Lean in Finance

Published date01 March 2015
Date01 March 2015
© 2015 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI 10.1002/jcaf.22030
Kevin Dilton-Hill
Lean has been successfully adapted to meet the
challenges of finance and accounting processes.
This article distinguishes Lean from Six Sigma,
showing why Lean does not translate directly from
the factory floor to Finance. It then explains key
Lean methods to identify what Finance custom-
ers want, and then links this directly into process
design and performance measures. The result
can be eliminated errors and better control risk
in processes. The articles finishes by outlining an
approach to Lean projects. © 2015 Wiley Periodicals, Inc.
L ean in Finance
Lean is now a key
part of any pro-
gram for Finance
Transformation. Lean
provides the resource
savings to invest in
improvements and to
fund the transforma-
tion program. Lean
identifies where pro-
cess improvements can
be made to do things
better, quicker, and
cheaper: That’s right:
Lean can deliver on all
these at the same time.
Exhibit 1 summarizes the
Lean improvement work the
author was involved in at a large
multinational bank. We identified
opportunities to reduce the time
taken to produce quarterly, half-
year, and year-end stockholder
reports by 38%. We identified
five key initiatives that could be
implemented in a 6- to 9-month
time frame, and none of it
involved any significant change
in information technology (IT).
These were not “consultant”
opportunities; these were oppor-
tunities that the people involved
in the process and their manage-
ment accepted as part of their
objectives for the coming year,
and ultimately delivered. This
involvement of the people who
actually perform the process is
one of the fundamental prin-
ciples of Lean.
This article looks at what it
takes to deliver these kinds of
benefits, including:
How Lean achieves its
Key Lean tools, methods,
and mind-set; and
What an effective Lean proj-
ect looks like.
The article starts by contrast-
ing Lean and Six Sigma and then
considers why Lean sometimes
does not appear to work in
Finance. It also takes you through
a case study demonstrating
what happens in a
Lean project.
Lean has often
been grouped with
Six Sigma as a single
set of tools. And
while a pragmatic
approach is to use
whatever tool suits
the circumstances,
Lean and Six Sigma
have very different mind-sets.
Exhibit 2 summarizes the two
approaches. It may seem arcane
to worry about the differences,
but the real implication is in
the mind-sets—the approach
to what they do. Six Sigma
spends a considerable amount
of time measuring before start-
ing improvements. Lean relies
on observation and inquiry and
starts improvements almost
In many organizations, the
Lean initiative starts on the fac-
tory floor and then migrates into
transactional processes such as
“procure to pay” and “order

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT