by Matt Benaron
The price of putting it off
Read about how delaying improvement is an all-too-common theme that Finance can be prone to, and what the price of putting it off may be.Read more
Delaying improvement is an all-too-common theme that Finance can be prone to; with regular peaks in reporting cycles, audits and everything else thrown Finance’s way, it’s difficult to find the time to change.
This exercise can feel burdensome and expensive, but it doesn’t need to be.
The current climate potentially offers a great opportunity to step back, assess, strategise and carefully consider the roadmap for the next few years.
What initiatives have you planned for 2020 to review and enhance the way you’re working in Finance?
"The Price of Putting it off"
Often, when it comes to doing things we consider as "a big move" we can tend to put it off.
Things like the fitness regime or diet you want to start or the spare room you have been "meaning to tidy" have a way of just not seeming so important.
Life tends to get in the way and it's easy to say we're too busy. Whether we like it or not, the same trends can often be said for making improvements in our businesses.
A trend all finance people have been hearing about is that of the finance transformation. It's a hyped-up phrase that simply means reflecting on how things are going within your finance function and taking the actions and making the changes to meet your goals.
Many finance people today know there are more efficient, enjoyable and easier ways to work, yet most will still put off making a considerable investment of either time or money.
There a multitude of reasons for this.
Five years vs five months - How our short-term thinking can lead to a long-term failure
We know that when we prioritise time to think in the longer term, it usually leads to better decisions. This is true in most aspects of our lives, but it is funny how often ignore it. When we think only of the immediate issues directly in front of us, we tend to miss systematic issues that can be the underlining cause in the first place.
In business, the same mindset leads to choosing the people, systems and processes that act as a band-aid over the immediate issue instead of the correct strategic solution.
To avoid this, we must reframe the way we look at projects and think about the value they provide to the business over a five-year period. Does the project add efficiencies and more importantly reduce levels of stress on everyone involved?
This approach opens your mind far beyond your next year's-end reporting and highlights opportunities you have not even previously considered.
If you are only looking to put out fires, the compounding technical and process debt will only expand, and your organisation could risk being left in the dark ages.
Step back to leap forward - Actionable advisory coupled with internal knowledge brings value.
Packed 12-hour days with caffeine-fuelled 6 am starts, can often mean that the finance function feels like one of the most overworked areas of the business.
It may seem counter-intuitive but "pumping the brakes" for an internal review is the best way to assess your current opportunities for improvement.
At VantagePoint, we start our engagements by evaluating every aspect of your Finance Function, from people, processes, and systems to value creation. Your year-end is important, and we completely understand that, but having this as your primary focus will leave you chasing your tail, and with a team that grows more and more frustrated. We need to take that step back and take stock of exactly where we are.
We all know the definition of insanity so let's “down tools” after our next year and see how we can improve. Taking some time out to assess these systems and explore future opportunities will empower you with relevant data, should you decide to involve an external party at any point.
Our most successful clients always start by using our expertise to do a very simple but honest evaluation of the current state. The VantagePoint methodology utilises a four-pillar focus to see where your people, systems, processes, and culture have opportunities for lasting growth.
Even when budgets are tight and team bandwidth stretched, we can make massive improvements by focusing on the right opportunities.
Death by buzzword - Jargon doesn't wash with finance
From our experience, finance teams people like to stick to the data and facts. They are straight-talking and honest because the last thing you need is a CFO that is ambiguous! Clients often tell us they are turned off by the sheer number of buzzwords and marketing hype that surrounds the idea of a finance transformation.
Words like "transformation" and "digitalisation" are used in abundance but are very rarely explained or broken down into actionable steps that can streamline your year-end process, for example.
This marketing jargon leads to a feeling that all of this might be too expensive and makes it feel like a huge undertaking not suitable for the SME or mid-market business. When this feeling takes hold projects to improve get put on the long finger and make thinking about change and improvement all a bit scary!
Sounds pricey! - It's scary, we know.
As numbers people, we strive to always have an eye on the cost to value ratio. In everything we do, we evaluate to see if we are gaining enough value in relation to whatever input. When it comes to large finance projects, large consultancies and software vendors can wade in and a large bill will usually follow.
Taking the first step does not have to be a costly one, however. Use your own experience and the resources that you already possess and run a simple and honest evaluation of the current state of your team, your systems and the processes you execute regularly.
Think about the challenges you can address immediately and act. From our experience, when evaluating a client's current state, we usually find that they already know where they want their finance function to go, we just need to help them understand the things that are getting in their way. Once we discover the specific challenges that each partner is facing, together we can design an action plan to meet their goals.
Jumping in with both feet to a large systems integration is not always the answer either. Technology will not solve all of our problems. Take the time to figure out exactly what challenges you currently face so you can make an informed decision and not waste time sitting through random software demos that will not address your specific needs. Your time is valuable, do not let anyone waste it.
Flying blind - The real price of putting it off goes unseen
So, what happens if you put off the changes to meet your finance team's goals?
The finance function can become a revolving door, countless talented team members will leave due to frustration. Those that do stay may not have the motivation for change.
The insights that you provide to key stakeholders will not be able to keep pace with changing environments, and therefore will seem incomplete and be under-utilised within the wider business.
Your team will be too inundated with menial tasks to see the wider picture. They will focus on putting out the fire in front of them and never get the opportunity to explore the ways they can have a serious and lasting impact on the wider organisation.
Take the time to reflect upon the broken processes and systems that impact your team; putting off your next investment may not seem like such a good idea!
Thank you for taking the time to read this post. Do you think there is a price of putting off improvement projects?
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