When a racecar driver revs the engine, there is a special relationship between man and machine that can’t be expressed in numbers. As a leader of a high performance organization, imagine feeling that way about your management system as it empowers the entire organization and drives high performance.
Unfortunately, most leaders experience an altogether different feeling once they realize the abundance of hidden taxes they're paying for broken processes and outmoded applications that add to costly mistakes.
Identifying Hidden Taxes
Up to 90% of business performance is lost to hidden taxes. One more time: Up to 90% of business performance is lost to hidden taxes. Yes, that statement bears repeating.
Companies don't realize the aggregation of hidden taxes. More importantly, they don't understand the impact these hidden taxes have on their financial picture. Broken processes, budgeting chaos, inflexible and cumbersome planning tools all result in extra manpower, increased payroll, drawn-out financial reconciliations and data integrity issues.
- Productivity tax. Insecure methods of data management and data dumps result in productivity taxes.
- Technology tax. The IT department is almost always involved and tasked with answering a plethora of questions.
- Confidence tax. Because the analysts receive a subset of information that is not real-time, it's predictable that leadership loses trust in the validity of data collection.
- Responsiveness tax. Inflexible systems, lost opportunities and late nights reentering data all add up to lost opportunity and added costs.
Dispelling the Facts
Here are some of the fundamental challenges to driving high performance:
- 50% of Finance functions have reporting processes that rely on manual spreadsheet manipulation
- 88% of spreadsheets have errors
- It takes on average 103 days to complete the annual Budget process
- 17% of companies have a self-service reporting capability
- Less than 10% of firms have a mature Balanced Scorecard
- 72% of Finance functions don’t have a single database to satisfy reporting requirements
- Only 18% of firms have a performance improvement team
- Only 45% of Finance teams believe their forecasts are accurate
- Only 6% of Finance leaders are comfortable with the state of their current finance technology
The solution to eliminating hidden taxes and conquering the fundamental challenges is a simple one: purchase a business performance management system that integrates with your ERP so that reporting, planning and analyzing all happens in real-time. A system that can do this can drive high performance.
As the leader of a high performance organization, there are critical numbers that you want to know and responsiveness you wish to trust. Download our Driving a High Performance Organization to learn more about hidden taxes of broken finance processes.