In order for finance transformation to really take root, it needs processes to be adapted and refined to be more efficient and strategically effective. That’s a cultural change. Too many organizations find their change initiatives failing because they’ve failed to incorporate robust change management into the program.
People, process, data, and technology
Transformation needs to be properly planned and executed to be effective, and for that, there are four key players that can enable the change and that need to work together: People, process, data, and technology.
Each piece of the puzzle needs to be employed the right way at the right time to balance the initiative and ensure it meets the objectives set. Oftentimes a business will start down this road but miss the significance of one of those factors. As things begin to lose momentum, they’ll get caught up in trying to compensate, leading to cascading failures or at best, limited gains.
A great example would be a business that hasn’t properly integrated its billing and ERP systems. It’s left using manual processes to extract reports from the billing system, then send them on to accounting for manual approval before uploading them into the ERP.
While that achieves the objective, it’s inefficient, labor-intensive, and has significant potential for errors. As the operation grows, there will need to be more staff added, and the amount of manual handling means both security risks and data integrity become real concerns.
It’s usually only when the business tries to scale procedures like this that the problems become visible. As the overheads grow, cuts become necessary, but if staffing is reduced without addressing the underlying technological and process problems, it only exacerbates the issue.
Gaps appear and performance goes down, not up, resulting in stress and mistakes that could be easily avoided. Rather than just slash staff numbers, a well-thought-out technological solution can streamline the process and improve not just efficiency but also security and accuracy.
The outcome is space to rationalize staff numbers, but with confidence, not desperation. Using good data to identify where efficiencies can occur makes process improvement clear, and technology enables those potential savings to be realized.
It’s the collective effect of people, process, data, and technology that makes a difference. Technology on its own is relatively easy to deploy, but won’t always be effective when addressed in isolation.
In order to gain real ROI from new systems, businesses need to assess how they will transform processes, and who the key stakeholders will be. The right solution comes through careful analysis that factors in people, process, data, and technology, and the part they can play in finance transformation.
Start small and dream big
Finance transformation is a long-term goal, not an overnight event. It involves a change in the culture and the strategic evolution of the organization. It draws on continuous improvement and a passion for process excellence that leads the business step-by-step onto greater maturity. Oftentimes it can be helpful to have an outside perspective to start and maintain that journey, and to keep the goal clearly in sight.
Nintex partners MorganFranklin work with numerous businesses to assist with finance transformation. They begin by building a regular and accurate reporting cycle that gives the right information to the right people. With decision-makers properly informed, a culture of continuous improvement is fostered and processes streamlined.
This creates an environment where finance frees the business to pursue its future and enables the company to leverage finance to support and align with the strategic direction. One business working in the telecommunications field recognized this need in their organization and redesigned their end-to-end procure-to-pay process. By introducing automated invoice validation and an accrual process, they saved 20 percent of their unnecessary operating costs, which equated to $70 million per year.
Finance transformation is a vital tool for businesses that need more informed decisions and better resourcing for strategic goals. By building increased efficiencies and striving for process excellence, organizations can build better partnerships with finance and operations, and realize the potential they are aiming for.
Missed Part 1 of this blog? Read about the three key areas to focus on for finance transformation here.
To hear how other financial institutions have leveraged the easy, powerful capabilities of the Nintex Process platform, read the case studies here.