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UX/Mobile/Responsive

Day 3 2007 OOW – The Business Value of Technology-Enabled Best Practices in Finance Organizations

By Larry Grey • November 15, 2007

 

This presentation talked about how to benchmark the performance of your finance organization. It discusses it from a Hackett Group perspective, who does a lot of this.

What is Benchmarking?
This is different from what your DBA calls benchmarking. Essentially, they’re looking at efficiency and effectiveness of a given business function. This gets into many of the concepts important to embedded analytics, because you’re aligning the measurement with the business processes.

Impact to a Finance Organization
For a finance department, the focus on cash flow optimization as key driver as effectiveness of finance organization.

The slides had some very good information related to business processes that occur in a finance organization (for most folks, it’s a bit more nebulous than the business processes for HR, for example, where you hire, incent, manage, and terminate employees as business processes)

Here are many of the processes that span SG&A

  • Cash disbursements
  • revenue cycle
  • accounting and external reportring
  • tax management
  • treasury (cash) management
  • compliance management
  • planning and financial performance management
  • businsess analysis
  • function management

Here are the Procurement business processes

  • supply data mangement
  • requisition and po processing
  • supplier scheduling
  • receipt processing
  • compliance management
  • customer management

He then went on to illustrate how for each process, you should think about benchmarking. He showed the following formula:

Demand drivers + structural factors = performance metrics

or

processes organizations perform + how organizaitons structure themselves and conduct those processes = Measurement of how well the organization is doing

one last translation

Business Operation + Dimension = Key Performance Metric

Summary

One of the things I liked about this presentation was how it identified the business processes that are part of a finance organization, and how you can align the things you measure with those operations you’re performing. Although this isn’t a BI presentation, much of what was illustrated translates well into the BI world, where analysis isn’t easily tied to the tasks that people perform (and ultimately, what organizations need to continuously improve).

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