I’ve written about the opportunities for the government back office to become a Center of Innovation—including how that might look for the people function. Now I’d like to dive a bit deeper into the possibilities for another key back-office function: finance.
Finance is all about numbers, right? Tracking and processing transactions. Generating reports. Ensuring that no one is breaking the rules. Shifting away from those age-old activities may sound ridiculous (if not downright risky!). But when I suggest that finance can become a Center of Innovation, I’m not suggesting that finance teams abandon these essential activities. Rather, I’m suggesting that they embrace their true mission: to create a performance-focused organization that is financially sustainable.
While finance will always measure what’s happened and predict what might happen next, it should also support government’s most strategic goals. In other words, its role is not just to count the funding; it’s also to make the funding count.
Meeting that mission requires a mindset of performance (“doing the right things”) over control (“doing things right”). That’s a shift that is well underway in Fulton County, Georgia, which has built a county-wide strategic plan and is aligning everything it does to support six key goals. That includes redesigning the budget process to shift from paying for costs to investing in outcomes.
Creating a performance-focused organization that is financially sustainable also requires a rethink of finance’s relationship with IT. Boundaries are already blurring in the private sector, where a growing number of CFOs aren’t waiting for their more technical counterparts to drive digital adoption. As one senior financial executive told CFO Magazine: “Finance is IT. They are no longer separate items. Without IT you can’t do finance.”
The Accenture Strategy study, “CFOs Are the New Digital Apostles,” shows that one in four companies are realizing greater-than-expected returns from digital. What’s more, a whopping 82 percent are seeing measurable business return on investment (ROI) from digital finance investments.
As private sector CFOs focus on the quest for profit and shareholder value, finance leaders in the government back office can apply many of the same approaches and technologies to generate other types of “returns.” Chief among them: Improved speed and visibility. Enhanced analytics for measuring and improving performance by agency or across the government enterprise. And, ultimately, more effective use of always-constrained taxpayer funding.
Speaking of more effective use of limited funds, procurement can also play a key role in the Government Back Office Center of Innovation, and we’ll look at how and why next. In the meantime, please continue to leave your comments, thoughts, and suggestions at the bottom of this blog. To learn more about how to bring the back office to the forefront of government innovation visit us here, and follow me on LinkedIn and Twitter.
See this post on LinkedIn: Measuring and Driving Performance: Finance as a Center of Innovation