Encore Elevate was held across 4 cities this year: Regina, Winnipeg, Vancouver and Seattle. Along with valuable networking, training, and hands-on learning, we were happy to partner with third party solution providers like Prophix to help your system run even better. Watch this webinar recording with Prophix and Encore about Moving Beyond Spreadsheets – Supercharge your ERP.
Prophix began as a software distributor. After years of implementing financial applications, the company’s founders, recognized the need for an innovative planning and reporting system; Prophix’s Corporate Performance Management platform was born.
Our world gets more complex every day. In this rapidly changing environment, what’s worked before simply doesn’t cut it anymore. What if you could focus on the big picture? Keep your attention on the things that really matter? Your business is evolving. Your systems should evolve too.
Move beyond your day-to-day and create bold, strategic contributions. Our software helps financial professionals reframe their everyday challenges into genuine opportunities. Improve profitability and minimize risk when you automate repetitive tasks and focus on what matters.
Whether in the cloud or on-premise, Prophix supports you with a platform that flexes to suit your realities, today and tomorrow.
People, Process and Technology: All Must Evolve to Crush the Future of Finance
The below post originally appeared here on Prophix.com
Learn how to transform your finance department’s people, processes & technology in this Q&A with Kenneth Fick, Senior Manager at MorganFranklin Consulting.
If your finance department isn’t as efficient, quick, or flexible as you want it to be, which element is to blame: people, processes, or technology?
It’s a trick question, or course. In any business — and especially in finance — these three elements are inextricably linked to each other. In order to transform your finance department, you have to take a holistic view. It’s important to understand how each element interacts with the others to make changes that improve all three.
Finance consultant Kenneth Fick has spent years studying how all the moving pieces fit together in the finance department. As the Senior Manager of MorganFranklin Consulting and President/CEO of Pierce the Fog Consulting, he has a wealth of practical experience in helping finance departments increase efficiency and expand their role in their organizations.
In this interview, Fick shares what finance leaders need to know to take their department to the next level.
Process and Technology
Prophix: How can finance leaders leverage people, process and technology to work more efficiently?
Well, people, process and technology is the Golden Triangle of virtually every business initiative on the planet. But far too often leaders focus most of their attention on only one leg of that three-legged stool.
For example when, any process in finance, accounting or beyond is perceived to be underperforming, the natural reaction is to blame one of the three, as opposed to seeing the breakdown of all three within the chain. What I’ve seen, personally, is that it’s never just one thing. For example, people love to blame technology, but really it’s a combination of all three at different points.
Not all of the elements need to be replaced at the same time, but you have to take a look at everything in an overarching sense. Perhaps the issue is poorly designed user interface. I’ve seen that before with good technology. Or the process was designed for an old business model and is no longer applicable.
Personally, I prefer the development of a process analysis first that identifies issues and can correct or mitigate them. Then see what can be done about the people and the technology from there.
Prophix: How do you get people to work more efficiently with the technology you have invested in?
You have to understand behavioral economics. There are these very powerful finance software solutions, and people leverage less than 50 percent of what they can do. They’re infinitely customizable, but it’s like working with a blank piece of paper. It’s like writing a novel: it’s so difficult because you start with nothing, and you have to develop it from there. Giving users guidance into what needs to be done next and how to do it is a great way for the Office of Finance to add greater value.
Prophix: Do you believe there is a single source of data truth? If not, how can we get closer to that ideal?
I don’t think there is a single source of truth. The answer is simple, but it’s hard to do: we need to get comfortable with ambiguity. We’re trained not to be comfortable with ambiguity. We get very excited when journal entries tie together, when you can have everything locked down. But to unlock the next level of data, you have to understand that imperfection is part of the game.
Right now, we’re collecting a whole bunch of data, but we don’t know how to use it. All we know is we need to collect it. So, everyone says, “Big data, big data. OK I got all this information; well how do I use it?”
First, understand the data is not perfect. But in actuality, imperfect data is gold. It’s all in how you can cleanse that data, while understanding that the future is fuzzy. You know, it’s the “fog of war.” You have to try to pierce that fog by taking data points externally and internally in order to derive the quality and insight that you need to plan the business, plan profitability, and plan operations to support the supply chain.
Prophix: What does the ‘people’ part of the equation look like to you? What kind of talent should finance leaders be looking to hire?
It goes back to my previous answer, you know, being comfortable with ambiguity. Look for people who are comfortable with things that aren’t perfect. Beyond that, natural curiosity is a skill I look for in hiring for high-performing organizations. Why? Why are we doing things this particular way? Why don’t our numbers look that particular way?
With the right people you can look at processes. You can get past that, “this is how it always has been done, because there was a customer that required it years ago, and we just never stopped.” There are so many people on archaic systems, and I think that natural curiosity, that asking and wondering why, trying to understand the story and the background, that investigation is really going to add value to their organization.
Prophix: What should organizations do to reach the next level with data?
That’s the easiest solution: Integrate a corporate performance management system or software. Excel is great for low ad hoc analysis. But if you’re looking for rapid scenario analysis, “what if” analysis, deeper dives, you really need a platform to control the data flow, both bottom up and top down.
It’s really the same information theory you can do on spreadsheets, but just like any other model you build, there’s assumptions, there’s equations, there’s algorithms that you build. And within any type of manually-altered spreadsheet you have a higher propensity of error as it continues to evolve.
If you’re currently working on Excel, that’s great. You understand the process. Now let’s take it to the next level and understand how we can get the software to work the way you want to work, as opposed to you going to where the software works.
Technology is just one of those three legs of the stool. So, the technology could be a problem, but if the underlying process is broken, then the people and technology are set up for failure. So I think the core of that is the process itself. Look at how things are done and modify that to match the way you want the business to operate. It’s hard, because business are continuously changing, and the speed of businesses continue to increase. So, what you develop today may be needing to be continuously tweaked.
We need to move away from pure accounting to FP&A and the continuous movement and evolution of these processes. As opposed to a static environment where, say, I have 10 people doing accounts payable, 20 people doing accounts foreseeable, and they’re in separate buildings. Why? I mean that was probably great a while ago, but why we do it now? And I think FP&A is in a position to really add value there.
Prophix: Our survey found that FP&A professionals only spend 21% of their time on high-value activities. How can the finance department improve that statistic? What activities do you define as high-value?
I think the biggest one is decision support. By that, I mean supporting any type of management, providing structured analysis to support each type of decision.
I’m working with a large company right now, and one of their biggest problems is cultural. They sit on these calls for long periods of time, hours, their day is taken up with four to six hours of calls where nothing gets accomplished. And the problem is, they’re all scared to make decisions. That’s why decision support comes to the forefront. A manager’s job is to make decisions with imperfect, incomplete information. You will never have an environment in which you have perfect knowledge.
If you want to wait a year after the books are closed, the economy has already continued, and your competitors have crushed you, you will have perfect information. And at that point, it will be absolutely useless.
For the finance department, then, high-value projects are in the decision support realm. It’s in answering those questions about competitors, or internally about systems. or H.R., or tax matters. That, to me, is where you’re going to see the highest value. Take time away from the automatic and routine and tedious types of things and focus on getting decisions made.
Other high-value activities are those tied to a defined ROI. So a lot of times that leans toward marketing. You can define what the return of investment is on a marketing campaign, was it or was it not successful. But there are a multitude of other ROI-related activities: Product line and product profitability is a huge thing, including pricing.
Pricing is a huge value-add activity. The analysis of pricing, and customer segmentation due to pricing, are areas that are very high value. They’re top line numbers.
Prophix: How do you feel that the finance department’s role in the organization is changing?
When people think of accounting and financial outcomes, they’re usually thinking of the back office. But that’s really not the case anymore. To add value, it’s really more in the front office. It’s working with the marketing teams, working with the pricing teams, sales people, and middle office support people. That’s where you can really either gain efficiency and do more with less, or do more with the same, or increase the top line revenue through the targeting of different areas and different opportunities or projects.
If you have any questions about using Prophix with your solution, please connect with us.
Subscribe to receive our monthly newsletters with the latest updates all in one place! Get important product information, event recaps, blog articles, and more.