10. May 2026

Institutional Friction

Merixa Insights · Finance Transformation & Team Build

The unexpected drag of outdated operating models — and the two structural issues that most commonly prevent the finance function from delivering what the business commercially needs from it, at the pace the business requires.

When a growing business finds that its finance function is producing accurate information but not producing it quickly enough, completely enough, or in the form most useful for the decisions that leadership is trying to make, the natural response is to question the team's capability or the technology supporting them. In our advisory experience, neither is usually the root cause. What is almost always the root cause is an operating model — the architecture of how financial work is structured, sequenced, and owned — that was designed for a smaller, simpler version of the business and has never been formally redesigned to match what the business has become.

This is an architectural problem, not a control or process efficiency problem. It operates at the level of how the function is structured to deliver its outputs, not at the level of whether individual controls within it are proportionate or whether individual processes are appropriately automated. Two structural issues at this architectural level most consistently produce a finance function whose commercial contribution falls short of what the business's scale now demands.

The function's output architecture misaligned with commercial decision cycles

The finance function's operating model determines not just what it produces but when those outputs are available and in what form. In many organisations, the architecture of how financial outputs are sequenced — the record-to-report cycle, the management reporting production process, the cash flow visibility mechanism — was calibrated to the reporting requirements and decision cycle of a business operating at a lower revenue volume, with fewer entities, and with a less demanding external stakeholder environment than the current business faces.

The commercial consequence is specific and observable. Management information that takes fourteen elapsed days to produce in a business making active resource allocation decisions monthly is not meeting the decision cycle the business operates on. A cash flow position that is refreshed monthly from accounting data rather than weekly from commercial pipeline data is not providing the liquidity visibility a lender-monitored business requires. A reporting architecture built around entity-level statutory outputs rather than commercial-unit contribution analysis is not answering the questions the leadership team is asking when it meets to make capital decisions. These are not capability failures. They are architecture failures — and the distinction matters because the intervention they require is a redesign of how the function is structured to produce its outputs, not an improvement in how efficiently it executes the structure it already has.

" The finance function's operating model is the architecture between the financial data the business generates and the commercial intelligence its leadership requires. When that architecture was designed for a different business, no amount of team capability or process efficiency closes the gap it creates. "

Finance function scope expanding without a corresponding governance design

The second issue operates at the boundary of the finance function rather than at its internal architecture. As businesses scale, the scope of what the finance function is expected to contribute expands — from statutory compliance and management reporting to business partnering, investor relations support, treasury management, and strategic financial analysis. Each expansion is commercially rational. What seldomly accompanies it is a deliberate redesign of the operating model to accommodate the new scope — a structured decision about what the function's capacity will be redirected from, what new capability it needs to develop, and how the governance boundaries between its expanding responsibilities will be maintained.

The consequence, encountered with regularity in organisations that have grown their finance function's remit without redesigning its operating model, is a function simultaneously under-resourced for its expanded scope and over-committed to activities that could be automated, delegated, or removed. The professional bodies are explicit on this point: the highest-value contribution a finance professional makes to an organisation is at the intersection of financial expertise and commercial judgment — the business partnering role that translates financial intelligence into strategic insight. An operating model that consumes the finance function's capacity in activities below that contribution threshold is not merely inefficient. It is commercially costly, because the strategic financial intelligence the business needs from the function is the output of the capacity that operational overload is consuming.

Questions that surface both issues

• At the current scale of the business, is your finance function's output architecture — the sequencing and format of its financial outputs — producing the commercial intelligence leadership needs within the decision cycles those decisions actually operate on?
• When the finance function's scope last expanded — through a new entity, a new reporting requirement, or a new stakeholder relationship — was the operating model formally redesigned to accommodate that expansion, or was the additional scope absorbed into existing capacity?
• What proportion of your most senior finance professional's working week is spent on activities that require their financial expertise and commercial judgment — and what proportion is consumed by activities that the operating model's design places on their desk regardless of whether those activities require their seniority?
• If you were designing the finance function's operating model today — for the business as it currently exists, not for the business it was when the model was last formally reviewed — what would you build differently, and why has that difference not yet been made?

The gap between what the operating model currently is and what a deliberate redesign would produce is the measure of the commercial drag the existing architecture is creating. The diagnostic work begins with being honest about that gap — at the architectural level, not at the level of individual process efficiency or control calibration, which are distinct problems requiring distinct interventions.

Merixa redesigns finance operating models at the architectural level — restructuring how financial outputs are produced, sequenced, and governed to match the commercial demands of the business as it currently operates.  Explore our solutions →

The observations in this post reflect professional opinion informed by practitioner experience in finance operating model design engagements. They are not presented as statistically validated findings. The patterns described represent conditions encountered in our advisory work and their relevance will vary by organisation size, sector, and finance function maturity. Merixa Advisory provides Finance Operating Model services — this commercial context should be considered when evaluating the perspectives offered here.