data systems that support
auditability.
What is the basic composition of the group?
Initially, the group should contain either 5, 7, or 9 people. All
except one person will be very high level non-management people. These
are called team members internally, but may have a formal title of
Finance Systems Engineer. One person will be the functional leader.
This can be a Vice President or Sr. Director. An appropriate title
would be Vice President of Finance Systems.
Where does this group fit in the company's organizational
structure?
The Vice President of Finance Systems should report to the Chief
Audit Officer, Chief Compliance Officer, or whoever reports to the
Audit Committee.
For the people in this group, what qualifications am I looking
for?
You are looking for 4, 6, or 8 very high level non-technical people
and 1 high-level manager. All the team members should be of equal
skill level and status. They should be people that know finance very
well, and know information technology very well. These are people
that can both crunch numbers, and develop systems. This team performs
a very high-priority function in the company, and they should be treated
as such.
It's not as hard as you might think to find people like this, as
long as they are rewarded properly. In my experience, I've seen a
number of people transition from Finance roles to Information Systems,
and the other way around. They are different skill sets, but they
have a lot of common denominators, and with the right motivation,
developing the synergistic skill is not that complicated.
The leader of the group needs to have all the qualifications required
for a team member, plus have leadership and functional management
and project management ( preferably agile ) experience.
What does the team leader do?
The majority of the time, the team leader will be in a coaching role,
leading by example by doing hands-on work with the rest of the team
members. Aside from core team work, the leader will need to coordinate
with the CAO and other key stakeholders, manage the workflow, and
shield the core team from the politics of the organization.
Why is the group so small?
You need to maintain a small team to maintain its high performance.
As teams grow, it becomes more difficult to communicate, and politics
start to interfere with levels of management.
Once a base group is established, what are some variations
or extensions that can be explored?
Once the team is fully functional in its core state, you may want
to expand due to increasing demand and throughput. If you need to
expand, create more teams. Do not make larger teams. Each team should
have it's own core team members of 4 - 8 people, and a team leader.
There should not be any overlap in the functional requirements between
teams -- keep the teams separate. You do not want to start entertaining
consolidation and elimination of redundancy.
Another variation or extension of the group, is to have a set of
people that assist the team leader with political insulation. This
will be required if your company is has a lot of politics or restrictions
that make it difficult for the team to stay flexible and agile ( such
as an over-zealous release process that protects the release management
team more than it enables rapid system deployment ).
A Finance Systems Group can be your best organizational defense against
SOX and other internal audit concerns within the company. The team should
be small, flexible, empowered, self-contained, staffed with the best
people possible, and lead by an experienced and competent leader. Now
that you know the basics, organize a small effort on the feasibility
of making it happen.
