2020 taught us that the old saying is true—that unpredictability is the only predictable thing about life. But when it comes to costs in any organization, predictability is like oxygen. It’s essential.

The human face of cost predictability

 This is especially true for the government, higher education and nonprofit institutions that I work with every day. For you, cost predictability is not only about the dollars and cents of capital expenditures. It’s also the means to the end of delivering the mission—of being there for the people you serve. There’s nothing more real for you. Yet for too many public service organizations, cost predictability doesn’t exist.

The business of your own business

The unpredictability of capital expenditures has long been part of the government financial landscape. It’s like a mountain range of towering peaks, deep valleys, shifting winds and pop-up storms.

In this environment of uncertainty, public finance organizations spend so much time, talent and treasure trying to manage cash flow and predict future funding. Add to that the pressure of the post-pandemic economy and leadership’s nonexistent appetite for surprises. At the same time, these finance departments are expected to focus less on managing transactions and more on supporting strategic decision making.

Public service organizations are mission driven. The more you focus inwardly on the “business of your own business,” the less you can focus on that mission. With COVID-19 changing operational norms and service demand, the last thing you should have to worry about is unpredictable capital expenditures.

A compelling case for change

But it doesn’t have to be this way. Evolving from legacy back-office systems and adopting new cloud-based platforms is key to getting real cost predictability. It’s about modernizing and automating the core with the digital transformation of the back office. The imperative to do this—to create an integrated and adaptive back office with a no-surprises view of costs—is not new for public service organizations. According to Gartner, in the next three years, 60% of governments will have tripled citizen digital service. Yet not even one quarter will be integrated across silos. What’s new is the perfect storm of today’s environment. It’s an undeniable forcing function for change.

The case for change is compelling. And you don’t have to be a technologist to understand it. A cloud-based platform in the back office increases financial transparency, automation and controls. You can say goodbye to data black holes. You can get rid of cobbled-together shadow systems that make it so hard to track costs. You can do forecasting and planning instead of rear-view mirror reporting. And the planet (and your grandchildren) will thank you for eliminating wasteful paper processes. It’s possible with information in one system that delivers greater accountability at the source. This is huge for finance. It has a ripple effect across the enterprise—all the way through to the people you serve.

Consider too the cost picture of future-tech platforms. The back-office technology market has moved to a subscription model, which makes the pricing predictable. This is a game changer. You know what your operational budget for the platform must be. That’s one step toward cost predictability overall.

Start from where you are

My clients are as interested in the financial insights they can get from a modern back office as they are in how these insights can help them prove mission effectiveness. But for many, the prospect of transformation is daunting. I don’t blame them; even positive change is hard.

Here’s my advice. To get where you want to go, you have to start from where you are. If you’re thinking about back-office transformation to improve financial visibility, begin with a clear-eyed view of the fundamentals of how your organization is managing financial information today.

Don’t hold back. And don’t kid yourself. How far are you right now from the cost predictability you need? This may seem like rudimentary work, but it’s the foundation for success. It’s how you can set priorities, determine the scope of your transformation, and lay the groundwork for sound and strategic execution.

Let’s continue the conversation. Connect with me on Twitter and LinkedIn and stay tuned for upcoming blogs.

 

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Ryan Gaetz

Managing Director - Consulting, Accenture Workday Education & Government​ Lead

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