According to recent research in the US, which was published in cfo.com in December 2015 and March 2016, companies spent 13% to 16% of their available finance function time on Management Activities. About half of that total time was spent on Transaction Processing, with the balance after deduction of management activities, being on Control and Decision Support. Additionally, if you expressed as a percentage the total cost of the finance function over revenue, then the total cost of finance ranged, in aggregate, from 0.57% to 2.13% with wide variations discovered within an industry sector, all pointing towards process inefficiencies.
Fighting for every basis point of profit in business can be a monumental task and if the research above, from a large number of companies, is indicative of potential savings, then for sure anything that gives traction in gaining efficiencies will have an impact on the bottom line. Arguably, however, there is a lot more potential value locked into the main daily operational processes that can be unleashed with better resource allocations.
Why Has Software Design Been Able to Change
A combination of factors have come together that allows end-users to leverage their domain expertise and to define partially or fully automated processes. These start from data collection, through all process flows to reporting including the ability to undertake complex Business Simulations and to generate Contextual Actionable Alerts or Workflows. This is made possible by the software being written for 64 Bit and being also optimised to leverage the parallel computing capability of the multiple cores and threads of today’s mobile and desktop processors. This coupled with latest compression technologies, and the optimisation of software for management accounting, means that even the most complex processes or tasks can be achieved in a single step, meaning rapid execution and greater efficiency including those that include data transformation from sub systems.
Complex Processes and Complex Tasks
Complex processes like Budgets & Forecasts are always a challenge taking months to conclude with multiple iterations across all business units. Normally completed sometime in Q4 they are often rarely finalised until Q1 and are referred to, in original or modified form, throughout the year. Processes are repeated, are never detailed enough meaning that time is spent trying to figure out how a particular number was calculated in the first place. Complex tasks normally are specific, complex, repetitive and time consuming to execute, requiring multi step processes that often include extensive and specific spreadsheet designs where knowledge can be lost on a staff member leaving.
Do You Need Real Time Systems
Whilst we all understand, at a holistic level, that real time systems are desirable they are currently viewed as unrealistic. Most companies are actually tackling a very narrow prioritised list of processes to add value to their business. They will eventually get towards real time and this activity will accelerate as additional incremental time is released through the removing of frictional processes. Bottlenecks are in fact an inherited legacy with the required data for a specific task being somewhere in the various sub systems. Simply put, technology has only just reached a point in the last 12 months to effectively and practically reduce friction at a reasonable cost.
What Can be Achieved Now
With latest technologies end users can now define processes from data collection, thru all required business flows to reporting with any required user interaction or segregation of duty. Selected highlights:-
● Some processes or tasks require data to be collected from operations. These can now take the shape of a smart form that renders, with a zero footprint based on a user’s function. This means that forms only contain required fields. Less errors and a better UX.
● Processes that require data submissions from multiple subsidiaries are labour intensive. Now software robots can detect for non-submission, and auto chase by starting a relevant workflow. They can also undertake simple or complex checks ie is b/f = c/f from last month or is profit in the required range for a budget submission and accept or reject based on the situation.
● During any process flows, ranked results can be shown at regular intervals to show the top XX or bottom XX products and/or contextual alerts started depending on the result of what is being tested.ie potential stock outs, slow moving stocks etc.
● Progress bars for longer processes (financial close ) can show you what the system is doing at any time, regardless of device, so that you can always see progress rather than an apparent inactive screen.
● Latest technologies drive results through high performance. Results can be seen close to real time meaning more time can be spent on management in assessing specific situations.
● Business Simulations allow you to quickly test and rank millions and millions of combinations of potential resource allocations to drive cost efficiencies by assessing multiple factors simultaneously.
● Processes can be collaboratively reviewed, step by step, for continual improvement. New staff can quickly be productive and when staff leave process knowledge is retained and not lost.
On-Line, Off-Line, Centralised , De-Centralised
The UX capability means that systems are smart, scalable and can be deployed to any device as required for the process in hand. Processes can be totally or partially automated and are granular, allowing the user to define the process that works for them, even if it goes across multiple sub-systems and personnel. A useful feature for internal audit is the ability, with granular security control, to file copy, so fast, relevant data from a subsidiary to give oversight or to leverage robots for contextual results.
Leverage Existing Systems
When we look back over time we can see that business systems have improved incrementally and whist friction has been reduced it is still a major issue, as required data is often a subset of recorded data and exists in multiple locations. Bringing data together and transforming it as required for ad hoc or planned reporting is troublesome due to massive volumes, data formats and computational requirements. This new generation of solution leverages your existing systems to enhance planned, ad hoc, or event driven reporting for decision support, resource optimisation and segmental reporting.
Will You See the Difference
Absolutely as you will:-
● Save time through automation so that processes are more accurate with less errors (smart forms) are repeatable, auditable and fast.
● Be able to annotate generated entries with meaningful descriptions which are useful for subsequent reviews.
● Be able to leverage software robots to work at any stage of the process to drive contextual reports or workflows.
● Deliver month end reports pre- analysed with contextual information with ranked variances, noting that contextual attachments and/or workflows can be generated as required depending on results. Possible errors can be highlighted on the screen for required users but will not be shown on reports,
● Define processes that can be totally automatic, require one button or be partially automated. Brings relevant data from sub-systems to one page for decision support, resource optimisation and reporting.
● Drive proactive not reactive management.
● Perform Business Simulations allowing you to test processes quickly or gain insights for resource optimisation.
So when asked again at the end of 2016 “Do you work for your system or does your system work for you” your reply could be very different.