- Transforming Australia Post’s finance function required changing mindsets and behaviour.
- Confronting digital disruption by transforming resulted in a leaner operation with more value for customers and the business.
- Businesses that innovate are 40% more likely to increase profitability and nearly 30% more likely to increase income, a CA ANZ Innovation report shows.
By Tina Wild.
Australia Post has helped people connect for more than 200 years. It’s a large and complex organisation with assets totalling $5.5 billion, revenue of $6.8 billion and an extended workforce of more than 50,000 people.
In 2015, the McKell Institute identified that declining traditional mail volumes and the impact of disruptive technology had contributed to a major deterioration in Australia Post’s financial performance.
The consequence was a predicted total loss of $6.6 billion across the whole enterprise over the next 10 years, with cumulative losses in the mail business reaching $12.1 billion if the business continued with its same model.
Silvio Giorgio CA, General Manager, Data Science and Strategy, was mandated to work with finance leaders and employees to transform the finance function to add value to customers and the business.
Based on Australia Post’s burning need to change, Giorgio said the finance team also needed to adapt because in the next 10 years the function would look very different as a result of the use of technology. He questioned how any finance function could support an organisation embarking on change if the finance team didn’t change themselves.
“Our aim was to prepare our people for the changes ahead and empower them to be more relevant to our business and as individual finance professionals to the market,” he says.
The approach and challenges of transformation
The challenges he discovered in approaching the transformation were two-fold:
1. Convincing the leaders of Australia Post to transform to stay relevant.
2. Getting employees to engage in innovation and embrace disruption.
Convincing the leaders was critical to the success of Australia Post’s transformation. Finance professionals have learned that the world is changing fast, but Giorgio says: “They weren’t necessarily thinking about how technology was going to change how the function could work in the future.”
A MYOB report on the survey, The Age of Change found that 44% of business operators believe their industry will be significantly changed by technology in the next 10 years.
Giorgio encouraged the finance team to acquire a deeper knowledge and understanding of the business; keep abreast of technology that will impact them; and identify practical applications for new technologies. He believes these are the factors that will help the accountants achieve success.
Changing traditional mindsets
The first thing he did to engage his finance colleagues in the process of transformation was to get the team to understand and articulate their roles and purpose. And, he says, “There needed to be a balance between traditional reporting and creating new forms of value.”
Giorgio explored innovation with the team through the lens of the customer. With customers being quick to adapt to new technologies to improve their experience, they needed to be able to do the same.
He found that using positive psychology was imperative to helping shift his team’s mindset. They needed to communicate the opportunity to help drive the business. Over two years the finance team went from a culture of data-driven reporting, through having a knowledge-driven culture using analytics to where they are now – a value-driven culture of creating change.
The importance and advantages of innovation
Australian survey data indicates that a risk–averse culture is one of the top perceived barriers to innovation within businesses. Research also shows that innovative businesses have a number of advantages over businesses that don’t innovate:
1. Businesses that innovate are 40% more likely to increase profitability and nearly 30% more likely to increase income.
2. They are three times more likely to increase the number of export markets targeted.
3. They are two to three times more likely to report increased productivity, employment and training.
4. They are three times more likely to increase investment in IT.
5. They are almost five times more likely to increase the range of goods and services offered.
The impact of innovation often can be difficult to quantify and take significant time for the results to become clear.
Giorgio says the transformation led to a leaner and more engaged finance team at Australia Post. The cost savings were invested in other capabilities, in particular business partnering and data science.
The finance team became a digital and a value-based consultancy function. Even roles such as the tax function, he says, now operate in a consultancy or innovative advisory model. This is because “the attitude has changed and it’s about using data and insights to drive value for our customers and business, not just reporting”.
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Tina Wild is a content writer for CA ANZ.