“That’s the way we’ve always done it” is often considered the most expensive response in business, but it is uttered nearly every day in organizations across the country. Since the industry and customer base has dramatically changed due to software solutions and technology, many organizations are falling behind if they can’t get past entrenched ideas. Simple process changes, communication and software solutions can improve our organizations in countless ways, from automating previously manual tasks to simplifying complex transactions. Why don’t we implement change? Why are we afraid of innovation? How do we challenge and overcome those who say, “We’ve always done it this way,” “The regulators said we couldn’t,” “The old way doesn’t take that long,” “We know there is a better way, but we don’t have time for implementation,” or “We tried a new way once but…”
What is innovation?
Innovation often feels like a big nebulous concept: we’re supposed to develop or create something from nothing. However, that is the definition for “inventing” not “innovating.” Innovation is the transformation or alteration of processes, tasks or technology to increase efficiency and outputs. Recognizing the difference can help eliminate roadblocks to innovation. Improvement can be accomplished through innovations in software, configuration and evaluation.
Many people are afraid of change, but it is inevitable. To survive and thrive in this quickly changing environment you need to find a way to overcome the fear. When evaluating change within your organization it’s important to ask the following questions:
- Are you meeting the expectations of your customers?
- Are you keeping up with your competitors?
- Are you playing “catch-up”?
- How are your teams affected by fear of change?
Keep in mind your organization’s capacity for and speed of change. While you may have agreement to move forward, if you move too fast your teams may not be able to balance their “real jobs” and the implementation timeline. Allowing time for people to adjust to the change, complete training and see the benefits assures acceptance. Through the process of change it’s important to not lose what has made you successful, your image, reputation and most importantly your people.
Innovating in finance and accounting
It is an exciting time for finance and accounting (F&A); for the first time in several decades organizations are focusing on improving these areas. Beyond enterprise resource planning (ERP) systems, there are a number of solutions that save time and automate the “policing” of processes, creating automated accountability. In the middle market, these are some of the key areas of innovation:
- Redefining processes – Often the tools in place are sufficient but not fully utilized. Start with a simple review of how tools and processes are being performed. A tweak of a process, a re-evaluation of risk tolerances, or an elimination of non-value-added activities often yields efficiencies.
- Automating processes – Traditionally, much of F&A has been manual keying, but there are now a number of cost effective solutions available. Expense reporting systems, optical character recognition (OCR) and reconciliation tools can reduce manual efforts and complete many of the checks and balances tasks, allowing more time for analysis.
- Robotic process automation (RPA) – RPA can replicate many of the repetitive tasks within the organization. RPA is excellent for processes that are highly customized to your organization.
- Streamlining communication and collaboration tools – Utilizing workflows for approval processes, identifying bottlenecks and automating accountability saves time for everyone.
- Big data – It has finally arrived in an affordable form for middle market companies. Corporate performance management (CPM) tools allow for analysis of data from multiple sources, by accountants and management teams, not just programmers. These tools typically also automate and streamline the budget process.
- Customer interaction – Interactions with your customers can be facilitated by the implementation of payment portals, communication hubs and self-service options. While these can have a positive effect across the organization as a whole, in F&A they allow for 24x7 service and often customers (internal or external) can find answers to their questions without additional interaction.
Innovation isn’t easy. Once you have conquered the aversion to change, the real work begins. Determining the correct pieces to change, while not affecting the things that made you successful, can be daunting. Breaking down the process into a few steps often helps ease the fear and gain acceptance. Consider the following process:
- Who do we want to be Agree on the vision of the company, division or even a single process. Often starting with something small, to get a quick win will help ease people into innovation.
- Nominate a champion. A champion will own the process and drive acceptance. Create a defined process and success metrics to assist with the team’s communication and acceptance.
- What do you want to do? This is often the hardest step because you want to fix things but can get overwhelmed by the number of options available. Assess your needs, talk to your teams, research customers and understand what is really needed to move forward. Reward great ideas. Challenge those that state “rules” to inhibit change; are those rules real or perceived?
- Buy-in. Once the team has ideas prioritized by need, risk and benefit, present the plan to the management team for acceptance. Innovation works best when executives are supportive and part of the process.
Innovation drives efficiencies, reduces cost and creates sustainable organizational changes that will optimize operational performance. Starting small and highlighting important success stories will help continuous improvement become part of your organization. The key is to identify an issue and then take the first step toward innovation.