Finance Capability Lead, Bluefin Solutions
Moving accountants to system analysts
11 Oct 2012
Finance, Business Intelligence (BI), ERP, ERP Finance, Profitability
There has been a real shift of power within finance organisations. Due to process and system efficiencies, the role of the Accountant has evolved. Historically the Accountant was there to record and reconcile financial data. These (low value - high volume tasks) have slowly been automated, removing the need for large armies of qualified Accountants to crunch figures. At the same time the size of organisations has grown, and with it, so has the volume of data.
What is expected of the "system analyst"?
I believe the new role requires three specific flavours which are:
- Spot trends
- Measure performance
- Identify risks
You have probably read this a hundred times already but business sentiment is moving at a pace like never before. As I write this today, the IMF has down-graded global growth again. These statistics seem to move dramatically every quarter. The same can be seen for organisations. Spotting trends, such as growth, hot products, poorly performing customer groups need to be performed frequently.
A simple example relates to a manufacturing client. Generally they will have hundreds of different products and will need future sales information to assist with the production forecasting of products. If the data is wrong the client will either be left with too much stock which will impact cash flow, or not enough stock which will impact sales and ultimately profit. The use of analytical tools enables these trends to be identified in a consistent manner.
Organisations are now aligned more to KPI's. By having a number of KPI's the success or measurement of them will provide a health check on the organisation. Setting a benchmark and measuring performance against the benchmark will provide early visibility as to the performance of the organisation and its future performance. Again this links in well to trends, as measuring performance allows remedial steps to resolve issues that could occur in the future.
Further to this, comparisons of business units, or product types, enables top performing units or products to be identified and invested in further. On the other end of the scale, units or products that do not perform as well can be analysed to resolve any potential issues. Using KPI's to measure the performance of business units or products will allow strong performing areas to coach the weaker areas to strengthen the organisation as a whole. The use of dashboard tools provides the system analysts a simple tool to track the performance based on a set of measures.
Where "actuals" and "budgets" align the need for further analysis is limited. Where a significant variance occurs between an actual and a budget further analysis is required. Some variances maybe positive, so having a higher revenue actual than the budgeted revenue normally is a good indicator. However there will be a risk associated to this. This could be due to the ability to meet future orders or the impact the extra revenue growth would have on the cash flow.
The ability to accurately tie up actual against budgets will improve the visibility of the performance of an organisation. As mentioned previously, business sentiment moves at a fast pace. In turn this leads to the requirement to have an Agile approach to budgeting and forecasting as the rationale used to create figures that are 6 months old may no longer be valid.
Where I am sitting this new type of role for the finance community is much more rewarding and value adding. Whilst ERP systems are important to record transactions, the real value for a finance department is found analysing data outside of ERP. Without ERP there would be no data to analyse, but once you have a stable platform the focus should change. There will always be a requirement to tidy up data within the system of record and to enhance the processes but the finance community can now start to add value by spotting trends, measuring performance and identify risks for the organisation.
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