As the saying goes, ‘Sometimes you need to take a step back to move forward’ (Erika Taylor). This can be true in finance and business. Particularly, when it comes to improving the ease and efficiency of your FP&A process, sometimes it is necessary to take a ‘step back’ to create a solid foundation to build upon.
Often clients and customers engage our business because they see the value in automating parts of their FP&A process. However, before automation and advanced technologies like AI can be implemented into your systems, the standardisation of the FP&A process needs to be addressed.
Time and time again, we hear the distress of CFOs and their teams, sharing that they struggle with the lengthy and resource-intensive end-of-month process or cumbersome re-forecast attempts. Generally, this is the result of undefined or ambiguous processes and a complete lack of standardisation. This is why it is necessary to put in the groundwork, or what we like to call, ‘pre-work’.
Step 1. Understand the state of current processes.
When embarking on a process of standardisation, it’s necessary to first have a holistic understanding of the current state of processes. Initially, this can seem like a daunting task, and one that does not appear to garner immediate results; however, it is critical for future success.
The importance of documenting current workflows and processes is to provide a baseline. It allows you to chart a new direction, set realistic benchmarks, and will allow you to demonstrate value creation. In this way, standardisation isn’t about cutting costs (though this can be a result), it is about increasing effectiveness.
Step 2. Standardisation of Data and Data Structures
Standardising data and its structures are fundamental components of this process, and their impact is far-reaching. As organisations evolve and become more intricate, the data collection process tends to grow in complexity as well. Over time, businesses tend to accumulate data from diverse sources, often using differing practices, making direct comparisons impossible. Hence, the transformation of data into a uniform format becomes imperative, facilitating seamless collaboration and analysis. This standardisation empowers users to consistently examine data, streamlining processing and enabling straightforward comparisons for more informed decision-making. One of the first steps towards standardisation is data integrity and governance, which can be achieved with a unified data platform like Snowflake.
You may be thinking, why, or how, is this the responsibility of the CFO? Your CIO or CTO will likely be heavily invested in data. However, the CFO and office of finance are well-positioned within the organisation to address the topic of data standardisation and alignment across all departments. Finance can help to promote this collaboration, and in turn, articulate quantifiable returns on investment for the improvements in data quality.
Similarly, the standardisation of your data models plays a vital role in aligning your financial and operational plans. By ensuring uniformity in data models, organisations can effectively bridge the gap between their financial strategies and operational objectives. This alignment enhances the quality of shared results, creating a more cohesive and comprehensive view of your organisation’s performance.
“In the realm of finance, standardisation serves as the backbone of efficiency and precision. It streamlines processes, ensures data integrity, and empowers the finance team with a cohesive capability, enabling them to deliver insights and decisions that drive the organisation’s success” – Serge Radisic, Minerva Partners
Step 3: Build team capability.
One of the best efficiency gains when standardising finance processes is that you can build your team’s capabilities. By creating more efficient formalities and processes around finance operations you can begin to obtain consistent performance and output from your staff.
Standardised and documented processes also greatly benefit new employees, reducing reliance on other staff members for guidance. This leads to a smoother onboarding experience and a reduction in errors and oversights. Over time, this standardisation not only improves employee efficiency but also enables you to put in place realistic benchmarks.
The impact of process standardisation can extend beyond the office of finance. In our experience, clients have enhanced their cross-functional collaborations by introducing finance templates to other business units. These templates facilitate systematic recording, leading to a uniform reporting approach across the business. The outcome of this activity is a noticeable surge in productivity, as all units can operate in sync. This not only streamlines operations but also lays a strong foundation for scalability and growth.
Standardisation ultimately allows FP&A teams to capture data and report their core KPIs in a fast, efficient and accurate manner. This process is something that happens daily, weekly or monthly depending on the business information and standardising this process allows teams to focus on analysis of the information rather than data collection and report building.
Step 4. Consider where automation can lighten your workload:
The last step of the process, yet the one people are often eager to commence with, is automation. Once you have standardised internal processes, data standards, and roles, automation can be layered in to accelerate the benefits.
At Minerva, we have helped companies automate anywhere from 30-70% of their entire month-end process. This includes tasks such as data consolidation, report generation, and aspects of their financial analysis. By harnessing the power of automation, your staff will not only free up valuable time and resources but also elevate the accuracy and reliability of their financial reporting. In turn, this enables teams to focus on higher-value strategic initiatives.
If you are interested in standardising your finance processes, get in contact with Minerva today. Send us an email at firstname.lastname@example.org, or call us at 1300 MINERVA, and we can help.