Simon Gray, Finance and Operations Manager at Agilisys, explains how modern agile financial management systems can improve strategic decision making in the public sector
If recent events have taught us anything, it’s the fact that the world can turn upside down in record time. While significant uncertainty remains around the long-term impacts of the pandemic – and what it will mean for the public sector – financial leaders will need to help their organizations digest new information and act quickly as circumstances change. .
The need for responsiveness is acute. If you can’t make timely decisions, you’re always late. Financial challenges are everywhere. The key is to have real-time access to relevant information so that priorities can be set for budget allocation and financial management.
As a citizen, I want to know that when my council approves its latest budget, it takes into account potential challenges in the future. To do this, modeling is important. The revenues are relatively static, as are some statutory services that must be provided such as environmental health, garbage collection and street cleaning. These represent a certain level of expenditure. The big question, however, is what do you do with the rest of the money.
All about data
The reality is, if you don’t have the data to show how to best use the available budget, you can’t make those decisions. Moreover, you cannot communicate the reasoning behind these decisions to the citizens. Financial systems are all data driven. The average local authority has hundreds of systems filled with financial information covering planning, highways, adult social services, child care, schools, and more. Effective financial systems take this data, standardize it, and allow a budget manager to decide what they can – or cannot – do with their available budget.
Scenario planning provides the opportunity for finance to support the organization with a key strategic overview. This in turn enables informed and timely decision making. For example, if you’re going to start shutting down some library services in the community, what have you weighed that up against in terms of priorities? What are you going to spend the money on instead? Right down to the executive level, this is the kind of data they rely on to make those decisions.
Dynamism and flexibility
There is no doubt that modern and dynamic financial systems are a source of great appetite. However, it doesn’t have to be a knee-jerk reaction. It is important for local communities to work with vendors who have in-depth Microsoft Dynamics 365 Finance technical know-how to facilitate their transformation plans. Only then can they build the technology-based finance team that public sector organizations need.
Local authorities who have adopted these solutions are already beginning to benefit from the flexibility in how systems can be configured to provide scenario planning. They value the ability to tailor systems to their unique needs and successfully find ways to deliver efficiency to employees and citizens. Mobile portal-based solutions, easy to access anytime and anywhere, are particularly suited to the need for flexible working.
In the cloud
Another key factor in moving to modern SaaS-based enterprise research planning (ERP) solutions is the adoption of cloud-centric policies. Purchase to pay, order to cash, expenses, project accounting, and payroll are just a few of the areas that benefit from a full cloud ERP experience. This is then backed up by strong analytics and reporting with flexible on-demand work that adapts to the needs of the organization.
Microsoft Dynamics 365 Finance integrates all relevant processes within a local authority, including finance, project control, purchasing and customer relationship management as well as billable hours and budget administration. All information is immediately available, allowing the team to perform detailed analysis and adjustments that ensure business agility, minimized costs, optimized spend across all departments, and process automation.
Four lines of sight
Today, the financial leader of local authorities has four axes of vision: hindsight and surveillance, focused on financial monitoring and historical figures, as well as insight and foresight, focused on anticipation and evolution for meet the needs of stakeholders such as the board of directors, investors and the community at large.
The active financial planning enabled by the modern financial systems detailed above provides these four lines of focus. They help CFOs gain data-driven insight into the potential impact of multiple scenarios, while agile financial management helps focus on efficient resource improvements for frontline delivery. They also help financial executives manage uncertainty and disruption; an essential requirement as we emerge from the COVID-19 pandemic.