4 Ways to Take Your Business From Surviving to Thriving
Now, more than ever before, scrutiny is being placed on the decisions made by executives and how they impact performance. So how can executives manage this scrutiny and help their teams do more than just survive, but grow and thrive in the midst of this increased scrutiny?
To answer this question we need to understand the most critical performance challenges faced by business today. There are 4 common performance practices among high achieving organizations. These 4 activities help leaders find opportunities to improve performance and increase profitability, lets explore those:
1. Company-Wide Enterprise Planning
- Do budgets and forecasts differ from actual?
- What is the impact of decision-making on budgets and planning throughout the company?
- How easy is it to understand profits by product type for a given time period?
- How long does it take to get the numbers for a quarter or year-to-date numbers?
Gone are the days when executives could afford to guesstimate, or take shots in the dark. Every company strives to budget and forecast accurately in any economic climate. Often the difference between survival and success can be found in how well, accurate, and quickly organizations financially plan and report. Accurate planning enables executives to make more informed, responsible decisions as the business moves forward. Enterprise planning allows more people to easily participate in the planning cycle. This allows accountability for planning to be extended to individual business units and automates approval workflows at accounting and executive levels. Enterprise planning makes the best use of the collection of corporate knowledge spread among the ranks and puts it to use in the planning and forecasting process for more accurate planning and accountability.
If you are not able to answer the questions above quickly and efficiently, chances are there is room for improvement in your organization. Frankly, many organizations struggle to answer to these questions.
2. Accelerate Accounting and transform the office of Finance
- How long does it take for finance to complete the closing process?
The longer this process takes, the less time your employees have to be working on other tasks, such as financial performance analysis. To transform the office of finance into the backbone of performance executives need to give finance and accounting the time and ability to provide higher value by focusing on activities like budgeting, reporting, and analyses. That is only possible when organizations learn to accelerate closing processes. By analyzing current closing processes and re-engineer them for more efficiency, organizations can typically shrink the process from weeks, to days, or less. Ask yourself;
Does the finance organization know where the company is headed, what will happen, when, and why, early enough to act and react to meet or exceed objectives?
Transforming the office of finance means being able to provide predictable financial and operational performance analysis, along with timely, sustainable compliance and early insights into where the business is headed, relative to goals and forecasts. Transforming finance into the backbone of performance gives decision makers a clear view of what is happening and the ability quickly and precisely adjust plans, targets, and resource allocations across the organization. Executives are better able foresee problems, seize new opportunities, and act in time to keep the organization on course.
Simply put, accounting can be more productive and can do more each month if less of their time is spent in the close process. It may also be possible to reduce the size of the team that performs the close activities and reallocate resources to other finance functions.
3. Managing Strategy and Performance Indicators
- Is there a method to establish benchmarks for current performance that identifies areas for improvement?
- Does the organization strategy include a roadmap that demonstrates the impact on the business, guides and weights initiatives to ensure successful execution?
Scorecards are one of the key tools that can help executives manage strategy effectively and execute on
objectives. Yet many scorecard projects fail or deliver less than desired results. Why? They are not set up efficiently or effectively. Used correctly scorecards are powerful tools to manage performance against the strategy. But to perform this critical task, there are some basic requirements. First, it is vital that executives contribute to setting up the metrics and targets; this is not just IT’s job. It’s also important to integrate scorecards into everyday processes and develop a strategy map to show the relationship among metrics.
An executive decision maker once said “I have lots of information, but very little intelligence”, having data is nice, but more often than not executives need to see it in a form factor that makes sense to the business user. They want to know which areas are excelling within the company as well as which areas are struggling without having to look at multiple scorecards, reports, or spreadsheets. Dashboards featuring the KPI’s specific to company goals and objectives can do just that. Dashboards can be integrated with enterprise planning & reporting solutions enabling decision makers to drill into information to reveal the sources of the indicator and gain intelligence out of information. The combination of high-level visual intelligence provided with detailed analysis ability gives leaders everything they need to steer the business in the right direction.
4. Automated, Consolidated Financials
- How costly is it to generate financial reports, both in time and dollars?
- How confident are decision makers in the integrity of financial reports?
- How many iterations does it take before reports are ready for The Street as well as investors?
Automating consolidation and financial reporting allows organizations to produce financial reports at the touch of a button and reduces the amount of human intervention. Financial reporting solutions make life much easier for everyone involved, and take the manual effort out of the process and dramatically impact process efficiency and regulatory compliance. This gives leaders the ability to focus on the contents of the reports and driving business instead of data aggregation chores and haggling about reporting information validity. Organizations can utilize a reusable set of reports that can be run on demand, making them accessible to even the least technical of people.
There are tremendous opportunity for leaders equipped with the right knowledge to take advantage of the moment. Understanding these elements of performance management can help organizations become more efficient and profitable especially in turbulent times. These performance practices ensure that reliable, accurate information is available and decisions are made by informed leaders to help steer business.
The areas of improvement outlined above can help just about any company become more efficient and profitable. Individually or together, they help ensure that reliable, accurate information is available to help leaders make key decisions that can have a profound impact.