In the previous posting I suggested that one of the issues holding back businesses, and in particular the effectiveness of eProcurement implementations, was an inherent lack of trust between the organisation and its employees. Some readers responded to that point in support of the lack of trust and suggested that it was correct and even essential in modern business. They cited examples of employees, either within their recent experience or that they had heard of, who had taken liberties with other people’s money and had not demonstrated a deep rooted desire to minimise expenditure and maximise value. One example, which touched a note with me, was the tale of a company yacht whose existence only came to light as a a result of a requisition being raised for its repair.
There are no doubt thousands of such stories that could be brought as examples and justifications of why tougher controls are required and why businesses should be ever more stringent on how they limit access to requisitioning systems. I, however subscribe to a different view point and it is precisely because of all of these stories that instead we need to make a u-turn in how we treat, and trust our staff.
Core to the numerous stories of poor, or even mismanagement of company funds is a complete lack of responsibility and ownership. In too many organisations there is an explicit position taken that Finance monitors performance against budgets and tells the so-called cost centre managers how they are doing. Businesses are built in such a way because they have evolved over decades to be like that. Look, for example at your own organisation and ask whether there are more staff involved in tracking where the money has gone than there are focused on reducing the future cost of doing business.
A recent suggestion of a business process design within a company looking to really change epitomised this position for me. The suggested solution would have every bit of expenditure, every requisition, scrutinised by a member of Finance in order to ‘make sure it was within the agreed budget’ of that particular business function. This check point would come before even the business manager has decided if it is something they want to approve. Many might ask why not, after-all, who knows the numbers better than Finance? Very true, but unfortunately there is a catastrophic knock-on effect to such a course of action which, if left unaltered, will lead to ever more examples of business money wasted. Why? Simply put, business managers specifically, and staff generally, are being conditioned to believe that someone else is looking after the money so they don’t have to bother.
If instead, you followed a far more ancient, or even base approach, what do you think the results would be? Rather than suggesting that a manager had a certain budget and then continue to police things, why not actually give them the money and allow them to manage it, holding them truly to account for delivering the business outcomes – give them real responsibility for it!
Sadly, it’s not an overnight thing, you can’t just lead a child into a sweet shop and expect them to not gorge on the stock and instead to run the business effectively. What needs to happen first is that managers, and staff need to be given back the tools to be able to effectively manage and at the same time be given the proper understanding of their responsibility. Let’s get back to a position where managers are trained and guided in how to properly manage budgets and to relate that activity to output performance.
So, it all comes back to the systems, after-all, it is somewhat difficult to manage a position if you don’t know where you are or where you are going. In the next instalment the focus will shift from looking at the people and the process to investigating the technology and asking how some systems can really help and why there are such differences out there.