Throughout my ten-part-blog series, I have been discussing how CFOs can use new technologies to help leverage the finance team in providing greater organizational value. In the capstone summary, I also wanted to note that underlying each of the changes discussed is a theme of greater collaboration.
In many ways, technology is enabling this collaboration. But your speed of adoption will increase if you start with a spirit of collaboration before any implementation begins.
- A strong CFO looks to collaborate with his or her key lieutenants. More effective plans are developed when everyone is looking to optimize the whole organization.
- A strong corporate finance team looks for ways to team with the business units they support. How can information be shared across units to make the whole stronger than the individual parts?
- Strong finance teams also look to gain advantage by teaming up and down the value stream. For instance, the concept of eliminating duplicate data entry extends up and down the value stream. Why re-key a key vendor’s data or ask your customer to re-key yours?
New technologies such as integrated planning modules are leveraging collaborative work flows which are often imbedded into the design of new modules. These systems provide real-time status of work flow which can be tracked automatically. Group messaging and polling functions facilitate online dialogues which can be happening with people around the globe. Joint work efforts can be tracked by automated audit trails maintaining change history. Teams can access the organization’s knowledge bases though on-line content management systems—anytime, anywhere. Even security concerns are better addressed as prepackaged solutions build in the security checks.
Old approaches that relied on linked spreadsheets had finance teams constantly trying to validate if they were working on the right numbers. Past surveys [1] have estimated that financial planning and analysis teams spend 47% of their time collecting and validating data. They spend another 30% of their time administering the planning process. As a result, they only have 23% of their time to do any real value-added planning work. The new technologies we are discussing (mobile, in-memory, predictive analytics, and cloud) can flip this equation leaving finance teams free to focus just on collaborating and doing real planning work.
In addition to collaboration, success with these new technologies requires three key elements. The first is leadership and whether they are willing to explore new ways that finance can improve organizational value. This is likely a CFO who is looking to have greater impact. The second is an organization with a willingness to change. There also needs to be an openness to what is possible. This leads to the third element, which is experimentation. As Peter Drucker advised, systemic innovation “consists in the purposeful and organized search for changes, and in the systemic analysis of the opportunities such changes might offer for economic or social innovation.” [2]
Whether you are a CFO or just someone looking to add greater value, ask yourself these questions:
- What changes should we be making to expand the value our finance team creates?
- How should our planning, budgeting and forecasting process change to take advantage of the next generation planning tools already here?
- How can in-memory computing help us harness Big Data for greater insights?
- What predictive analytics will provide us with greater lead time for improving?
- How can we better reach our strategies by aligning our execution efforts? What should be dropped to create capacity for what needs to be added?
- Which customers provide our current profitability? How will that change in the future?
- How can we improve the return on all expenditures?
- How can we eliminate wastes by moving to real-time consolidation?
- How can we increase our response times using real time close and disclose approaches?
- How can finance improve collaboration?
Finally, consider how finance can find the time to pursue these goals. That begins with your leadership and identifying dumb stuff you are currently doing that should stop.
I hope this series of blogs have helped get you started.
[1] See joint studies by APQC/ Beyond Budgeting Round Table (BBRT) and by Business Finance Magazine and BBRT. See “The Budget (1922 – 2009) Is Dead” by Jack Sweeney, Business Finance magazine, June 1, 2009.
[2] Drucker, Peter, Innovation and Entrepreneurship: Practices and Principles, (New York: Harper & Row) 1985, page 35.
This blog originally appeared on the CFO Knowledge blog and has been republished with permission.
The post How Do We Transform Finance to Cope with Constant Change? One Word—Collaboration! appeared first on The Decision Factor Blog.
