The Workflow Revolution - Changes to Financial Reporting
Thomas Friedman first talked about how globalization impacts business life in The World is Flat. In this book, he describes the ‘flattening of the world’ as the idea that workers from around the globe could collaborate and work across systems and wide spans of geography. One specific part of this flattening is a change he refers to as the “quiet revolution in software, transmission protocols” that he calls "the 'workflow revolution' because of how it made everyone’s computer and software interoperable.”
I see this amazing transformation offered within financial software today, but many companies don’t completely understand the value or the concepts to implement this approach.
New financial systems today allow for the immediate submission of data. The best practice applications of these systems allow for the validation, translation and commentary of this submission to be owned by the end users.
When I discuss the applied concept with clients, I speak of this ‘changing conversation.’ Before this workflow revolution, legal entities in remote parts of the globe would prepare financials and fax them, or teletype them, to a corporate office. A process that was manual, slow and disconnected.
The end users owning the process changes the communication of the business. The old typical conversation before might have been a submission of some financial data followed by a response that the data is incorrect or incomplete, and then a resubmission – all taking days to complete. The process was also flawed in that it relied completely on the receiving member being proactive, and finding the errors. Surprisingly, many companies still use this approach.
The technology exists to solve this problem and provide two major benefits. First, products today make the validation systematic, hence reliable. The end user knows immediately if the data is wrong, and can resolve the issues. The system provide consistency and reliability that cannot be accomplished with people. Second, the end users can be made aware of potential problems and begin researching proactively. This proactive approach cuts days from the process and improves data quality.