Financial management is essential to a business’s health from the very beginning. There is no way a business will ever perform at its optimum level if the finances aren’t managed properly and, in many cases, poor financial management eventually leads to a business’s collapse. Fortunately there are many tools out there to help keep a company’s finances on track and create sustainable growth. Balancing the books, budgeting, and good cash flow all play an important part. Every company, of course, will have to set specific goals based on their individual needs, but there’s some holistic goals and strategies that all businesses can take a look at when looking to transform their finances, according to marketing experts at PWC.
Switch from Strategic Planning to Bayesian Strategy
The world is simply moving too quickly for businesses to continue following the same scheme of corporate strategic planning. While businesses once could first take the time to formulate a plan and then enact it, these days extensive strategic planning is virtually impossible. There’s too much information to gather and analyze before making any kind of plan and coming to a consensus on it. That’s why switching to a Bayesian strategy is more useful, according to Greg Satell, a contributor to Forbes. It’s an attempt to get things ‘less wrong over time’ as opposed to ‘getting it right.’ This approach means switching from assets and capabilities to connections and access, forging networks that can adapt in real time.
Focus on Technology
There is no leaving technology out of any type of business anymore and enabling technology is one of the key factors in making a successful financial transformation. When it comes to technology the focus should be on creating fully integrated systems that allows the company to share information seamlessly. A company should work to standardize and simplify system performance, embedded application controls, as well as governance and data management through the help of project management software, according to Daptiv.
Process and Performance Management
Keeping track of processes and performance are absolutely essential to making improvements. A company should make sure to focus on planning and decision-making rather than transactional processing or data manipulation. Scorecards and balanced metrics should be connected to the overall enterprise-level strategic goals to create continual improvement. Standardizing reporting formats, definitions and forecasting processes all play a part.
Semantic Economy Instead of Scale Economy
Scale economies used to be the traditional way of getting access to suppliers, customers, and markets. This model of business is moving rapidly towards a semantic economy where what is owned comes backseat to what can be accessed. Technology and the new industrial revolution have moved business into the cloud and here connected individuals and companies can leverage manufacturing, finance, marketing, and super-computing resources. Networking organizations is now the key to success.
Managing People Effectively
Just because technology has become a key to success across industry, doesn’t mean that people can be ignored. Managing people effectively involves creating clear, well-defined roles and responsibilities that are aligned according to the skill sets of the people. Tracking the performance of individuals and sharing services and knowledge between all levels of the company is essential to keeping people organized and working effectively. Keeping track of performance will also reveal if there’s any redundancy that should be removed or tasks that would be more appropriately outsourced.