Finance and shared services leaders are overwhelmingly enthusiastic about improving core business processes. In fact, 80% believe that doing so can deliver bottom, top, and green-line value at the same time, according to the finance and shared services edition of The Process Optimization Report.
The edition forms part of a broader piece of research, conducted by an independent agency, that surveyed senior business leaders from supply chain, IT, and process and operations functions, as well as finance. It reveals finance and shared services aren’t as far ahead with process optimization as other departments but they are making progress. They see their departments as potential changemakers, capable of driving forward the process optimization agenda – and by extension their entire organization.
Despite a strong appetite for process improvement, finance and shared services functions need to serve up more tangible proof of their commitment. Only 8% of leaders in these functions say they optimize processes on a continuous basis, compared with 17% of supply chain leaders, for instance. Meanwhile, some 62% of finance and shared services leaders haven’t optimized a single process in the last year, compared with just 42% of IT professionals.
This slower uptake of process improvement is also evident when we look at how finance and shared services functions are investing in process optimization technologies. Almost half (46%) are already investing, and 31% plan to invest in the next three years, which is a generally positive trend. But that leaves 23% without plans to adopt process optimization technologies in the near future. This is considerably higher than the 14% that say the same from the process and operations functions.
Process complexity, old technologies, and isolated teams are among the barriers holding back process optimization in finance, finds The Process Optimization Report. The top five are:
Complexity of processes (49%)
Opportunities to improve are hard to identify (46%)
Legacy technology (43%)
Siloed data and teams (42%)
Poor data quality (34%)
These barriers demonstrate a disconnect that sits at the heart of many enterprises and, in this case, is preventing finance and shared services teams from getting their processes in order. It’s a disconnect where individual departments speak their own languages, systems don’t play well together, and processes are hard to see and harder to improve.
The result is sub-optimal processes in business-critical areas like accounts payable and accounts receivable. For finance and shared services teams, the fallout looks like:
Loss of time and productivity
Missed opportunities to capture value
A negative effect on employee morale
Despite a slower start than their peers, many finance and shared services teams are taking action to optimize their processes. Their top motivator? To reduce costs, which is cited as a top-five driver of process optimization by 71%. Two-thirds (66%) say they want to comply with legislation, which makes sense in the highly regulated finance space, while 64% give macroeconomic and competitive pressures as drivers.
Process optimization is delivering a variety of outcomes. Financial results such as revenue growth (52%), optimized working capital (46%), and cost reduction (45%) top the list, followed by reduced risk (40%). In fact, finance and shared services are more likely to see reduced risk as an outcome of process optimization than any other department (the cross-functional average is 34%). They’re also the most likely to see optimized processes boosting employee satisfaction, which is encouraging in a function where employee engagement is a long-standing challenge.
Moving forward with process optimization, both within departments and across organizations, requires teams and individuals to lead the way and act as changemakers. Other business functions don’t necessarily recognize this leadership potential in finance. In fact, the business leaders who took part in the cross-functional survey say finance is the department most likely to be a process excellence laggard (accompanied by compliance and product development).
But this is far from the case within the function itself. More than half (55%) of finance and shared services leaders see their function as actual or potential changemakers, ready and able to inspire action and set an example for process excellence. With 79% of finance and shared services leaders believing process excellence will emerge as a core business discipline within the next five years, they feel they are well placed to make the most of the opportunities this will bring.
To find out more about how 300 finance and shared services leaders across Europe and the United States are currently optimizing their processes, as well as their plans for the future, download The Process Era is Here: Finance edition, How finance and shared services are experiencing processes as a lever for value.Download the Process Optimization Report: Finance Edition