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3 Key Success Strategies for Insurance, Banks, and Financial Services
Success Strategy is also known as :
success strategy,
key success strategies,
key benefits,
key benefits strategies,
proven success strategies,
business success strategy index,
business success strategy,
success strategy index,
strategy metrics of success,
learning strategies ,
learning strategies for success,
Also stood for:
strategy paradox.
Mid- to enterprise-sized insurance, banking, and financial services
organizations are always looking for different ways to improve their business
processes in order to implement tighter controls and improve the bottom line.
But the question is not "what's broken?" After all, with the advent of
enterprise systems, there's not much room for a broken business process to hide.
The real question is "what haven't you done already?" Where in the
organization have you not looked to for improvement?
The fact is, insurance, banking, and financial services organizations that
are hampered by inflexible and inefficient back-office operations struggle to
recognize and take advantage of increased efficiencies.
More specifically, here's where you'll find room for improved efficiency:
- implementation of financial controls
- financial and operational reporting and analytics
- accounting functions (including cost allocations, consolidation,
purchasing, payables, and project controls)
In fact, automation of core accounting processes brings about three key
strategic benefits that chief financial officers (CFOs), financial managers, and
comptrollers can leverage to meet this challenge:
- improved resource allocation and use
- full visibility into and control over processes and data
- ability to easily adapt to significant events (such as mergers and
acquisitions) and changes
We'll explore these three points in detail later on, but for now it's worth
calling out the problem that underscores these benefits: All too often,
back-office functions are mired in inflexibility and task duplication. For many
insurance, banking, and financial services organizations, this is the result of
relegating back-office functions to back-of-mind.
However, insight into information, processes, and events can be one of your
most powerful assets. And the ultimate way to success? Bringing back-office
insight to front-of-mind.
Let's turn now to the three key success strategies for tighter controls and
an improved bottom line.
Success Strategy
1:
Improving Use and Allocation of Resources
The Context
Ask any CFO, financial manager, or comptroller to point to the prime cause of
operational inefficiency, and they'll tell you it's unnecessary duplication of
effort in other words, entering the same data into multiple, disparate systems
(such as purchasing, accounts payable, etc).
Inevitably, these separate systems lead to a lack of process coordination
across departments, maintenance of duplicate data, and users who are relegated
to using ungainly spreadsheets to reconcile and report across the separate
systems.
Such inefficiencies can make month-end closings a real headache, with
accurate information needing to be wrested from your front-office systems into
your accounting packages (back-office systems); from your order management
applications into accounts receivable; from purchasing into accounts payable &8230;
Inefficiencies such as these not only open the door to increased errors, they
also lead to the loss of valuable time, as you sift through and attempt to
reconcile disparate information.
The Fix
So, you've got one system to handle X, and others to handle Y and Z. The
problem is, these systems don't necessarily know how to talk to one another.
You can reduce the need for manual intervention and awkward data
reconciliation efforts by ensuring users have access to a unified view of data.
One approach is to integrate systems by unifying disparate data with
service-oriented architecture (SOA)'based applications.
SOA is an IT infrastructure that enables seamless integration between
disparate systems. SOAbased applications help you automate data validation
throughout multiple systems, thus enabling you to reduce the inefficiencies
associated with duplicate data entry and processing.
One of the key benefits of SOA is that it allows you to integrate business
processes and systems without having to recode after upgrades or patches. This
is vital for any organization with mission-critical solutions already in place,
and can be a determining factor when selecting a new application.
Note that nonintegrated systems can penalize your organization by making it
more difficult to share information between applications (meaning that the
likelihood of errors increases).
Another headache faced by many CFOs, financial managers, and comptrollers is
the prospect of a looming audit, whether for compliance to the
Sarbanes-Oxley
Act (SOX), or to any other regulatory compliance effort. Integrated systems can
help you address such issues, not only by reducing manual intervention, but also
by allowing you to implement tighter controls to ensure that important data
isn't modified.
The Key Benefits
- elimination of errors introduced through duplicate data entry and
processing
- automated SOX controls
- the ability to reallocate human resources previously devoted to
intensive duplicative efforts
Success Strategy
2:
Gaining Full Visibility into Processes and Data
The Context
Are all your budgeting, reporting, transaction, and security controls in
place? If you're not sure, you may be missing information that you can't afford
to miss:
&8226;trends or business opportunities, such as volume discounts
&8226;potential
liabilities, including missed invoices
&8226;fraudulent activity, such as
embezzlement
There's no easy way of calculating the aggregate cost of these missed
opportunities or potential liabilities, since you may already be devoting
valuable resources to catching them before the fact.
However, these resources can almost certainly be better deployed elsewhere
(see Success Strategy
1). The point is, for visibility into processes and data,
you require systems to provide alerts that function as an extra pair of eyes,
allowing you to track, monitor, and react to events as they occur and when
necessary, before they occur.
Again, achieving this 20/20 vision can be enormously challenging because of
the need to merge disparate data from a variety of information systems.
In consolidating this data, it's important that you be able to access this
data quickly and in a recognizable format.
Hints and Tips for Finding the Right Financial Accounting System
- The ability to meet the specific requirements of your organization is a
must-have. While there's something to be said for the "boxed best practices"
of tier-one enterprise software, bear in mind that if an application has
been developed to offer "something for everyone," implementing it often
results in perilous and costly customization efforts.
Your selected
software vendor should demonstrate in-depth knowledge of your industry, your
requirements, and your particular business needs.
If you're looking for
vendors that address the particular challenges of insurance, banks, and
financial services companies, there are a number of solutions that have
focused on domain expertise rather than a one-size-fits-all approach.
Examples include the FlexiFinancials Suite from Flexi Software, Epicor for
Financial Services, and Prospero from Sage.
- When adopting any new enterprise application, one of the keys to success
is user buy-in. Minimize user workarounds by ensuring that your new system
provides the right data to the right people via the right processes.
- The benefit of implementing any enterprise software application is not
simply that you are automating your business processes, but that it forces
you to examine how and why you do what you do. When embarking on a software
selection project, you should map out your existing business processes to
ensure they are optimally suited to real-life requirements. Warning: this is
a time-consuming and painstaking process. However, giving this step its due
will reduce your chances of selecting an unsuitable system and increase your
prospects of implementation success.
Here's a litmus test that will help you determine whether you've got blind
spots you need to overcome:
- Can you easily integrate the operational and IT systems resulting from
organizational mergers or acquisitions?
- Can you search analytics data across your enterprise platform?
- Can you easily generate reports without additional IT resources?
The Fix
You can eliminate these blind spots by implementing systems that provide
access to the information you need and that allow you to drill down to the depth
you need. They should also provide you with complete control over critical data
and processes (including security rules, solid reporting capabilities, and
audit trails).
Your applications must also be capable of acting as an extra set of eyes,
alerting you to business opportunities as they arise and allowing you to quickly
react.
The Key Benefits
- streamlined business processes
- reduced exposure to fraudulent activity
- enhanced capacity to track, monitor, and react
Success Strategy
3:
Increasing Your Ability to Adapt to Change without
Having to Change Your System
The Context
In a volatile market, organizations must be poised to face change and respond
effectively. Because of increased volatility, the possibility of significant,
business-changing events is also more likely.
Are you adequately poised to respond to opportunities for new product
offerings? Will you be able to react to changes in your business model? To the
potential for mergers and acquisitions?
During these times, it's important that you have a system that is flexible
enough to grow and adapt as your organization requires. After all, the last
thing you want to be worrying about in a time of change is whether or not your
systems are doing what they're supposed to do.
The Fix
To provide a solid foundation for adaptability, you require applications that
respond flexibly to changes, as well as to subsequent strategic and operational
shifts not only in their capacity to scale and adapt to shifting requirements,
but also in their ability to seamlessly integrate with other solutions.
The Key Benefit
- the ability to react, adapt, and perform as needed in the face of change
Converting Strategy into Action: Bringing Back-office Insight to
Front-of-mind
Insight can be one of your most powerful assets. However, achieving insight
and acting on insight are two different things.
That's why any improvement in back-office processes must result in actionable
information, with the right information getting to the right people at the right
time.
For CFOs, financial managers, and comptrollers, this means having the tools
and information necessary for proactive measures (to prevent and mitigate
business challenges and risks), as well as for timely response to business
opportunities.
Are you on the right track? Find out by answering the four questions below.
- Do you have visibility into the financial data you need to see, when you
need to see it?
- Do you have automated controls in place to handle your regulatory
compliance efforts?
- Are you confident in your system's ability to detect internal fraud or
theft?
- Does your system have the flexibility to easily adjust to change?
If you answered "no" to any of these questions, there's room for
improvement and you can start by making sure your back office processes are
providing you with insight rather than hindsight. After all, even 20/20 vision
is useless if it's already too late for you to act.
By David Clark and Jane Aleck,
Technology Evaluation Centers