Too often my clients tell me that they want to be more involved in strategy.
My first question is ‘what do you understand by the word strategy?’
The answers vary across the board, none of which usually deal with what I understand to be strategy!
So here is a simple way of looking at what strategy entails:
STRATEGY IS ABOUT WORKING ON THE BUSINESS INSTEAD OF IN THE BUSINESS.
Simply put, it’s about keeping a bigger picture view and being proactive in dealing with issues.
It might also include the question – “where to from here?”.
Here are some questions that might relate to strategy:
- Are theIT systems serving the financial needs of the company?
- Is the cash management process adequate enough to ensure the company does not run out of funds?
- Are adequate governance issues in place?
- What are the business risks and have they been considered and mitigated?
- What are the implications of Integrated Thinking on the business?
- What are the implications of the new IFRS discussion papers and when will they need to be implemented?
- What are the implications of changes to the Income Tax Act, Labour Act, Companies Act etc and how will they affect the business?
- Should the accounting function be centralised – substantial cost savings could result and hence motivate upgrading the IT systems?
- Should the distribution/warehousing function be outsourced?
- What of business intelligence – is the IT function giving meaningful information to better run the business. For example is there a daily Gross Profit report by division by product or a stock ageing report that doesn’t show returned stock as new?
But it is very important to remember is that you cannot work on the business if your basic financial information is coming out late and incorrectly. Your primary function is to have solid financial reporting systems that give the right answers ON TIME!
Until you have that, forget about strategy!