Automation in finance: conquering spreadsheets the agile way

Ask questions before you start crunching data

A more efficient finance department equals more money

As technology evolves with a rapid pace, firms are increasingly turning to automated processes to save both time and manpower. However, the problem is that many companies tend to crunch data first and then ask questions later, when really it needs to be the other way round in order to maximise the benefits of automation.

Here are a few considerations that must be taken into account when implementing automation technology to make financial processes run more smoothly, rather than complicating them.

The end goal

From a finance perspective, businesses and their CFOs should recognise that engaging less with spreadsheets and more with the business will yield positive results. However, achieving this will need a change of mind-set.

Automation implies a production line – production is a science, and involves a systematic approach to the task at hand. Automation also implies a mix of empowerment and control. For example, an automated report without supporting detail costs time, because the process must often be repeated manually to test it. In these instances, staff are left baffled when reports do not seem to show the "right" numbers.

Spreadsheets

There is no doubt that spreadsheets are a fantastic end-user tool. However, given that research shows that more than 80% of spreadsheets have errors, there is undeniably a problem.

Much of this can be attributed to the fact that every time a spreadsheet process is run, the design of the spreadsheet is changed. Production lines are not changed every time a product is manufactured in other industries, so it should not be the case with finance processes. In many cases, there seems to be no formal capture of what we call "Process Intellectual Property" within the process, which remains predominantly in the mind of the spreadsheet designer.

Business Intelligence

If spreadsheets represent both an agile experience and poor control, then other tools can be the opposite. Business Intelligence has tended to be finance unfriendly, providing so much control that users feel "forced" back into their spreadsheets.

Whether Business Intelligence is right for individual companies will vary greatly, but one of the top challenges that accountants report is that the solutions they are provided with are not flexible enough.

An agile focus

Newer technology provides configuration capabilities that deliver better business agility. Separating control and execution is important, but allowing business users to configure processes themselves in a safe and secure environment can be truly empowering.

Financial planning and forecasting is one process that requires both strong controls and agility. If a finance person was able to rapidly change an automated planning computation in a systematic, auditable way, both agility and control could be achieved, yielding a superior outcome.

Reduce environments to gain performance

Experience tells us that the more environments that individuals work across, the more disproportionately ineffective they become. One of finance's greatest technical challenges is that data tends to be processed and information presented, and that the sources of this data can span many different systems, even within a single process.

The key to achieving this is to use technologies that can both compute and present information in the same interface – this enables full end-to-end automation, which is a great start to improved processes and results.

Don't leave it until the month end

The month end process comes round quickly, and the same snags occur time after time, requiring finance teams to make manual corrections that could have been foreseen. Treat these situations like "product recalls". To make your processes even smoother, diagnostic tools can be used to detect errors in ledgers and other source systems before the month end arrives.

Most errors are well known and have happened before, meaning they should be easily tested for, with the ability (i.e. the configuration capability) to add new diagnostics quickly.

Describe your business dimensionally

Finance directors have branches, products, accounts, and other data dimensions around the ledger and elsewhere. But is it formalised? And then we might do well to ask whether or not users know (and agree on) what all of these are.

New financial planning automation engagements often require a significant amount of time to establish consensus around just what makes up the business, and how it is defined. Processes can simply not be automated without a sound knowledge of what makes the business tick, and how it works. However, automation can certainly help you to put this knowledge to good use.

Firms must establish what they hope to gain from their data, and there are sophisticated processes that can be put in place to collect and report on this information automatically. This way, firms will not only increase their efficiency, but also gain valuable information with little ongoing effort, and achieve smoother processes through automated technology.

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