Reengineering Finance & Accounting . A step at a Time...
Introduction:
Reengineering Finance & Accounting is a constant challenge, given the business needs and changing external environment from Regulatory, Shareholders and Competition.
A dynamic organization understands the ever changing needs of the business and invest in appropriate tools and techniques to reach this business goal.
The following layer of hierarchy can help organizations, Finance and Process Excellence Professionals to reach their desired goals. Related topics for further reading;
Transactional:
An ideal way is to look at the nature of the transactions and by evaluating the value addition/s or otherwise. These includes, typical Finance & Accounting transactions, Accounting entries, Manual journals and System entries.
Consolidation: Look at opportunities for consolidation of accounting transactions so that, efforts can be minimized (Example - Consolidate month end journals)
Contraction: Wherever, opportunities for reduction of entries or reduction of processing time exists, look and explore further (Example - Auto feed of entries into sub ledgers)
Elimination: Look at the process value and if the transactions are not delivering value, or circumventing a process route, eliminate such entries. (Example - Rework reduction)
Operational:
Challenge the current status: Right and appropriate questioning of the current process will bring the desired change
Workplace effectiveness: Right capacity modeling and productivity improvements are desirable here - House of Lean
End user computing: Mini technological changes and effective use of end user computing techniques, macros will eventually change the shape of the processes
Operational measures are very effective because, it enables us to reevaluate the current paradigm and look at the change alternatives available. This approach can be executed thru BPR - Business Process Reengineering. Also read the following relevant articles on Projects;
Strategic:
A focused re-engineering initiative will look at an ideal process for the next 2 decades and bring the necessary directional measures to the table. The approach is not on the current processes, but with necessary business foresight.
For example, if the business is expected to grow at CAGR - 15% every year for the next 10 years, and any technology or strategic change will not be rightfully placed, if it is not expected to address the changing business needs.
Big ticket technology changes: These are meant for transformation of the processes with a huge $ budget. With almost 60% of the projects are failing attributable to various reasons, a right step at the right time will deliver success
Value added Services/Reporting: Improved reporting, Accuracy improvements, Reducing the turnaround of financial statements and Better process insights are some of the measures
Improving business outcomes: Delivering value to end customers, business and shareholders and improving the process metrics are some of the measures. Examples - Significant changes in the re-engineering journey results in - Better Cash deployment or Improved operational income or Better business synergy. Enablers in this area are, Finance Transformation, Business Strategy.
Conclusion:
The cited points are some of the thoughts and not all exhaustive. Equally there are means and methods to reach the pinnacle of glory. After all, re-engineering is not a one time effort but a continuous journey!!