Finance Processes: To Standardize or Not to Standardize?
Even a couple of years ago, this would be a no-brainer. The accepted wisdom was that finance should become more efficient by harmonizing different processes, taking out as many handoffs as possible and automating the whole thing. And of course, then migrate unified processes into a global business-services (GBS) organization.
Done? Not exactly.
What Do GBS Executives Say?
The Hackett Group Research does indicate that by consolidating finance activities does make finance more efficient. But is shaving cost still the number-one or primary finance priority?
Cost optimization was companies’ second-most-important objective this year, according to The Hackett Group’s 2019 Key Issues Study. Number one was enhanced customer centricity.
Finance has traditionally focused on cost, and it remains a huge issue, particularly as CFOs foresee darker economic clouds sparked in part by the prospects of a full-out trade war.
But to thrive in the digital era, being super efficient is not enough. Finance must aim higher, as disruptive technologies launch new business models and shuffle the competitive landscape. Companies must keep-up with, or even exceed, the rate of external change. And the onus is on finance to enhance its functional agility so it can provide stakeholders with the insight they need, when they need it, and in the manner they want to consume it.
At a workshop on May 13 at The Hackett Group’s Best Practices Conference, nearly 100 GBS executives discussed the growing tension between doing everything the same way and personalizing services to stakeholder speed, content, and delivery-mode demands.
Is This an Existential Threat for GBS Organizations?
Not if they adapt and become more agile by revamping their service delivery model to embrace a customer-centric mindset and upskill their staff.
For example, GBS can take simplified finance processes (note that simplified does not necessarily mean standardized) and layer on smart automation solutions like RPA and machine learning to automate what they can and inject new levels of intelligence into the way they do work.
Our research and conversations with clients show that more mature GBS organizations are doing just that. They are building on a strong core of best practices and applying design thinking methodologies to wrap their processes in ways that are in tune with their evolving stakeholders’ demands. Intelligent process automation permits them to up the level of insight they deliver and adjust the cadence of reporting. They can also create personalized front-end interfaces, for example using data visualization solutions and mobility.
It’s About the People
It all sounds very techy. But when asked how they would alter the various elements of their delivery model to enhance agility, executives’ starting point was not implementing more bots or embracing cognitive technologies. It was improving talent through internal development or external acquisition, with an emphasis on hiring from the outside to quickly bring in critical expertise.
It all comes down to having the right people and the right culture.”We need staff with more critical thinking skills,” one GBS executive said. “And we need talent with better business skills.”
So far, the news about GBS agility are grim. In Hackett’s 2019 Agility Study, most GBS executives gave themselves low marks. It is therefore imperative that they reconsider their mission and assess their role within the broader finance organization. One thing everyone agreed on is that a culture of agility must start at the top. Participants identified role-modelling by senior leaders as one of the most effective enablers of success.