It’s The Process, Stupid!

Software makers, like any business, are always on the hunt for new markets. Where a large enough problem exists, there are probably several automated software packages to solve for that problem.

And financial governance is one huge problem facing many finance managers.

But in the rush to comply with what can seem like an overwhelming landscape of financial regulations, businesses can lose sight of the bigger picture. Compliance with any given regulation should arise naturally, as a side-effect of sound practices governing the Office of Finance. All too often, however, regulatory compliance becomes both the means AND the end, as organizations adapt their financial governance processes into limited feature sets offered by vendors selling compliance with a regulation or business problem of limited scope.

Prior to implementing our Unity Financial Software Suite, several of our clients had been utilizing no less than five compliance packages, each one purchased in the hopes that it might be the “magic bullet”, rapidly transforming their business into a profitable (and compliant) organization. The results are usually less spectacular than advertised: manual workarounds or home-grown solutions are often required to transmit data between these multiple applications, and complicated, custom-built reports must be kludged together in order to give senior decision-makers the information they need to run the business.

By focusing on compliance alone, many software vendors make financial compliance more difficult to achieve (at best) and less likely to occur (at worst).

A more practical approach to financial governance instead streamlines the entire finance lifecycle – from data capture, to customer transaction management, to bank and general ledger reconcilitation, to exception management and resolution, on through to the financial close, financial reporting, and auditor communication. This more holistic view of the Office of Finance allows businesses to focus on developing a healthy process as a means to eventual regulatory compliance.

At this time in most finance organizations, reengineering at the process level has occurred. Even if this reengineering has not yet been fully implemented, these finance transformation projects have distilled an established set of “best practices”. The technologies to embed those best practices into daily workflow are often misaligned with the overall transformation initiatives. The result is a feudal system of warring departments, each fending for itself, hoping that a discretionary budget can help purchase a “magic bullet” to solve its compliance issues.

But the “magic bullet” just doesn’t exist – these bullets might arm one department with the weapons necessary for compliance, while doing damage to other groups, creating inefficiency and additional work for everyone involved.

To avoid this “magic bullet” syndrome, look for three basic characteristics when evaluating a holistic financial governance software package:

  • Extensibility:


    • A modular application architecture should allow your business to “start small” (often in the area causing your business the most pain) and grow into compliance over time. Evaluate the vendor’s responsiveness, the system’s feature set, and your own appetite for radical process transformation prior to moving forward with an enterprise-wide implementation.
  • Scalability:
    • Make sure that the solution is capable of growing along with your business. There are many excellent single-point solutions out there which perform well up to a certain user or data threshold, after which they become effectively useless. Don’t let this happen to you.
  • Flexibility:
    • Your financial governance process is the most important component of your business and compliance strategy. Too many solutions will require you to cut corners in order to fit your process into a feature set of limited scope. Your process should be supported by the system you select, and not the other way around.

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