How Big-Picture Finance Solutions are Different & Better
How much attention do you pay to big-picture finance solutions for critical and day-to-day financial challenges? If you’re like many mid-sized business owners and CEOs, the answer is probably “not nearly enough.”
With countless priorities demanding attention – along with the occasional fire that has to put out – there is a temptation to resolve financial challenges quickly and move to the next task.
Band-Aid Fixes
Unfortunately, the consequences of failing to apply big-picture finance solutions can be drastic. For example, in the absence of big-picture solutions, companies often undertake quick, less expensive and less comprehensive “fixes” that do little more than place a band-aid on financial problems. Eventually, the band-aid falls off and the company is often left with bigger financial problems than it was facing originally.
Perhaps even more importantly, big-picture finance solutions add exceptional value across many areas – benefits that are lost when going with an expedient solution. Here’s another way to look at it: applying big-picture solutions is like playing chess and thinking 10 moves ahead. By contrast, going with expedient solutions is more like playing checkers and thinking about the next couple of moves.
Why are Big-Picture Finance Solutions Better?
Expedient solutions can be quick to implement, completed by resources with lower skill levels, and, in the short term, appear to be less expensive. But these sometimes attractive characteristics can negatively impact multiple areas down the road.
By contrast, big-picture finance solutions are implemented with a high-level and forward-thinking approach. This approach recognizes the interdependent nature of finance elements, as well as opportunities during implementation to positively impact current and future performance.
Essentially, big-picture finance solutions act as benchmarks that elements of a solution must satisfy. Here are examples of these benchmarks.
1. Management decision-making
One of the biggest benefits of big-picture solutions is the ability it gives managers to make better decisions. This is where the saying GIGO – or “garbage in, garbage out” – applies. When a solution is completed, associated data needs to be easy to grasp, accurate, timely and – most importantly – actionable. Better data leads to better decisions with regard to problem resolution and more favorable financial results.2. Continuous improvement
Solutions should incorporate built-in flexibility to support cost-effective expansion and enhancements. Without building in the potential for continuous improvement, you run the risk of solutions becoming obsolete and ineffective.3. High-level and long-term views
In developing and implementing a solution, you should be mindful of interconnected elements and factors that could influence solutions in the future. In other words, you should strive to “future-proof” your solutions to the greatest extent possible.4. Opportunities
It’s not unusual during implementation of a big-picture solution to identify one or more opportunities to cost-effectively realize significant additional value. In this way, the primary solution can be leveraged to increase ROI.5. Empowerment and education
You can’t achieve maximum value from solutions if employees aren’t educated about how to use them effectively and empowered to do so. A big-picture solution ensures employee empowerment and education to reduce costs and improve efficiencies.
Concluding Thoughts
If you’re like many mid-sized business owners, you probably don’t spend as much time thinking about big-picture finance solutions as you should. The consequences of failing to implement big-picture solutions can be drastic. Teaming with you as a part-time CFO or project CFO, a CFO partner from a local CFO services firm can help you realize the many financial and operational performance benefits of applying big-picture benchmarks to your challenges.
To learn more above how CFO Edge partners implement big-picture finance solutions, please visit the section on Eight Benchmarks on our website Solutions page.
Arthur F. Rothberg, Managing Director, CFO Edge, LLC
No Comments