John Weathington, President & CEO of Excellent Management Systems, Inc.
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Introducing the Finance Systems Group

Combatting Sarbanes-Oxley Compliance with Organizational Development

Since Sarbanes-Oxley (SOX) was introduced in 2002, it has been increasingly important to establish good cross-functional coordination between the Finance function and the Information Systems 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.

The Finance Systems Group is not a mix of Finance people and IS people. Instead, it is a high performance team of individuals, each of which has both finance and technology skills. Here are the answers to some key questions that will help you setup this new group.

What is a Finance Systems Group?

A Finance Systems Group is a group that synergizes the Finance group and the Information Systems / Information Technology 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 Sarbanes-Oxley (SOX) compliance?

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 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.

In Summary

A Finance Systems Group can be your best organizational defense against Sarbanes-Oxley 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.