More about the high-maturity for business processes: Certain distilled practi...
Article in CFO India Jan17 by Phani
1. Expert View
Sustainable Value Creation
January 2017 | CFO india | 37
V
alue Creation:
An art or
science or a
process?
Value can be defined
as an enhancement in process/activity
by a concerted effort which leads to a
clear improvement in the way things are
done and helps in achieving/obtaining
definite results in an efficient, effective
and timely manner. Every finance profes-
sional associated with a responsible role
should think in terms of “how can we do
something better with existing resources
or how can we do the same thing with
less resources”. This thought process
itself leads to finding various options and
alternatives which when implemented
results in creation of incremental value.
For example, reduction in cycle time
in invoice generation is possible by
understanding the stages involved in
the process (right from data extraction,
validation, business approval, sending
to finance, generation of invoice) and
implementing an SLA driven system for
CONTROL AT SOURCE:
THE ESSENCE OF
VALUE Creation
Sustainable Value Creation is a long-term strategy and
implementation of well thought and defined cross-functional
processes embedded with high quality information source
control is the essential backbone of that creation.
Phani Kiran Karra
2. Expert View
38 | CFO india | January 2017
each value added stage of activity. Solu-
tions can range from email approvals,
digital signing of invoices, adherence to
pre-established checks and controls, etc.
This focused approach definitely results
in a reduction in cycle time which creates
an incremental value.
Information Flow/
Duplication of effort
In any organization, majority of the
time, information gets generated from
multiple sources and travels across the
organization. During this process, the
information is utilized by multiple teams
for performing various analytical works.
Where there are dependencies for
information across teams, it should be
the endeavour of all teams to work on
standardized templates for capturing
and sharing of information. If, at the
source level, all relevant information is
captured and a database is maintained,
it helps in utilization of same set of
data across multiple functional streams
while avoiding or minimizing data
errors, duplicity of data, and re-working
of same data for multiple recipients.
Bottleneck management is the mantra:
Identify pain points and information
bottlenecks, and get rid of the same by
following principles of information auto-
mation and standardization.
Seamless Integration
of Work flows/Use of
Technology tools
Synchronized integration of information
and work flows across the organization is
an essential success ingredient in major-
ity of successful companies. Companies
take a lot of pain and use best tech-
nologies available to establish processes
which capture authentic data at source
and ensure seamless integration and
dissemination of this information across
the organization. Technology is playing a
pivotal role in helping companies achieve
this transformation and use of technol-
ogy has definitely become a best practice
in the pursuit of organizational goals.
To quote Robert McDowell, “Technol-
ogy provides no benefits on its own; it is
the application of technology to business
opportunities that provide ROI” and thus
create sustainable value.
Conflict Management
Medium to large sized organizations
employ thousands of people and work on
multiple projects with various stakehold-
ers. Different projects will be executed
simultaneously and there may be overlap
of teams and information further putting
pressure on the time-lines. It is inevitable
that these kinds of environments trigger
a variety of conflicts amongst different
team members. Conflicts can pertain to
quality of information, timely informa-
tion, missing deadlines, not adhering to
commitments, customer dissatisfaction,
blame games, negative perceptions, proj-
ect delays, multiple follow-ups, etc.
In general, people do not pay much
attention to creating a better harmoni-
ous work environment to eliminate or
minimize the conflicts that arise from
time to time. Simple reason for the
same is lack of ownership, accountabili-
ty and responsibility. In a sense, this per-
spective is also correct because majority
of the people think that they are just
trying to do their job and someone else
is interfering or not working properly
which gives rises to a conflict.
There are two effective solutions to
tackle this issue at source. 1) Make
conflict resolution and management
as part of the key people’s KRA and
incentivize them for the same; 2) Create
mini conflict management cells com-
prising three–five key skilled stakehold-
ers whose additional responsibilities
include identifying and resolution of
conflicts as and when they arise in a
timely and amicable manner and set
proactive benchmarks across teams for
management of conflicts with an overall
objective to avoid conflicts completely.
Quality, Efficiency,
Effectiveness &
Timeliness
The essence of control at source gains
importance when viewed from the
“Companies that solely focus on
competition will ultimately die. Those
that focus on value creation will thrive.”
— Edward De Bono
“Innovation
is change
that unlocks
new value.”
— Jamie Notter
“The Strength of the team is each
individual member. The strength of
each member is the team.”
— Phil Jackson
“Technology provides no
benefits on its own; it is the
application of technology
to business opportunities
that provide ROI” and thus
create sustainable value.
— Robert McDowell
3. Expert View
January 2017 | CFO india | 39
perspectives of completing an activity
efficiently (using a right method) and
effectively (doing the right activity) with
utmost quality within a given time-frame.
Any one donning a thinking cap and ask-
ing these basic questions and structuring
his/her work around these principles can
become a skilled differentiator at work
place and will accomplish given targets
successfully. In the process, he/she can
set internal benchmarks which can be
replicated by other team members. This
further helps in alignment of functional
and cross-functional goals with broader
organization objectives.
Communication,
Cohesiveness and
Collaboration
In general, at workplaces, many factors
contribute to both efficiencies and also
inefficiencies. Communication and per-
ception are two such factors which play a
pivotal role in determining how efficient-
ly or otherwise, teams are functioning.
Lack of clear and timely communica-
tion is the essential root cause of all sorts
of problems plaguing both functional
and cross-functional teams in any orga-
nization. On top of that, we humans are
extremely adept at forming judgements,
perceptions and then conclusions in our
mind and acting on those perceptions
rather than the reality.It is this perceived
reality rather than the actual reality and
the ego associated with it, which is the
root cause of all communication issues
and the inefficiencies associated with it.
The simplest of the solutions to over-
come these problems to a large extent is
to establish a mini core cell comprising
of few of the cross-functional leads who
set out guidelines for intra and inter
team communications, regularly inter-
act with all the teams apprising them of
the dos and donts, monitor the health
of all interactions and conversations
across teams and continuously take
feedback and improve the guidelines
and ensure an all-round quality of com-
munication across the organization.
This kind of collaborative effort to
streamline quality of communication
across teams in an organization will
bring about a kind of cohesiveness which
can strip away layers of inefficiencies
and bring speed and efficiency across
all types of work. Focus will shift from
blame games to problem solving and
closure of issues. Synergies will be
harbored based on alignment of team
strengths. This in turn will raise the
competency bar and further motivate
teams to work together. This is how real
internal value can be generated.
Conclusion
Hence, it can be concluded that estab-
lishing controls at source of information
or first level of inputs, while minimizing
if not eliminating, duplicity of informa-
tion and maintaining seamless flow of
information through standardization of
templates and reports, can go a long way
in bringing efficiencies at the workplace.
These controls together with collabora-
tive effort of various teams will enhance
the quality and effectiveness of the flow
of information which can substantially
help in timely and effective decision-
making across the organization.
About the Author: Mr
Phani Kiran Karra
is Head, Finance
at Verse Innovation
Private Limited
Virtual
Reality
Actual
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Reality
Perceived vs
Actual Reality
Vendor Code
Creation
Master
Database
Bank
Submission
Invoice
Tracker
Invoice
Approval
Accounting
Finace
Submission
Payment
Scheduling
Payment
Advices
Automation of Vendor cycle management both in an ERP and non ERP environment by
capturing right and relevant information at source and utilizing standardized formats
and work-flows at each stage to drive the process smoothly.
Vendor Cycle Management