Thinking Commercially: Innovative Financial Management

financial management

It’s not unknown that the world remains in a state of economic uncertainty; following the UK recession, stories of financial insecurity have hit the headlines on a daily basis. Whether referring to manufacturing or retail industries, the UK or abroad, economic problems appear omnipresent and are undoubtedly re-shaping the way businesses operate – most predominantly, causing them to think commercially.

For the manufacturing industry, change has typically been pragmatic and carefully considered. Businesses are aware that even the smallest change – be that a choice of machine or an appointed CEO – can make a significant impact on a firm’s overall outlook. To invest in new machines, for instance, necessitates a tendering process and subsequently substantiates or undermines supply chain loyalty. Likewise, to innovate – as so many have strived to – is to involve second and third parties, potentially putting pressure on a business’ own principles and procedures.

Of course, in light of the digital era and the more demanding requirements of customers, manufacturing businesses have been forced to innovate and change more rapidly. The need to improve the overall service and solution, not just the product, has drastically altered the landscape of investment. Increasingly, businesses are looking toward value-adding technologies with which to secure client support and remain competitive.

Whilst the idea of adding value is commonly associated with either improving product or service however, businesses should be aware that any such changes require keen financial management. Innovation requires investment and investment has to pay back. Without knowing the figures, businesses run the risk out eating into their own profit margins or, at the very least, not achieving the profit margins possible.

Method statements and production plans are often problematically disconnected from financial plans in the manufacturing industry. Often, requirements are so wholly driven by quality, schedule and compliance that it’s difficult to factor in actual outlay and return. By placing emphasis on their finances and thinking commercially however, firms can ultimately streamline the manufacturing process itself – improving productivity whilst managing demand more effectively and more efficiently.

Considering the host of new control and automation technologies on the market, it’s becoming ever-easier for businesses to keep a handle on the books. Not only can optimised machines deliver greater precision or reduced downtime, but they’re also a measure with which to control and monitor time spent and materials used. Indeed, with the detailed analytics provided by control and monitoring technologies, organisations can identify where processes can be improved or eliminated and how workflow can be optimised.

In terms of where the sector should be aiming in terms financial management technology in particular, a Corporate Performance Management (CPM) system isn’t far off. As an automated database which collates driver-based planning and production with businesses’ financial needs, projections, actual sales, planning and cashflow, a CPM system can relieve a great deal of time on the part of the staff and deliver accurate, unified data on an ongoing and instant basis. As a trusted source of information which mitigates the possibility on human error and provides greater financial insight now, tomorrow and in three years’ time, businesses are afforded a more informed position from which to invest, innovate and prosper.

In a sector so driven by the long-term, effective financial management is one of the more succinct and effective measures with which to drive profit and improve customer experience. And with such a range of technologies available, thinking commercially is only more readily achievable and, with financial automation, businesses are bestowed the time and resources needed to really thrive.

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