Wfinally seem to be shaking away the anxieties tied to the 'Great Recession.' As we finish out 2014, even the hardest- hit countries in Europe are starting to feel bullish. Are concepts such as 'lean finance' still relevant as world economies continue to improve? The simple reply is yes, but with a different twist than pure cost reduction to survive an economic downturn. Getting lean is more than just shedding a few pounds of extra weight--it's about getting fit, and being fit means being faster to the market, with more agility and greater insight than the competition.
A lean finance organization accomplishes all of these goals. Getting really fit means establishing common end-to-end process, technology, data and organization models--all the underpinnings of a successful lean finance organization.
Lean Finance: Foundation for Success
Across the globe, the finance teams providing the most value are those that offer high-quality analysis and advice that contribute to better performance. Of course, finance teams cannot expect to boost their value overnight. Effective business support needs to spring from a strong foundation, and finance functions need to get the basics right. Until they do, they will not have strong enough footing to offer credible insight and analysis at the upper end.
This is where lean finance comes in. Under these principles, finance teams focus on improving the efficiency and effectiveness of their core activities to enable reliable data streams, uniform reporting standards, and optimized finance processes and technology infrastructure. Finance functions can then harness the resulting gains in quality and efficiency to improve the range, timeliness and integrity of their strategic business support. In short, lean finance involves simplifying, streamlining and harmonizing essential finance processes to create a leaner, more agile finance operation.
How important are embracing and adopting lean finance principles and capabilities to your organization? Percentage of high performers who answered "extremely important"
Highly optimized finance process
Underlying finance IT system and applications
Use of global shared services
Use of global outsourcing
Use of data analytics
Finance staff talent
End-to-end process management
Global finance operations and functions
Source: KPMG International CFO survey 2013
Benefits Beyond Reduced Costs
The 2008 financial crisis has already caused many finance functions to embrace lean principles...