Over the past 12-18 months we have seen a shift in spending in many organizations. Where many organizations previously focused spending primarily on customer-facing areas and activities, they have recently shifted that focus to their accounting and finance departments. At conferences, I have heard that big data, real-time data, and three-day closings would be very beneficial but many of these organizations’ systems and processes haven’t yet caught up with the press.
As you look toward optimizing your finance areas, you should begin by looking at your people, process and technology. If these three components aren’t in balance, your organization will not be as effective or as profitable as it could be.
People: As technology advances, it increases our ability to turn data into information and information into knowledge, and then people need to evolve into these roles. Aligning people with a designated line of business, for example, allows for better communication and the ability to provide impactful information. It also elevates accounting to a strategic partner and finance isn’t just overhead anymore.
Process: Accuracy is king. That will never change, but the ways in which you accumulate data, analyze and report has dramatically changed in the past ten years. Whether you have invested in a new system or not, think about the ancillary applications you use. How many Excel spreadsheets do you have? Are you stuck in the “we’ve always done it that way,” world? Take a step back and see if there is a better way to do what you are doing, with what you have today. Sometimes just asking someone else to take a look at your process will bring things to light that you didn’t see before.
Technology: Most companies tend to fall into one of these areas:
- We have strong systems in place but aren’t utilizing all of their capabilities. This is the best place to be because it is the easiest to optimize. You never want to be at 100% utilization, but you do want to maximize your investment. Do your people know how to use the system? Are they manually manipulating data, or do they have a lot of workarounds? The system is great, but did we neglect to evolve our processes?
- We’ve outgrown our system. It’s hard to make the decision to go to a new system due to the impact on the organization and the cost. Eventually you will have to upgrade. The good news is that, typically, newer applications run faster, and provide more data and functionality. They can do all those things the conference speakers say we should be able to do, once we implement and teach people to use them.
- Our system is outdated. The vendor has sunset the application, there are no updates, upgrades or customizations available. You’re out of options and in this environment it’s too risky to not have security updates. It’s time to select a new system.
To find out more about optimizing your finance function or other ways that McGladrey can assist you with your business needs, contact McGladrey’s management consulting professionals at 800.274.3978 or email us.