Increasingly complicated and demanding operating environment, along with recent regulatory trends have nowadays shifted the focus to compliance, resulting in a growing imbalance between compliance and performance and business objectives. Impacts from these imbalances include:
- Cost
- High costs of addressing increasing complexity and volume of rules and regulations
- Eventual inefficiencies in the finance function
- Quality
- Differences between internal and external reporting
- More room for error due to manual workarounds
- Deficiencies in financial and management reporting after corporate transactions
- Lack of transparency
- Speed
- Difficulty in meeting reporting deadlines
- Slower closing and consolidation processes
- Little time available for analysis
- Compliance
- Difficulty coping with regulatory reporting requirements on an ongoing basis
- Control issues.
There is, therefore, a need to balance compliance and performance, by adopting an integrated approach addressing all issues and aspects, as shown on the figure below.
Best practice suggests an approach comprising:
- Review of existing situation
- Gather data and measure
- Conduct assessment around multiple dimensions
- Result analysis
- Benchmark results against best practice and defined goals
- Analyze results
- Prepare results analysis report
- Definition of priorities and building blocks
- Define priorities
- Identify building blocks for the path forward
- Development of transformation roadmap
- Schedule roadmap (workshop)
- Develop transformation roadmap, based on identified priorities
- Estimate budget
- Identify resource requirements and needed skills.