Finance Wants to Be Agile: Better Knowledge Management Can Help
We all read about – and feel – the rapid pace of business change. Disruptive technologies like robotics and machine learning are forcing entire industries to change their business models. To keep up, finance must become super agile. We all read about—and feel—the rapid pace of business change. Disruptive technologies like robotics and machine learning are forcing entire industries to change their business models. To keep up, finance must become super agile.
For finance organizations, agility translates into the capability to quickly adapt and support the changing needs of its internal customers; even better, it’s about anticipating those needs to accelerate improvement. Doing things the way we’ve always done them is not realistic. Not surprisingly, agility ranked number three on the top five finance improvement to-do list in The Hackett Group’s 2018 Key Issues study (see below).
Agility also means having the right insights — at the right time, delivered in the right way to the right people – so they can make smart decisions. It also means accelerated development of capabilities such as advanced analytics and robotic process automation (RPA) to support stakeholders’ business requirements.
The top two items on the list in the graph above are closely related to agility. By augmenting their analytical, modeling and reporting capabilities, finance organizations can more quickly provide answers to business leaders’ questions; they can also anticipate what’s ahead using predictive analytics modeling techniques.
And by working more closely with business units and other functions, finance learns about the business’ evolution, and can foresee adjustments to service delivery and quality rather than try to catch up as new initiatives like e-commerce and mobile computing are launched.
An Era of Continuous Learning
To be agile means to continuously learn – from others inside the organization and outside it. That’s where effective knowledge management comes in. Knowledge management as always been important to delivering better business performance. But it’s critical now. You can’t be agile if you don’t know what others are doing within and outside the global finance organization. And you can’t be agile if you don’t have access to fresh and accurate information about financial and business performance. Technology is enabling both.
Cloud platforms were the original knowledge-sharing “enablers.” They connected disparate systems and provided access across the globe to processes and information. Companies frequently cite increased collaboration as one of the key benefits of moving to the cloud.
Since then, other technologies have been gaining momentum (see graph below).
>Master data management is the foundation for any integrated data platform. According to our Key Issues Study, adoption is currently at 40% (see chart below). But the forecast is for full and partial adoption to top 80% in two to three years. Master data management s about speaking the same language across the enterprise.
>Data visualization adoption rate are on the rise. Sharing pictures is one of the best way to share knowledge. The images can be insightful charts that others can learn from or replicate, process-flow diagrams or infographics.
>Finally, we see a growth in the adoption rate of social media among finance organizations. We have clients who use social networking apps to ensure a free flow of information among its worldwide finance staff. Through social media sites, users can post and share case studies and best practices, and crowdsource new ideas.
There’s No Time to Reinvent the Wheel
Companies are betting on new technologies to alter their customer experiences and help them thrive in the current business environment. Finance’s primary mandate is to help the business achieve its strategic objectives. That’s why finance itself must transform into an agile organization. A learning organization.
Finance hubs in the Americas need to find out what their colleagues in India have already discovered. Not only do they need the technological infrastructure to share data, they need an institutionalized way of sharing ideas and innovation. Today’s technologies make that easier. Case studies can be easily communicated and centrally stored and categorized so they are searchable. AI tools can help find related information quickly. Finance analysts can instantly access thousands of peers worldwide through social media tools. There’s no other way to keep up.
I’ll end with a famous quote from management and knowledge management guru Thomas Davenport: “Knowledge management is expensive – but so is stupidity!”