Are Your People Engaged in Your KPIs?

KPIsExecution is everything. You may have the best strategy in the world, but without execution, it dies where it lies. One of the problems that companies of all sizes have is communicating that strategy throughout the organization in a way that makes sense and captivates employees.

If people don’t share a single, sharply focused vision of the desired outcome, any effort to measure that result will be a waste of time.

Many times employees feel disengaged from corporate strategy, or do not have a clear line of sight into how their function or, more specifically, their daily tasks play a role in achieving these overarching goals.

The Individual Aha Moment

The solution lies in cascading Key Performance Indicators (KPIs). This is a method of taking high-level strategic organizational objectives and then translating those into down to indicators at the department level and finally down to the individual level. You need to first cascade business goals, and only then find relevant indicators for each level.

Why is this so important? It helps bring the whole organization into alignment through better communication of the end game and the role that every department plays. When F&A understands their role in moving the needle, as does HR and Sales & Marketing, there is a deeper synergy between these functions.

But it can’t stop at the departmental level. In business journals everywhere you hear about the importance of engaged employees. One of the causes of disengagement is when people don’t see their role as important and don’t understand how they play a bigger role in company objectives.

Our Process

At Sutherland, we use to cascading KPIs to drive discipline, efficiency and quality. We identify high-level strategy and goals, like cost-per-transaction goals. These tend to be very top-line KPIs; many times desk-level personnel don’t have a firm understanding how these indicators apply to their area of activity and daily routine.

To correct that, we cascade these goals down to every level of management. If a desk-level person knows exactly many errors made on a daily basis have a direct impact on the cost-per-transaction goal, the KPIs become tangible.

An interesting side effect is that even if processes are best practices and don’t have to change, there can be substantial efficiency gains simply through performance management. At Sutherland, we post the specific desk-level KPIs that drive process improvement. All staff members can instantly see the desk-level KPIs that are driving larger, more abstract KPI goal.

As a result, it’s one highly engaged team rowing in the same direction toward a common goal.

If you’re interested in learning more about how we approach business transformation and can help deliver outcomes on strategic objectives, schedule an appointment today.

Escaping the Transaction Time Trap

marketing-board-strategyAsk any finance leader how much time their people spend on transaction processing and the answer will be “Too much!” Regardless of organizational size, a recent APQC survey shows that about half of finance teams’ time is spent on transaction processing.

In the last 15 years, more than 50% of Fortune 500 companies have been gobbled up by competitors, gone out of business or simply vanished. The cause? Digital disruption. The “Fourth Industrial Revolution,” characterized by new technology and digital connectivity, is upon us.

Executives and managers understand that in today’s rapidly changing world, excellence is not defined by the throughput of transactions. Keeping pace with change and deliver on outcomes are at the top of everyone’s list. In short, the finance department needs to be faster and more accurate in predicting threats and opportunities. They need more time spent on decision support and analysis.

The Feast or Famine of F&A

Yet, the feast-or-famine cycle of F&A continues to negatively impact an organization’s ability to get the most out of their teams. Highly skilled talent is often underutilized during non-peak times. (It’s not uncommon to see well-paid FP&A analysts performing many manual tasks and rekeying in data.) And, when the quarterly peaks hit, they are often overworked and heading toward burnout.

The staff follows processes and practices that have been in place for years. While these processes may not be “broken,” there are new approaches that can be employed. A recent whitepaper from Blackline predicts that while only 25% of F&A talent is spending time on analysis in 2016, by 2020 that figure will rise to 75%.

Automate for a Productivity Boost

It’s a matter of unleashing the chains of manual accounting work that consumes so much time currently. When mid-market as well as Fortune 500 companies can automate many of their current manual processes, it puts more thinking time — as well as time for creativity and innovation — into the hands of their people.

Automation reduces costly errors caused by overworked staff members and labor-intensive work like rekeying data. Digital technology, workflow tools and smart automation, also enforces a move away from paper-based administrative tasks that show F&A processes to a snail’s pace.

Digital technologies, when combined in tandem with process transformation, have the possibility of automating much of the transactional work that F&A talent are paid to perform. Isn’t it time you got more from your people?

To find out how Sutherland can work with your teams to bring smart automation and better processes to your organization, we’d be happy to advise you and offer an expert assessment of your current practices.

transformation-roadmap

The Burnout Brink

600px-shutterstock_140576308In our lives and workplaces, stress is playing a bigger and bigger role. The speed of business is moving faster than ever, emails pour into our inboxes all day long, and employees are expected to keep pace with an increasing workload. And that 40-hour workweek? Gallup says the norm is more like 47 hours. It’s little wonder it’s called “the daily grind.”

The Wall Street Journal has reported that the problem of employee burnout is worsening resulting in steep turnover and high health costs. A survey conducted by Kronos Incorporated and Future Workplace found 95 percent of human resource leaders admit employee burnout is sabotaging workforce retention, yet there is no obvious solution on the horizon.

A “burn and churn” culture rapidly decreases employee engagement, loyalty and productivity. And, larger organizations are more likely to bear the brunt of burnout. One in five HR leaders at organizations with 100 to 500 employees cited burnout as the cause of 10 percent or less of their turnover while 15 percent of HR leaders at organizations larger than 2,500 employees say burnout causes 50 percent or more of annual turnover. Continue reading

Finance’s New Directive & The Need for Data-Driven Insights

There’s a new business imperative: go digital. No matter what industry, no matter what business function. Digital technology and strategies are no longer just under the purview of edgy marketing departments or hip, online retailers, they are being infused into all aspects of any organization—even the finance department.

CFOs and their teams understand that unless they start to leverage cloud and web-based platforms, and embrace new automation and smart technologies, they risk obsolesce.

The Digital Impact

What is propelling this new emphasis on F&A digital transformation is four major drivers:

Data is the new currency. With the mass collection of structured and unstructured data, companies are actively looking for effective ways to make sense of it all. The ultimate goal is to apply data analytics to create actionable insights.

Increased focus on business outcomes. Lowered costs are a given in these days of doing more with less, but now the bigger (and more interesting) conversation is centered upon driving outcomes for business benefit. F&A departments are now expected to be a partner to operations, marketing, HR and R&D.

The rise of intelligent automation. Why have people perform transactional activities that machines (like Robotic Process Automation units) can do? There is a concentrated effort on shifting from transactional talent to digital talent, of moving people out of “busy hands” work, and toward the “mind work” that moves the needle on objectives.

The need for organizational agility. Every company wants to be faster and more agile in the marketplace. This means offloading simpler, less differentiating functions so that the organization can concentrate on core competencies, and more complex processes.

How to Transform Order-to-Cash

Yet between the desire to transform and the successful execution of a transformation mandate there lays a gapping chasm. Companies would be best served to apply a best-practices approach can accelerate the change initiative. This involves:

  1. Defining the service strategy. This helps companies to align service quality according to customer segments’ requirements, reduce the cost-to-serve, and increase internal flexibility and discipline.
  2. Establishing the organizational structure, often with new specialized roles, and ensuring buy-in.
  3. Evaluating centralization and partnering with a process transformation company as key levers to improve flexibility and decrease costs.
  4. Connecting end-to-end processes and align neighboring functions’ activities towards the common goal: customer satisfaction.
  5. Incorporating the latest appropriate technology (digital and analytics) that will enable predictive insights.

Our Webinar

If you’d like to know more about how to use data-driven finance to achieve excellence in the Order-to-Cash function, listen into the webinar with Sutherland’s Jon Sunthimer, Vice President, F&A Global Technology Leader, co-hosted a webinar with Veena Gundavelli, the Founder and CEO of Emagia Corporation.

Visit here to listen to the playback or get a free ebook.

Don’t Automate Inefficiency

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” Bill Gates

We sit at a tipping point. Technology is changing the way companies operate and interact, with their customers and within their own internal operations. CFOs are looking to flip the ratio of transactional work vs. strategic work. They are steering their organizations away from manual work and spreadsheets and are championing the use of progressive automation to increase their people’s amount of time spent being a forward-looking asset to the company.

Technology can improve both the speed and quality of your internal processes throughout the F&A function. This means engaging technology like Robotic Process Automation, which can act as a virtual workforce that can be scaled up or down as required, doesn’t require performance reviews and perhaps more importantly, will never leave to go work for the competition.

RPA has attributes and capabilities that go far beyond those of traditional automation. It’s important to use it fully. It can stitch together disparate systems without requiring direct integration. It can pull and manipulate data between legacy systems, giving companies better transparency and a much better understanding of their operations.

Not an Equilateral Triangle

Traditionally, the “business triangle” has been represented by an equilateral triangle with People, Process and Technology sitting at each side. The trend today is to assume that technology is starting to take up more of that triangle’s real estate. However, technology alone does not solve business problems.

It can be easy to simply view robotics as an accelerant for the as-is processes. While this typically leads to slight improvements (especially in terms of labor costs or data quality), the real value of RPA is the ability to use it to transform business processes. This means casting a critical eye on the process part of the equation to avoid the old adage of “garbage in, garbage out.”

Organizations need to step back and analyze the new capabilities RPA can provide in order to design a future “to-be” state. From Order-to-Cash to Record-to-Report, it is critical to assess each aspect of every process that exists within those functions. Focus on the outcome first and then focus on how your people, processes and technology can support those outcomes.

Standalone Technology? Or a Partnership?

As a standalone product, RPA is an effective way of automating repetitive tasks and manual intervention. But when combined with F&A service delivery from a process transformation partner, RPA has the potential to deliver much greater impact.

At Sutherland we provide advisory services, to help clients identify where they can optimize processes and eliminate existing exceptions. Whether the exception relates to order entry, invoicing or collections, non-standardized practices cause slowdowns, manual labor and errors. An end-to-end perspective is the catalyst for maximizing straight-through processes. From transition to continuous improvement, we take a long-term view to be able to plan and execute on the “future organization.”

If you are looking for a trusted advisor, one that has extensive experience in new service delivery automation technologies, and understands how and where to apply them, contact our F&A and RPA experts for an assessment of your processes.

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Reporting’s Dirty Little Secret: Manual Processes

600px-shutterstock_166797077Around the world there seems to be one business mantra: Do more with less. Large, multi-national organizations are looking to achieve Silicon Valley start-up agility. Nowhere else is this felt more intensely than in the Finance department. Data and insights are needed now. Not tomorrow, and definitely not next week.

Finance execs are under pressure from boards, local authorities and auditors to improve the timeliness, visibility and efficiency of their reports. They are expected to generate consolidating accurate insights from across multiple borders and operational boundaries– despite currency fluxes, and other economic uncertainties.

The F&A department has been tasked with the challenge to be more nimble, especially when it comes to reporting. This means more transparency into trends and revenue, and predictive “what-if” modeling to be able to prevent risk accurately and assess future budget needs. All with full confidence in the outputs.

Yet over the years, confidence in the accuracy and compliance of financial reporting has plummeted.

In the face of an ever-increasing regulatory scrutiny and a more complex business environment, the challenge of “thinking and acting like a start-up” while producing precise, real-time reports can be overwhelming.

Pivot on a Dime

The problem lies in not only legacy systems, but in legacy processes that have been in place for five, ten, twenty years or more. Continue reading

Duke CFO Survey Reveals Optimistic Outlook

money-forecastingAccording to the latest Duke CFO Global Business Outlook, U.S. finance executives are more confident about economic growth than they have been in over a dozen years. The U.S. Optimism Index jumped to 69 (on a 100-point scale), the highest it’s been in 14 years, and much higher than the survey’s long-run average of 60.

In a written statement, John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey, said: “The jump in business optimism is leading to strong hiring and spending plans for 2017. Our analysis of past forecasts shows that the Optimism Index is an accurate predictor of GDP growth and employment over the next year.”

Indeed, 61% of U.S. firms surveyed plan to boost their payrolls this year, with an average increase of roughly 3%. As well, among American CFOs at both public and private firms:

  • 8% plan to increase capital spending, up from 1.4% last quarter
  • 3% plan to increase technology spending
  • 0% expect to increase R&D spending, up from 0.9% last quarter
  • 5% anticipate a rise in full-time employment
  • 9% expect increases in wages and salaries
  • 1% anticipate an increase in revenue, up from 4.4% in both previous quarters

Continue reading

Why F&A Can Be Your Organization’s Secret Weapon

What do you think of when you think of the F&A department? People issuing invoices, reconciling journals or creating a monthly financial statement? Yes, it’s that, but F&A has the potential to be a lot more.

One of the current trends in office design is to create open spaces of cross-functional teams. Designers are looking to see how the physical workplace can be a better partner to employees by fostering collaboration, teamwork, new ideas and new ways of working. They are looking to draw from all areas of the company in order to drive strategy and find new opportunities.

A Big-Picture View

In many ways the F&A department can be seen as an analogy to this same concept. How? Finance gathers financial and non-financial data from all disparate departments and lines of business—from operations, marketing, HR, R&D, etc. As a repository of information, finance is in the unique position of having a window to every aspect of the company.

The finance organization can therefore be a powerful agent of organizational change. It can leverage the information that it collects to assist executives and business managers to optimize processes, achieve goals, avert problems, and make decisions. In short, F&A can be a valuable partner to other departments in the company. Continue reading

The New F&A Essential: Skilled Talent

No matter where you look, it’s getting increasingly difficult to find F&A help that has the right mix of abilities. Between the shrinking unemployment rate and a growing demand for talents that far exceed traditional finance skills, companies are continually at a loss to find qualified personnel.

Yet people are an essential component to success in any industry. Businesses require the right staff in place to ensure high-level performance and optimal customer satisfaction. So, what are companies to do when they’re unable to find or retain the high-value workers they need?

The talent war is one of the most pervasive risks organizations face. In survey after survey, executives report having succession challenges and difficulty attracting and retaining top talent.

And it just might get a little harder in 2017. According to the latest Salary Guide for Accounting and Finance from staffing agency Robert Half, salary levels are expected to rise by an average of 3.7% in 2017. It’s a new reality that finance leaders have become all too familiar with: when it comes to modern-day F&A, the power lies with the prospective hire.

Skilled professionals are in high demand and short supply, and employers have no choice but to negotiate competitive compensation packages. Today’s professionals don’t need to ride out long hiring processes; with multiple offers on the table, they’ll opt for the one that is most engaging and financially rewarding. Continue reading

7 Signs of You Have an Accounts Receivable Problem

accounts receivableEvery year, companies around the world write off millions of dollars of both B2C and B2B bad debt. But in these tough economic times, ensuring cash flow and an optimized Account Receivable (AR) process is the lifeline of any business. Getting paid on time is key—and when you don’t, then getting AR right is more important than ever.

If you see any of these signs in your Accounts Receivable department, there just may be a problem that needs addressing:

  1. Your DSO is High or Constantly in Flux: Days Sales Outstanding (DSO) is the bellwether metric for any AR organization. When it is high, that means you are probably in the habit of extending credit to clients, which is a risk. Also, high DSO negatively impacts cash flow. If it continues to creep up, there is less of a chance you will eventually collect on those overdue accounts.

Continue reading