Value of connection - A Canadian perspective

Overall, when compared to their global counterparts, Canadian respondents indicate a stronger interconnectedness in several business processes that span finance and operations, particularly in inventory management (84%) and integrated business planning (80%). However, they’re not as “satisfied” with how that connectedness happens. 

For example, they’re not satisfied with how information is shared between the two functions. Overall, they feel that their alignment of objectives could be better; only 32% are “very satisfied” with their Key Performance Indicators (KPIs). And they’re not satisfied with the ability of Technology Systems (I.T.) to interface between finance and operations; payment systems such as procure-to-pay and quote-to-cash seem to be the least connected. 

Finance and operations teams in Canadian organizations tend to be smaller in scale, allowing them to communicate regularly, which could be why they feel a stronger sense of interconnectedness than many of their larger global counterparts. But technology and data remain siloed, which could explain why they’re not satisfied with how that interconnectedness happens. This appears to be the case across Finance, Operations, Supply Chain, and Procurement functions. 

With many complex elements in the operations and procurement functions such as order-to-cash, data may pass hands hundreds of times. As a result, ensuring the quality of master data requires the institutionalization of procurement around finance and operations—making it harder to share information or integrate IT systems. Unified KPIs could potentially help these functional align their objectives and streamline data-sharing capabilities, ultimately improving how that interconnectedness happens across the organization. 

Canadian finance and operations leaders who want to drive growth find it challenging to support enterprise-wide transformation while trying to fulfill their traditional duties. They’re also lagging in current practices related to enterprise-wide transformation—only 40% of finance respondents and 25% of operations respondents believe they “proactively support business transformation”. 

The reason for this lag could be attributed, in part, to a lack of customer-centricity. In Canada, many companies are still struggling to be truly customer-centric in how they plan strategically and operate. There’s a lack of appetite for end-to-end transformation, which could potentially be correlated to a company-centric culture that favours the company over the customer. 

Yet the global survey indicates that developing personalized customer experiences is a critical manner in which finance and operations (including supply chain and procurement) teams can contribute to transformation—but both teams must work together to make this a success. As they continue their journey toward connectedness, Canadian organizations can create and preserve more value by starting with the customer—rather than their mandate or vision—and working their way back to anchor strategic imperatives. 

For example, if the starting point is creating more personalized customer experiences, the finance function needs to work alongside marketing and product development to understand how those experiences can be personalized (and what the financial impact would be). In turn, operations and product teams need to understand how to make those changes.

Innovation is often synonymous with technology, which is why many Canadian organizations are disappointed after they roll out a new technology solution. It’s possible to innovate without technology, simply by doing things differently and taking a customer-centric approach focusing on process and data. Technology is an enabler, but it should be viewed as such rather than as a silver bullet. 

Data is the lifeblood of any business, and data housed in finance and operations systems is vital to informing customer-centric business transformation. But at the heart of most failed transformation programs is an inability to wrangle the right data—not a failure of the technology itself. 

Leveraging data is a challenge globally. Canadian finance and operations teams, in particular, feel data could be used more proficiently in business processes, especially business planning, performance management and payment processes. 

To do this, finance and operations teams require rapid access to each other’s data—which in most cases isn’t happening, according to our survey results. This could be achieved through better access to data analytics, automation of certain data processes and increased collaboration between functions. 

Rather than applying the same standard across all data, leaders need to understand their objectives: What business outcomes am I looking for? How will I measure that? How do I get data to support that? Selecting the ‘right’ technology won’t amount to much if it isn’t properly configured, implemented and leveraged to clearly meet business requirements and objectives set from a customer-centric vision.

The priorities of Canadian C-1 level management are generally not aligned with C-level and senior management, according to our survey results. While C-1 level management is focused on cutting costs and driving efficiencies, C-level and senior management are focused on innovating the operating model and improving the quality of external stakeholder experiences. 

 Generally, Canadian leaders feel they lack an understanding of the performance of other business functions. Less than 40% of businesses are “very satisfied” with multiple aspects of planning and execution, from gaining visibility into their value chain (37%) to using data to align strategic business goals with financial and operational plans (31%). Understanding the performance of other business functions in relation to planning and execution is a potential improvement area. 

 There’s also pressure on C-suite executives to accomplish business transformation goals in a short timeframe—knowing that perhaps two years down the road they won’t be in that chair anymore. Cutting costs may result in a quick ‘win,’ but it comes at the expense of more sustainable, longer-term solutions that take into account a holistic view of the impact on customers and employees. 

 Canadian companies can better align across management levels and departments by looking beyond cost-cutting. Too often, there’s a singular focus on cost, particularly in the current economic climate. That means the strategic planning process is not integrated with the business planning process—which often results in poor morale. Instead, leaders can view cost-cutting through a different lens, such as making the business more cost-efficient through business growth initiatives or improving the customer and/or employee experience. 

In Canada, CFOs are most likely to make technology investment decisions within the finance function, while CTOs are more likely to have the final say in operations. But both approaches affect the greater connectivity of organizations. Instead, leaders must think beyond their ‘function’ to consider the impacts and ramifications of decisions across all functions—as well as internal and external stakeholders.

Collaboration goes beyond coordinating with other functions when acquiring new technology. It also requires a healthy relationship among functions and open and honest dialogue between leaders to create a truly connected enterprise. Lack of collaboration leads to sub-optimal decision-making and inefficient resource allocation, but it also slows business transformation and can even weaken customer experiences.

The benefits of connectedness are many: from maximizing the value of data and aligning KPIs to drive performance, to fortifying risk resilience and unleashing enterprise-wide transformation. There are many opportunities for finance and operations teams to drive transformation—but only if they work together to execute them.