Optimising financial processes

Posted on:

Six Levers for Digital World-Class Performance

Business leaders have been counting on technology and digital transformation to accelerate performance improvement. But what is actually being achieved?

The Hackett Group have shared the results of some interesting research into this very topic and have identified 6 areas that define “digital world class”.

I asked our resident Digital Process Excellence leader, World Class Finance expert, and former VP GBS himself, Steve Fox, for his take on this.

He added 4 additional strategies to the list, which I will summarize below.

There is a natural focus on cost efficiency and, in 2021, digital world-class finance organizations are operating at 43% lower cost than peers, but this may be a lagging indicator of more fundamental “world class” drivers.

I have have selected my top 5 from the Hackett analysis below;

  1. Talent – we need the very best operational experience, emotional intelligence, business partnering and analytical skills together with an execution mindset. This is probably the biggest developmental challenge for the organization. 
  2. Operating Model Evolution – there is an increasing shift to agile, “enterprise aligned” resourcing, rather than functional and geographic focus. This is the essence of a Global Business Services strategy, combining elements of finance, accounting, technology, digital operations, external service providers, HR, procurement and more.
  3. End-to-End Process Design and Ownership – the success of business transformation is more about cross functional communication, alignment of desired outcomes, collaboration, development of a shared vision and focused execution than it is about the digital element. This is a critical capability but I am becoming  more convinced that the “ownership” term is not very helpful. But that’s a longer discussion!
  4. Data and Analytics – Timely, accurate, data insight to action. Not just reporting, but information to drive daily operational improvement. But its is harder to achieve than we are led to believe. Embedding process knowledge in analytics is the key.
  5. Technology Enablement – Digitization is a key strategy for operating efficiency, control and the elimination of manual intervention and error. But we also know from painful experience that without sufficient end-to-end process understanding,  digitization can end up magnifying and accelerating process defects. Technology is a key strategy, but only in the context of the four above!

Steve added some interesting depth to these strategies with these thoughts;

“Defectivity”, the most successful organizations have transitioned from a “lagging indicator” approach to performance management to a focus on identifying process defects and driving root cause analysis in a systemic approach to continuous improvement that drives enhanced end-to-end process collaboration.

Pareto Principle.  The “big bang” initiatives with long lead times that suck resources seldom deliver on their promises (time, value, and impact). Instead, concentrate, using the 80/20 rule, on more “point of pain” process improvements with short cycle times. This will not only drive productivity but also flex your organization’s “getting it done” muscle. It builds confidence within your team to make impactful change happen quickly.  

Voice of the Customer (VoC). We can hit all our KPI targets and benchmark well but if our stakeholders do not recognize the value of what we deliver, we are missing the point. This is a key element of the Business Partnering capability we all need.

What does good look like? Not as easy as it sounds! Invest time in defining this and getting stakeholder alignment around it. So many times we get transfixed on the targets and measurements and forget to evaluate what good is and communicate those expectations. This is critical to driving a culture of accomplishment, recognition and celebration.  

The Hackett Group analysis can be found here . . 

It is a 10 minute read, but worth the time!