#311: Monday Memo: Is There A Need For More Speed In Finance?

#311: Monday Memo: Is There A Need For More Speed In Finance?

Is there a need for more speed in Finance?
I was recently sent an infographic that suggested 73% of Finance professionals faced pressure to speed up. On the one hand this is no surprise and on the other is speed really the most important thing to our stakeholders?
In this bite-sized episode I share some thoughts on how we handle this question.


Andrew: [00:00:00] Hi everyone. And welcome to this week’s Monday memo. And today I’d like to thank Amrish Shah for sending me a link to the topic of today’s conversation. What he did is he sent me an infographic from Gartner that suggests that 73% of finance professionals faced pressure to speed up. And then I was thinking, is there really a need for us in finance to speed up? of course it’s no surprise. That’s then I was thinking  what was this company Gartner trying to show? Because I felt it was a bit of a loaded question. Of course, if we all speed up, isn’t that a good thing? Isn’t that what we all want, all of those things being equal, but I don’t feel it feel, it probably captures all the trade-offs because there’s other things happening.

[00:00:45]For those of you familiar with project management, There’s that magic triangle, where you’ve got cost, scope and speed. And it’s all about getting a balance of those three together for the most optimal outcomes. And, I always believe as well that, yeah, speed’s important. And you don’t want to be slow in what you do.

[00:01:05] And particularly if we want to build, influence and be impactful in our finance careers. but speed, isn’t always the most important measure. of how well we’re doing in finance, our stakeholders. that’s what I believe. if speed is something that our stakeholders would pay, I, if we’re faster, would they pay for it?

[00:01:24]particularly if it was to come out of their budget, or would they, they sacrifice a particularly slow but useful practical report that they were finding. if that was the speed of delivery, would they sign off on that? I don’t think they probably would. So when you delve into the details on the pending Gartner’s claim, it does go through the top 10 instances of where finance immense be the slowest.

[00:01:52] And number one was board level reporting. Number two was setting annual targets and three was a corporate level performance reporting. Now I don’t know about you. listening in, but for me, there were fairly infrequent activities performed, generally speaking by a small proportion of finance professionals.

[00:02:14]and when I looked at the bottom of the list, things like approving funding, deal reviews, tracking performance against plan, business level reporting, preparing returns like taxes and annual returns. they were deemed to be much faster and less pressure to speed up. So that’s actually good because that was the bulk of our activity.

[00:02:33] So according to this research We tend to be quite quick at the things that we do most often. so why do we still feel this pressure to speed up. And in my mind, there’s probably two main drivers there.

[00:02:45] One’s on the operational side, the others on the strategic operational, and one, I think we’re all familiar with those key challenges, poor data, particularly those of us who are played by slow. difficult to access inaccurate data. Think how much time we spent cleaning, correcting blending data, identifying errors, which are sometimes out of our control due to lack of investment and legacy systems.

[00:03:13] And then you’ve got this other aspect of what we do in finance or occurs or to benefit. we have to tend to work through multiple groups. So there’s various handoffs. in our activities, whether internally across multiple teams, some people call them swim lanes as to where I tend to like to look at things.

[00:03:32] So for example, production of a number and an income statement, it might have to flow through say data entry and accounts. data might get journal by a digital ledger accounting team. it needs to be reviewed by controllers, signed off by directors, compiled by FP&A, and maybe final review by the CFO.

[00:03:51] So plenty of points where people’s opinions of the data and trying to make it more accurate and blended and get better insights out of it could happen. So that’s really going to lead to slowness. So that’s just our basic operational reasons. And then strategic, what we call maybe corporate or office politics, defining our culture, causing us maybe to do some things at the expense of others.

[00:04:14] So let’s take, for example, those who shout the loudest. And so let’s say we very few powerful managers at the top of the business. they want faster board insights, faster budgets. assuming who wants to be caught in budget cycles forever. It just seems like they go on and on. If only we could speed them up.

[00:04:34]these are just general cultural challenges, again, a outside of our control, but the pressure still comes from the top. Those are shout the loudest. And those that expect us to report our top, prioritize our time to speed those sorts of things up. And again, I would suggest are those same leaders shouting the loudest willing to pay from their budgets for us to speed up, or deliver that increased scope at a faster speed.

[00:04:59]I don’t think they probably would. it’s hard enough to get incremental approval for the things we do very well and do quite quickly already. being caught in the conundrum that we can’t really control too much. what sort of things can we control and do something about?

[00:05:15]probably three, maybe four areas. The first one would be proactive expectation management. It’s essentially means talking to our stakeholders, understand how fast is acceptable to them. And at what scope and cost, prepare a business case. If there’s investment required to iron out some of those, and then set up SLOs or service level objectives and measure them, report them what gets measured gets managed.

[00:05:43] So you’ll know if you’re going fast enough and share those results with just stakeholders, check in with them and make sure that is indeed the right level of speed you need to be going out. So that might take some of the pressure off of having to go faster. And again, if it’s not working update the business case, if there needs to be enhancements, update the business case and decide if the investment and speed is actually worth it, a willingness to pay is a very powerful indicator of what stakeholders really want.

[00:06:11] The second one is to get line of sight into our processes end to end at do what we’re good at checklist them understand the value added ones and the non-value-added ones. And eliminate those, someone who’s perhaps got experience a lean six Sigma, or awesome continuous improvement or project management type background might understand the critical path analysis and removing the non-value added parts.

[00:06:37] So if that was applied to say our budgeting, or I like seen the sort of lean six Sigma idea and understanding of the hard and soft benefits. And removal of non-value added activities work very well, particularly when it comes to budgeting. And also when it comes to trying to reduce the variation between operational forecasts and the actual numbers that turn out at the end of a period.

[00:07:01]And another thing I like about the lean six Sigma is probably touching on the first point is it looks at what’s critical to the customer. So it’s, it is critical that should then be captured and managed as part of a lean six Sigma initiative. And then after you do the first two, you’ll get to know the various value, the business pace, places on processes and the outcomes you deliver.

[00:07:23] So I’d suggest, set up a value log, prioritize those activities that deliver the greatest value track, where you’ve been adding value. And also it might not be about. Maximizing the speed, but given the resources available is generally a sense of optimizing to speed relative to other competing requirements, around scope as well as cost.

[00:07:44]Okay. And that’s where I felt properly the headline of the Gartner report. This need for speed. Probably could’ve been instructed a bit better to talk about how to get the best or the optimal speed. Because all our finance teams, as much as we share some commonalities, our own circumstances could easily be very different.

[00:08:02] And therefore what applies to one doesn’t have to apply to the other. And maybe that’s where I think the fourth area comes into focus. If we were to do a fourth thing, which yeah, I know it’s a bit of a shameless plug, but I’d encourage you to check out other episodes, with the interviews, with our guest mentors and learn from what works well for them and what could work better and maybe be, could be applied in your own teams, environments, and careers. So the hope you enjoyed this week’s episode, if you did, please.

[00:08:30]Share us with your friends. You can subscribe on all the major platforms, iTunes, Stitcher, SoundCloud, YouTube, and Spotify, and as always, really appreciate you tuning in today and investing your time with us. So until next time, take care of yourselves. I let’s keep on building our strength and the numbers.

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