I have seen several problems arise from the best of intentions. A request is made of IT from a member of the organization to modify a program or create a report to help solve a problem. Unfortunately, such changes, when made by IT without input from Finance, can lead to unanticipated consequences, such as modification to reports used by others or changes to processes that lead to breaches in internal control or transaction reporting of the company.
To avoid such problems, successful project management requires collaborative partnership between IT and Finance and an understanding of the highest and best use of their skills to define roles and responsibilities within the organization, specifically in relationship to initiatives surrounding information systems.
For most small to medium sized companies, it is an unaffordable luxury to have an internal team dedicated to business process and improvements. Instead, the vetting of ideas, formulation of plans and implantation of approved initiatives that relate to the collection, storage and reporting of data generally fall on the IT and Finance personnel.
Structuring an efficient workflow between Finance and IT
The Finance team serves as Data Managers (the Nervous System of the organization). As the stewards of all financial information, there are fundamental responsibilities inherent in all Finance departments:
• Assembling and validating financial information (actual and budgeted), and communicating such information to management and decision-makers, enabling them to make informed business decisions and appropriately apply resources where needed.
• Installation, approval, management and maintenance of all processes and related data that impact the recording of transactions that culminates in journals, sales and financial reporting.
• Ensuring data integrity, adequate internal controls and segregation of duties are sufficient to safeguard the assets of the organization to prevent unauthorized or erroneous transactions from occurring.
"Proper planning for how the data will be queried will lead to the proper data integrity testing"
This provides a frame of reference for how best to insert Finance into the process of technological change management. By serving as the Data Manager, they should be called to identify and collect the necessary data to satisfy the company reporting needs. Effective data management will include organizing data in such a way as to be easily accessible by others in the organization. Furthermore, there should be a systematic review of stored data for integrity (i.e., Kansas City is spelled consistently vs. KansasCity, Kansas Cty or KC). Proper planning for how the data will be queried will lead to the proper data integrity testing. Clean data is crucial for efficient use in data extraction and analysis. Finance must create periodic reviews to maintain this integrity.
IT serves as Technology Managers (the Skeletal System of the organization).
Similar to Finance, there are fundamental responsibilities of an IT department:
• Managing computer-based information systems, particularly software applications and computer hardware.
• Serving as the repository for all requests for additions, removal, replacement and modification of software programs.
• Designing, developing and implementing changes required to such computer-based information systems as a result of appropriately approved initiatives.
This is where a strong link is required between IT and Finance. When asked for assistance or to make software changes, IT needs to review these requests with Finance to ensure that resources are properly applied, controls inserted and impact-to-transaction reporting evaluated prior to executing any changes. While IT is not required to evaluate the cost/benefit of software changes, they do ensure that proper management authorization has occurred, develop an understanding of the rationale and goals of any changes and suggest alternatives when necessary or when the resources needed to accomplish the task are burdensome. Lastly, by collaboration with Finance, IT gains the understanding of data retention and integrity requirements.
Company culture fosters effective change management
Finance and IT are not solely responsible for successful process improvement, as they require the involvement of subject matter experts from throughout the company. However, the organization’s management philosophy needs to nurture collaboration. Successful environments usually include many of the following characteristics:
• A culture of quantitative decision making that minimizes subjective-based results.
• Management treats process as a religion. All employees understand what is expected of them and how their work impacts others. A team member is less apt to “go rogue” if he/ she realizes that there is a planned workflow that is dependent upon diligent execution of job responsibilities.
• Process improvement teams avoid managing to exceptions. No system can be all things to all people. Service to internal and external customers is always desired, but simplicity of design is preferred. Unless a solid business reason exists, standardization is more efficient and less costly.
• Process improvement must lead to value added or information used in decision making. A pragmatic evaluation of purpose and usefulness of change request results is fully vetted. Rationale for a change request of “I need to see the data” requires a reply of “How will you use the data/report?”
• Although input from all departments in the organization is needed, effective teams limit the number of decision-makers to two or three individuals. Brainstorming sessions can include many participants, but only a few key, experienced leaders are required for nimble decision making, preventing the team from getting bogged down.
In summary, efficient changes to information based systems work best when companies leverage Finance’s expertise in managing data integrity and process with IT’s expertise in efficient database system architecture and design (as shown below). As with any collaborative effort, this partnership depends on effective communication between the two departments and others in the organization.