Types of Process Improvement
Financial process improvement initiatives touch all aspects of transaction processing and reporting.
TYPICAL FINANCE PROCESS IMPROVEMENT AREAS
- Working Capital Management
- Risk Management enhancements
- Business Intelligence /Corporate Performance Management
- Regulatory compliance & efforts to automate compliance
- Enhanced reporting via XBRL
Increasing Reliance on Technology
Over the years, finance has become increasingly reliant on technology to streamline business functions and consolidate reporting. This trend started with ERP installations in the 1990s and continues today with straight-through processing via web hosted systems, e-commerce, and business intelligence systems.
TYPICAL FINANCE TECHNOLOGIES
- ERP implementation (or consolidations) and add-ons
- Treasury workstations
- E-commerce (EIPP, EBPP, sharing data with trading partners via XML, EDI, etc.)
- Business Intelligence software (dashboards, data warehouses, data mining, etc.)
- Treasury Products (ARC, Remote Capture, etc.)
- Cash Forecasting and Budgeting tools
Challenges plague most technology projects
Companies often experience challenges when implementing technology or introducing change. In fact, research indicates that the majority of technology projects face setbacks, delays, and cost overruns.
STANDISH GROUP REPORTS
An organization called The Standish Group tracks IT project success and failures. The original study was conducted in 1995 and is repeated regularly. Over time the results have not improved.
The Standish Group maintains very strict criteria for project success and their survey indicates that the vast majority of projects fail (see diagram for details). Projects are considered successful only if they are completed on-time and on-budget with all features and functions as originally specified. Only 34% of projects are successful by this measure. The vast majority of technology projects are either over budget, late, or deliver fewer features and functions than originally specified.
Projects are canceled before they ever get completed
Projects are completed and operational but over-budget, over the time estimate, and offer fewer features and functions than originally specified
Projects are completed on-time and on-budget with all features and functions as specified
Source: The Standish Group 2003 survey results based on sample of 13,533 projects
Organizational change has its challenges, too.
Organizational change – with our without technology – is challenging. According to Gartner, 90% of enterprises have undertaken a major change, affecting at least half of their over-all organization in the last two years. Yet, only 5% have been free from unexpected problems or time overruns.
Source: Even Change is Changing: Now it's Organizational Angst
Gartner Research document AV-14-0470, July 27, 2001
What causes these failures? Why do so many process improvement efforts utilizing technology fail to meet objectives?
We'll address the top 10 Project Management challenges and suggest specific remedies in the coming weeks.
The series is archived here.