Financial transformation efforts are often viewed primarily as technology projects, but process improvements and people are more important to an initiative’s ultimate success than software tools.
“For technology to work, you have to develop the proper process improvements or it’s not going to work,” said Robert Michlewicz, chief revenue officer for financial reporting software provider Trintech. “We see too many companies saying technology is the answer, but without addressing the process and people components, the transformation effort is not likely to work. Without evaluating process, people and technology, financial transformation is a false strategy.”
Michlewicz, speaking at a meeting of FEI’s Committee on Finance & IT (CFIT), cited the common perception that most ERP projects fall short of an organization’s objectives. In many of those instances, Michlewicz said, the company and its technology partners fail to understand the organization’s needs, don’t enhance the underlying processes the ERP was trying to manage, or don’t consider how the organization may evolve during (or soon after) the ERP implementation.
“Companies need to understand where they, and their finance organizations, need to be,” Michlewicz said. “Where is finance today? What are its challenges? What are its staffing needs? Is there a place where these factors are going to be considered in an overall plan?
“What we find is that a lot of times when there’s a technology initiative, it’s not taken in conjunction with a financial governance map. That’s a step a lot of companies miss before they start implementing technology.”
Another common obstacle to successful finance transformation efforts, Michlewicz said, is failing to identify common key performance indicators (KPIs) and to unify incompatible sources of organizational data.
“We focus on KPIs a lot because there’s so much we’re trying to do from a [reporting] perspective about helping companies develop the right metrics and track those properly,” he said. “Are there cases where companies don’t have the right KPIs? Or where they don’t have a way to measure them because their software is so disparate that it can’t pull together a common set of KPIs it can manage to.”
Along with data and KPIs, process...