Additionally, they would be the best people to put in figures benefits accrued as a result of improvements. They can help coordinate activities across departments that may even be in varied geographical locations. The finance department can prove to be best business partner for successful deployment of such projects.
The Finance Team as a Business Partner
Six Sigma projects help reduce the operational cost based on strategic decisions made from specific data. The finance team is in a better situation to assess the financial implications of any changes in relation to the organization's bottom line.
Finance is often seen as bookkeepers, auditors, etc. However, it is easier for them to utilize software to measure improvements and resulting financial benefits. This data can also be used for further improvements that come as a part of continual improvement initiatives of the company.
The involvement of the finance team has to be right at start of the project. They can assist the Six Sigma team in the selection of projects. They can locate those projects that may have the greatest impact on the financial objectives and ensure that problems that need immediate attention are taken up on priority basis.
They can also keep the project pipeline full.
Once projects are selected, finance team members and process owners can decide how benefits should be calculated upon implementation of the project.
Similarly, after project implementation, they can also put in place control mechanisms to ensure that results are achieved according to set standards. If there is a variation or deviation, it may show up when review is undertaken.
With the Six Sigma team, the finance department can determine the reasons for lack of performance. Even after process ownership is transferred to the process owners, the finance team can keep track of the KPIs that are improved and their impact on the bottom line.
Benefits of Involving Finance
- Integrity of results: A very important benefit achieved with the involvement of the finance team is integrity of results.
If the project team is calculating benefits, there is the possibility to give in to the temptation to record potential benefits instead of the real ones.
This may not point out the drawbacks, and will not help the Six Sigma team to ensure that necessary efforts are directed towards achieving improvements in KPIs.
Standard calculation: They can insist and develop a standard system for calculation of results.
This makes the results comparable and also ensures that efforts are directed towards achieving targets.
Recording incorrect benefits: If process owners fail to consider processes outside the project scope, the benefits calculation may be incorrect and will not show the true picture.
Audited results and accountability: Like any other finance function, project benefits are also subject to audits.
Budgeting: The improved process can then be embedded into the next budget so that the improved KPIs become as permanent as possible.
Finance department participation should be right from the start to the end of the project, which will help project implementations to be successful.