How the FTOM Model is Changing Financial Departments and Accelerating Transformation

Written by: Viktor Mendel, Director and Founder of Strategic Management Consulting (Germany)

Financial departments across all industries are facing significant challenges today. Sudden changes due to digital transformation, unstable market conditions, regulatory complexity, and changing stakeholder expectations require more than incremental improvements – they require fundamental transformation.

The model known as the Finance Target Operating Model (FTOM) provides a structured framework for this journey, but success lies not in the framework itself, but in how organizations navigate the cultural and operational changes it demands.

In this article, I will describe an example of transformation in a sustainable energy services company and demonstrate how the FTOM framework can be practically applied to evolve finance from a service function to a strategic business partner.

More than Transformation

The energy company in question operates in the German-Swiss border region, serving as a regional partner for sustainable energy production and supply. With annual revenues of €1.5 billion and over a thousand employees, the organization faced increasing pressures from climate change initiatives, volatile energy prices, regulatory interventions, and a comprehensive energy transition that reshaped its industry.

Traditional approaches to optimizing the financial function – streamlining processes, implementing new IT systems, reducing costs – were no longer sufficient. The company recognized that it needed a fundamental transformation to ensure that finance, and consequently controlling, could effectively support the strategic evolution of the organization. The company’s approach is an example of how organizations can successfully apply technical upgrades while simultaneously achieving a true cultural and operational transformation of the financial function.

Applying the Golden Circle

The transformation team applied the approach known as the Golden Circle by Simon Sinek, which explains why some organizations are more successful than others. The model consists of three concentric circles: from the ‘why’ circle to ‘how’ to ‘what’. The key idea of this approach is that most organizations communicate from the outer circle inward (what → how → why). Successful organizations do the opposite: from ‘why’ outward (why → how → what). This methodology has proven crucial for creating organizational alignment.

Why, How, and What to Transform

The primary driver was a fundamental shift towards a focus on internal users, primarily management. Finance needed to evolve from a primary focus on mere calculations and compliance to becoming a management partner for effective and transparent management of business units. A focused orientation on the needs of internal users proved to be a key driver of the transformation towards a managerial function.

The introduction was more than just another new concept. ‘How’ encompassed new collaboration models and systems of mutual support, providing a holistic view essential for sustainable change. The focus was on digitization and enhancing finance towards management, positioning them as an integral component of core business, rather than merely as a supportive, service, or administrative function.

Through Thematic Areas

The company organized transformation measures through thematic areas based on process activities, e.g., from procurement to payment or from recording to reporting. This structure enabled a comprehensive understanding of processes while ensuring that measures from one area impacted others. To make the thematic areas as tangible as possible, the company organized concrete steps to help internal users better understand and identify with them.

For example, a concept of open doors was developed for complete interaction with internal users where they could experience the entire process, ask questions, and collaboratively develop solutions, as well as workshops related to specific insights into how data is analyzed in controlling and how data is transformed into information. Such solutions succeeded in making abstract concepts of transformation concrete and accessible, helping a broader range of internal users, especially managers, to understand their roles in the broader change initiative.

From General Practice to Specialists

A key element of FTOM involved introducing a new organization based on roles within the controlling department. Previously, controllers functioned as general practice experts without deep specialization. The transformation introduced specialized roles with defined task profiles and competencies to better meet the demands of internal users.

Instead of imposing roles from above, the finance department worked with controllers to collaboratively design new positions. All other relevant stakeholders were involved in role design through workshops where the requirements of internal users were identified, grouped by task focus, and included in role descriptions. The transformation thus resulted in three different roles in controlling:

1. Business Analyst: focused on digital competencies and expertise, with a strong orientation towards detail and technical precision.

2. Business Partner: combines digital competencies with a high level of focus on internal users, business acumen, communication, empathy, and strategic thinking. This strategically key role is far more than traditional support in terms of significantly better, active collaboration with all business units.

3. Reporting Specialist: focused on excellence in the technical segment and visualization of business reports, i.e., tools and data integrity, ensuring accurate and timely flow of financial information.

Competency Profiles and Development

For each role, a specific profile was defined containing 15 – 20 competencies, enabling each controller to develop tailored improvement and advancement plans based on the requirements of their role. This approach allowed for flexible role assignment based on individual abilities and strengths, fostering efficiency, competency development, and employee satisfaction.

After role assignments, comprehensive competency alignment processes involved various assessment tools that highlighted clear developmental gaps and opportunities, making abstract concepts of competencies tangible and applicable.

People at the Center

A central element of this project was presenting a clear vision of transformation through the created and subsequently written ‘Change Story’, which served both as a guideline and as motivation. It was presented through various channels, initially through management circles integrating them into the vision of change, and then communication spread to other employees through targeted workshops, meetings, and other communication formats.

Mandatory were the ‘Change Jour Fixe’ – regular meetings for change management that provided clear insights into progress. Every three months, a special event was organized aimed at empowering the change process through education, exercises, and case studies. Participants received collaboration tools that enabled improved team dynamics and alignment with the company’s goals.

A new, specialized position focused on change management was opened to systematically support the change process, particularly in the domain of the financial function. Various formats, including joint training and learning groups, supported individual and organizational development. These initiatives promoted knowledge exchange among departments and integration of continuous learning into daily work routines, with employees contributing topics they found personally interesting or organizationally relevant.

Sustainable Transformation

At the end of the introduction, the company’s CFO commented: – The start of the transformation has gone well. Now it is important to make the initial changes visible and achieve a lasting impact. The true success of this transformation will be the continuous and dedicated monitoring of the established direction, which evolves into sustainable and lasting change.

This perspective encompasses the essence of successful FTOM implementation: initial technical and structural changes are just the beginning. Long-term success depends on the introduction of new behaviors, maintaining a wave of enthusiasm, and the continuous development of the financial function and controlling.

The transformation established frameworks for continuous adaptation, rather than fixed end states. Regular competency assessments, further role refinement, and stakeholder feedback ensure that the financial function and controlling continuously evolve with business needs.

New collaboration models, communication patterns, and expectations have become embedded in daily operations, rather than remaining isolated initiatives. Embedding such a corporate culture model has proven key to sustainable changes. Success in controlling has created opportunities to extend such a role-based approach to other financial functions – treasury, financial planning, taxes, and other specialized areas.

When Change is Successful

This real-life case demonstrates that the implementation of FTOM succeeds when the organization pays deep attention to the transformation of corporate culture. Technical excellence in integrating information systems, process optimization, and organizational design must be accompanied by equal excellence in change management, communication, and people development.

The approach of this energy company offers a model that can be applied to the financial function of any organization seeking transformation. Starting from a clear vision and mission, engaging employees as indispensable partners in transformation (rather than just recipients of change), and maintaining a consistent focus on cultural evolution alongside technical advancement, finance and controlling can successfully transform from a compliance-oriented administrative function into strategic business partners.

Success requires patience, persistence, and a willingness to experiment with new approaches while maintaining focus on the core goals of transformation. The FTOM framework provides structure, but human creativity, engagement, and commitment drive sustainable change.

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