Bridge the gaps that hinder Collaboration
Finance Departments know how important it is for planning to be a collaborative process. That’s because to generate the best plans means effectively pulling together timely, accurate, and complete data from across all departments, divisions, business units, and/or locations.
However, when it comes time to preparing budgets or forecasts, the Finance Department’s requests for insights and data from other company areas are met with hesitation, delays, or silence.
While Finance executives from across the globe implement process automation techniques to tackle this challenge, they have shared with me the five key reasons why participation and collaborating levels throughout planning processes are lower than they need to be to ensure outstanding planning results.
Reason #1 – A Knowledge Gap. Every day it gets more complicated for professionals to gather, sift through, and make sense of company data. In fact, the introduction of every new product, new division, new employee, new law, or new process comes with its own storehouse of related financial and non-financial data. This tsunami of data makes it increasingly difficult for professionals – in every corner of an organization – to know which information should be provided throughout budgeting, forecasting, and planning processes.
The Solution: Since financial data is at the heart of every successful organization, every company leaders needs to devote resources to help their Finance professionals harness the growing volume of data. That means making sure that the tools and training are in place which allow them to easily gather the data, mine the data and develop practical and actionable recommendations.
Reason #2 – A Process Gap. All areas within growing and ambitious companies, grapple with how best to share their financial and non-financial data. What gets shared? When? When sharing it, how does it remain secure? Department leaders care about their data. When processes for sharing data are questionable or cumbersome, quite naturally, the frequency and types of collaboration are dramatically reduced.
The Solution: Finance leaders need to take a lead and look outside their company – checking in with industry colleagues to identify ways of improving work process and data automation. By introducing and championing such initiatives, the Finance Department increases the confidence in collaboration and planning processes alike.
Reason #3 – A Culture Gap. Let’s face it: being locked into a set of numbers – regardless of how much time and effort goes into generating them – is always a bit scary. What if the numbers are incomplete or inaccurate? The reality is that the world is changing so quickly that some of the numbers will inevitably have a limited shelf-life. While Department leaders provide as much context as possible, they also realize that they will be held accountable for the numbers they submit. This leads to a reluctance in submitting or generating numbers if there is little acceptance for how the shifting nature of business will affect the validity of numbers.
The Solution: You can adjust your culture in ways that encourage your departments to provide their data/plans by asking some of these critical questions: “Do we understand why some of our KPIs fluctuate dramatically?” “To what extent do we acknowledge or punish the variation in the numbers/recommendations emerging from our Department leaders?”, “Are we holding on to the numbers to the exclusion of the context in which they were prepared?”, and “Are we arming the Finance Department with the tools that help them better make sense of the numbers?”
Reason #4 – A Value Gap. Do your Department leaders really understand the relationship between the numbers they provide to the Finance Department and how that information is translated into actionable recommendations? In fast-moving growth-oriented companies, this ‘bridge’ needs to be built and constantly reinforced.
The Solution: Finance need to devote time to work with every department leader and explain/reinforce how their numbers affect their own areas and the company’s overall financial/strategic health. At the same time, senior management needs to model collaboration so that all departments see that it is an important way of behaving.
Reason #5: – A Political Gap. Because the outcomes of budgeting, forecasting, and planning lead to a company focusing its resources on some Departments and/or initiatives over others, the priorities and projects of some people are postponed or cancelled. When this happens, people will feel disappointed – which causes them to question the decision-making process and the data upon which it is based. In particular, those who believe that decisions are ‘personal’ rather than based on business criteria will far less likely to collaborate throughout planning.
The Solution: While every planning process can be improved upon, you will dramatically reduce what can be perceived as political bias by introducing tools and processes that actively involve people in the planning process. In fact, by shining a bright light on how a department’s numbers shapes its projects (and the company’s overall plans) increases the willingness to collaborate.
Corporate Performance Management (CPM) solutions – such as Prophix – help you to bridge the gaps that hinder collaboration. That’s because CPM software tracks workflow processes, automates notifications, and enables efficient task approvals. By building a strong foundation for collaboration throughout the planning process you achieve better budgets, better plans, and ultimately, better results.