If financials are the lifeblood of an organization, financial operations (FinOps) professionals are the cardiologists who make sure it flows smoothly. FinOps is usually responsible for optimizing and maintaining finance systems, as well as the links between those and other enterprise systems, such as a CRM.
Individuals in this role have the important task of connecting the finance department to other parts of the business, which is integral to the success of the company. Because it requires exchange of information with nearly the entire workforce, spend management is a major part of finance operations—or at least it should be.
As employees across the organization increasingly make purchasing decisions independent of a central procurement department, managing spend has become more complex. There are more transactions from more vendors, which means the process of requesting funds, gathering information about purchases, and reconciling it all at month-end can be a burden on finance teams and other employees alike.
Traditional systems built for legacy centralized purchasing fall short on the critical functionalities necessary for the modern finance team. The distributed nature of business spend today requires a more proactive approach to spend management.
Furthermore, employees may struggle to follow the purchasing policy, even if they want to do so. For example, if the policy document is stored in a database with other lengthy legal files, it may not be very accessible to employees who need to make purchases quickly and easily.
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Agile operations require proactivity. Anticipating and solving problems before they occur means that fewer challenges actually arise. True proactivity, however, goes a step further than that, instead developing forward-looking processes as opposed to simply functional ones.
While spend management falls under finance’s scope, it requires compliance from all employees in order to work. Thus, designing processes that are easy for employees to follow—and embedding them into their existing workflow—is a must. If no one follows the process, then it doesn’t matter how good it is.
Real-time visibility is another capability that often gets lost in the shuffle of finance operations. The ability to track spend as it happens allows FinOps to lend relevant, strategic insights in real time and support the business with key data, such as variable spend. Robust integrations with other enterprise systems facilitate this knowledge sharing by allowing data to flow seamlessly across the organization.
It is not uncommon for employees to regard finance as a source of friction. Developing a distributed spend management process that meets the needs of both finance and other employees will enable the entire workforce to work agilely together towards an organization’s goals.