We’ve already examined why government organisations need to unlock business value from investments in back-office process and system upgrades. This time, we look at finance’s vital role in value generation.
The finance function is increasingly relied on to support strategic decision-making and drive enhanced operational performance. But in many government organisations, that’s still a big challenge.
Traditionally, finance has focused on transaction recording and compliance. A combination of factors – including manual processes, duplication of systems and data quality issues – have all impacted its efficiency.
That’s why it’s been difficult for finance to fulfil new expectations for value creation. But now, we’re seeing some visionary government CFOs take this function to the next level through operational transformation.
Working with operations, finance teams are mastering data and harnessing new intelligent technologies to deliver insights identifying where value can be found today – and predicting where it will come from next.
So how does finance capture this value and demonstrate it to the organisation? Some value, like hard cash savings, is tangible. For example, it’s relatively straightforward to compute the benefits that automation can bring in.
Say 20 people each spend 10 hours a month generating financial reports, that’s 200 hours of effort. By automating development of these reports, 200 hours can be saved. Those hours can be spent on high-value activities like analysing the results of the reports to generate insights that help to unlock business value.
Automation can also unlock value in core finance processes. Take budgeting cycles, for example. It’s possible to realise tangible benefits by standardising those processes, replacing multiple spreadsheets with a single database and introducing automation. This would save significant time and effort. And staff could be redeployed to value-added activities like zero-based budgeting that allows a fundamental relook at spend effectiveness.
In other areas of finance – like more accurate forecasting or increased transparency – it’s less easy to precisely quantify the immediate value that will be created through digital transformation. But that certainly should not undermine the business case for investment.
After all, having a standardised, more transparent and easier to audit process will translate into less time dealing with auditors’ queries and fewer audit hours billed. Another benefit will be improved regulatory compliance. With a unified financial and operational data repository as the ‘single source of the truth’, the risk of non-compliance should be mitigated.
Finance analytics, applied to this unified data repository, will deliver valuable new insights across other areas. Scheduling is one example. Large government organisations can have thousands of people scheduling key tasks, often manually. By applying analytics to this process, it’s possible to identify inefficiencies and make massive savings on overtime budgets.
Enabling finance to run scenarios, at different levels of detail, analytics can also be used to provide baseline predictions in targeted areas of the P&L, measure how corrective actions can alter likely outcomes, and identify causes generating good or bad performance.
Finance has an unprecedented opportunity to deliver on heightened value expectations. But while most government sector organisations know where savings can be made, they struggle to kickstart the transformations needed to realise them. So how to begin the journey?
In most cases, it makes most sense to concentrate initially on a key finance activity, like planning and budgeting or financial close. By pushing targeted change programmes ahead at pace and validating progress, they can help to build momentum and release financial value earlier for reinvestment in new capabilities.
To learn more about unlocking business value in the back office, visit www.accenture.com/uk/ibo