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.

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

On Home Turf: Sourcing Trends

Photo: Via Wikipedia

Photo: Via Wikipedia

A potent combination of new technologies combined with rising costs in traditionally lower-cost locations and a move toward domestic protectionism has had a direct — and positive — impact on onshore sourcing. That’s the word from a recent Everest post.

Everest points out that traditional service models grew by only 0.1 percent last year, while IT and business process services that were rooted in digital offerings are growing at a rate of 18 percent a year.

Digital Offerings

This echoes a sentiment throughout the analyst community. Horses for Sources has written extensively on the need to tap into a global resource to achieve desired outcomes, and notes that with the rise of digital and as-a-service offerings services become location-neutral. Location becomes a side issue as factors like access to automation, process transformation and alignment with digital business models/outcomes move to the forefront.

As automation becomes the great equalizer, F&A onshore locations are appealing for several reasons. There are a few key reasons: Firstly, there’s a desire for closer proximity to facilitate real-time communication and management; secondly, as business process delivery maturity continues to grow, companies are sourcing more complex tasks and need skilled talent; and lastly, the much discussed new technologies that can drive down costs once gained through labor savings.

The Skill Factor

Talent can be a key consideration. Companies want to ensure that the F&A talent working on their account have the skills and understanding of their industry and organization. The F&A market is maturing and with that maturity comes a need for higher value work, from treasury services to forecasting, planning and analysis. Due to the sensitive nature of this work, as well as compliance issues, companies may want to keep these functions onshore.

In a report from May 2015, Everest reviewed domestic US-based delivery locations, and the south has a clear advantage. By shifting work away from a Tier 1 city, like New York, to a lower cost Tier 2 or Tier 3 city, companies can cut costs anywhere between 15% and 30%, while still drawing a highly skilled human resources.

Locations like our Deloitte-heritage F&A Controllership & Management Center in Tulsa, OK, are optimal for highly complex end-to-end F&A work.  For example, our Tulsa location features a depth of talent, including CPAs, MBAs and Six Sigma experts amongst its staff members.

Located in the Central time makes it highly convenient for real-time communications from both the east and west coasts—and helps companies avoid extensive travel times (and costs) for site visits.

More importantly, our consistent delivery practices, policies and strong internal control structure gave clients the stringent, accurate financial, investor and tax reporting they are looking for.

To learn more about how Sutherland can help improve your F&A function, and to arrange an assessment of your current practices and processes with one of our finance experts, schedule an appointment today.

 

transformation-roadmap

Setting Goals, Meeting Targets: KPIs for the Win

qualityIt’s a fierce business world out there. The stakes are getting ever higher, with growing competition and an increasingly integrated landscape. It’s essential that companies have key performance indicators (KPIs) that can help drive operational improvements, accurately assess performance across all levels of the organization and deliver long-term value.

The only way to achieve all that is to have an effective process for selecting and monitoring KPIs.

The KPI Uncovered

These indicators show how a company or group is performing on its goals, measuring specific activities against a set target or benchmark. Remember, if a measurement doesn’t directly influence the achievement of business goals, it’s not a KPI; it’s merely a metric. Continue reading

A 1-2-3 Approach to Tail Spend Management

600px-shutterstock_157405238To be able to drive down costs as well as reap the additional benefits of a more rigorous tail spend management process, procurement organizations must lead with a best practices approach.

This involves a three-step process of: centralize, analyze and standardize for ongoing transformation.

1. Drive Visibility Through Centralization

Scoping and understanding current contracts at all levels in the organization is critical. Poor data quality is the most common problem across industries and organizations. It’s not unusual to find companies that have procurement agreements issued at various levels and varying business unit entities without a single source of reference to validate agreements, terms and positions. Many times, where a contract application does exist, there is no connection to the procurement system, and once again visibility is thwarted.

Centralizing purchasing activities cuts through the complex and significantly large number of suppliers across procurement categories. Continue reading

5 Ways RPA Increases Data Security

Companies around the world can run the tightest ship, with enforced and strong compliance, there can be a protocol book given to every employee, but walk into any call center or collections center, and inevitably you will see agents with post-it notes or a notebook with client information.

Despite strict protocols, well-intentioned employees can put private and confidential data at risk. From emailing sensitive information —financial, customer, internal or otherwise— using a personal account because it exceeds corporate mailbox limits to chatting with friends about work in a public place, IT managers and compliance officers simply cannot get visibility into all the actions a human may take.

There is no way to gauge what data employees commit to memory, what they retain, what they forget or the knowledge they take with them when they leave for another job. Continue reading

CFO Risks on the Horizon: Regulatory Change

CFO risksFrom data integrity compliance to financial compliance and personal data compliance, the list of federal and regulatory compliance challenges only keeps growing. And, report after report indicates that CFOs are losing sleep over it.

In fact, the latest survey cites 535 global respondents (compromising board members and executives), wherein a full 60% pointed to regulatory change and scrutiny as a risk that will have “significant impact” in their organization in the next year.

F&A Complexity

In today’s busy finance environment, most F&A professionals are immersed in performing their “day jobs.” When the focus is on just getting it done, sometimes proper accounting documentation and process controls aren’t followed to the letter. Without strong internal controls and protocols, it’s easy for financial errors to occur, which can impact investor, customer and vendor relationships. Continue reading

Outsourcing Risk Mitigation Strategies

risk mitigationFor any company testing the waters of outsourcing the first time, a rough transition or an unforeseen risk can quickly sour a buyer-provider relationship. Often, poor transitions (and subsequent engagements) stem from inadequate risk identification and early mitigation.

Risks must be pinpointed, evaluated and prioritized, with a mitigation strategy in place. Here are strategies to help mitigate four of the most common risks associated with outsourcing finance and accounting functions.

Governance Risk: Issue escalation and dispute management

When issues and disputes are not handled correctly, it can present a risk to the client company’s end-user experience and negatively impact revenue.

Mitigation Strategy:
BPO providers must have concentrated focus on five key areas critical to avoiding or eliminating client escalations: Controls, Compliance, Quality, Transformation and Governance. A clear governance model for each phase of any engagement allows BPO providers to adhere to the contract with the client, deliver on SLA and transition work smoothly and in a timely manner. Without them, issues can quickly escalate and client satisfaction can plummet. (You can learn more about our evolving governance model here.) Continue reading

Improve Your Audit Trail with RPA

audit-trailNo matter what the industry, one thing is certain: regulatory requirements and compliance is constantly increasing. Yet, for enterprise organizations, a convergence of legacy systems, globally located F&A departments (many with diverse practices) and information that must be keyed in manually, all add up to inaccurate data and reporting, human error and business process activities that simply don’t have a reliable audit trail.

It’s little wonder that in survey after survey audit risk and compliance management are in the top greatest pressures facing the finance and accounting function. This is where Robotic Process Automation (RPA) can play a significant role.

How Robotic Automation Works

If you’re not familiar with RPA, it’s a ”virtual robot” that performs work, like finance and accounting tasks, in exactly the same way a human user does. Much like their human counterparts, the robots control a virtual keyboard and mouse and use the clipboard function to navigate between screens and around screens. They can click buttons, select from drop-down lists and to click on fields where data is either copied or pasted. In other words, they can do all that repetitive work that back-office talent shouldn’t be doing in the first place. Continue reading

The Evolution of Governance

Finance and Accounting (F&A) outsourcing is a mature service, and buyers are looking for something more than delivering on the agreement. This means never getting complacent and looking for new ways to drive further efficiencies through continuous improvements.

Today, clients aren’t willing to settle for costs reduction through labor arbitrage. No one wants to outsource poor existing processes and see the same outcomes, only cheaper! Today, performance improvement is critical. Clients want technology like automation; they want to know where Robotic Process Automation (RPA) can be applied to reduce manual tasks. Clients want process improvements, and a partner who will come to the table with an idea that is beneficial to both parties.

To deliver beyond table stakes, outsourcing must be governed accordingly.

Any governance model must evolve through the stages of the relationship to avoid “set and forget” stagnation.

Continue reading