As an IT professional, I’ve spent almost two decades providing businesses with technology solutions, such as business intelligence, forecasting, demand planning, strategy management, and financial budgeting. While each initiative delivers on its own merit, a much greater latent opportunity exists: the gap between Finance and Operations. In a three-part blog series, I’ll discuss why this is and what you can do to close this gap.
Most businesses work strategically to align Finance and Operations. However, Finance and Operations tend to frame business problems and opportunities with their own technology and terminology. As a result, the gap is reflected in the organisation’s structure, roles, processes, and lexicon. Working in silo, Finance leverages separate regimes in long, unpopular cycles of budgeting, while Sales and Operations end up addressing their planning needs alone. Demand and Supply rock back and forth volatilely, and Inventory sits like a patient waiting in triage.
Inevitably, this results in a disconnect between financial plans and operations. Business plans don’t reflect what’s happening on the ground and fall short when responding to changing market conditions. That’s not to say improvements don’t occur. Occasionally these perspectives come together in a strategic review or on the pages of an annual report, but they lack an integrated approach and enabling technology.
Organisations need to operate cross functionally to be able to identify new business opportunities, streamline operations, contribute to decision making, plan ahead and, most importantly, improve profitability. An integrated performance framework is key. Although the gap between Finance and Operations may seem unbridgeable at times, when understood and addressed well, the reward proves a massive dividend.
Read my next blog post to find out what the solution is to closing the gap and how this can benefit your business.