7 strategies to ensure your consolidation process does not result in loss of business agility
Posted by David McAughtrie
The demands of international competition have led to an increased focus on business agility. Responding accurately to changes across borders and sectors requires intelligence that group controllers contribute through precise, detailed reporting. Strategies that ensure your consolidation process doesn't cause a loss of business agility revolve around streamlined technology, motivated communication and the realization that agile operations feed efficiency.
1. Connect data sources into a single system
Consolidation and reporting involve multiple streams of information across enterprise resource planning (ERP) platforms, creating conditions that support the manifestation of data silos. Data silos consist of sets of files or databases that haven't been integrated within a centralized, enterprise-wide software solution. Silos result in opaque information systems that require additional effort to extract, process and analyze results.
Conflating as many sources of data as possible into a single solution eliminates barriers that prevent business flexibility. When databases cannot communicate with one another, blind spots proliferate, reducing insight while increasing the potential for the mishandling of important data through manual import.
2. Balance insight with analytics
The strategies your organization pursues to boost productivity will be multifaceted, reflecting the diverse holdings under the umbrella of the group. Various insights for each property must be applied in response to changing market conditions, shifting strategy accordingly. Regardless of the alterations planned, group controllers should always test projections as thoroughly as possible.
Testing insight through analytics allows you to adjust variables that affect key performance indicators (KPIs) without risk. Consolidation software that combines the data from separate ERPs eases the burden of reporting by streamlining different systems into a single analytics process. The ability to rapidly run reports that test insights and KPIs ensures your processes remain flexible and able to adapt with subtle changes that may make a big difference.
3. Minimize latency
The amount of time that you require to successfully respond to changes in the market determines the ROI of your consolidation endeavors. As with most other investments, getting in on the ground floor maximizes the profits derived for the entire group. Enterprises that quickly leverage advantages prosper more than slower counterparts.
Efficient consolidation software holds the key to establishing the ability to read and react to situations as fast as possible. Acquisitions that involve onboarding new ERP apps and databases should make use of data-importing tools that automatically clean and organize incoming information. When a CFO or another stakeholder wants to obtain insight about a potential strategic shift, consolidation software may perform complex reporting tasks in a matter of minutes instead of hours or even days.
4. Efficiency isn't agility; agility leads to efficiency
Business agility is the ability of an organization to remain ready to adapt quickly to constantly shifting conditions. Aligning strategy with fluctuating costs, currencies, market demand and legal requirements leads to efficiencies that increase profitability. However, in pursuit of efficiency, some organizations inadvertently sacrifice business agility.
Companies that perform excessive human resource cutbacks to shore financial reports provide an example of efficiency at the expense of agility. Business may enjoy a brief boost, but at the expense of the organization's ability to commit talent and work hours for sudden opportunity. If the potential need to rehire exists, reports should reflect allocations necessary to do so, balancing efficiency with agility.
5. Maintain 360-degree view, including individual and group data
Employing software that allows you to quickly drill down from group data to individual transaction details helps to maintain a complete view when performing group consolidation tasks. Fast access to precise data while dealing with groups provides information for detail-oriented analysis. Perspective that combines micro and macro can lead to unexpected insight.
When dealing with systems that force controllers to dig through separate databases, or worse, through analog paperwork, the complexity of obtaining the details and correlating them with larger sets of data becomes cumbersome. Details integrated within a centralized enterprise database, accessed quickly, fosters business agility.
6. Automation frees time for decision-making
Tasks that don't require complex strategic reasoning will always be performed more efficiently by computers. In addition to processing data faster, computers eliminate human error when handling the information. As hardware and software improve, so do the number of tasks ready for automation.
The goal of automation is to increase productivity and time available for C-level decision-making support, ensuring fast, accurate reporting that leads to valuable insight. Resources formerly dedicated to nonautomated duties may be reallocated to support other areas of growth. There are aspects of business that remain beyond numbers, so automation should be considered along with intangibles when supporting decision-making.
7. Communicate with clarity and confidence
Dealing with financial and technical tasks occasionally steals focus away from the reason controllers consolidate, specifically, to communicate results and recommendations for all aspects of the business group. The time of CFOs and other stakeholders is always at a premium, and the fast pace of international business doesn't wait for broken communication chains to resolve.
Take the time to present data in an easy-to-digest manner, making use of visuals that draw attention to vital conclusions. If you're presenting an unpopular yet important opinion, do so with the confidence that your assertion is backed by high-quality data.
For companies seeking powerful, turnkey solutions, software such as Unit 4's consolidation solution assists the implementation of strategies and processes that maintain business agility.