Do you have the right controls?

Do you have the right controls to be an effective leader?   

• To what extent do you have the ability to direct your resources to be their most profitable in real-time?
  (Job Costing Controls, Pricing Intelligence)
  
• Are employees working on the right job, at the right time, at the right labor effectiveness rate, with the right outcomes? (The Right Quality Controls)
  
• How profitable are you? Do you know your profitability by project/client/team?  If profits can be measured after the fact; then why not provide this information to managers in real-time? (Profitability Controls)
  
• Are you alerted when behaviors change and variances occur?  Protect yourself against mistakes, reporting inaccuracies, fraud, and changes in behavior (employee productivity, cash balance, or AR balance by client for example). (Variance Alerts, Benchmark Notifications)

 

Controls have existed from ancient times to ensure accuracy. In ancient Rome there was a dual administration, with one set of bureaucrats charged with collecting taxes and another with reporting the collections.  Early in the history of the United States, multiple controls were established via Departments (Department of Health, Transportation, Treasury, etc.).

In modern times, when the majority of employees have Internet access to files and records anytime, anywhere; risk management controls are required.  And for majority of businesses today, the profitability of the company depends on employees’ daily activities.  Like ancient time, controls are required.  However, in today’s world, controls can be automated and improved through technology. 

 

All managers require controls to be leaders because leaders need to know in real-time  how well the business and people are performing. 

 

To be effective, it is essential managers have the controls in place they need to govern and lead such as profitability analysis, reliable forecast analysis, variance alert notifications, and the operational intelligence to connect daily execution to the company strategy and corporate objectives.

 

Management Science controls includes the following benefits: 

• Accuracy of reporting, eliminating fraud and
  protecting the organization’s resources.
• Authority workflow processes: policies and benchmarks can be established and reported via alert notifications when variances and or thresholds  are approached.
• Contribution analysis (profitability analysis).
• Expense management to ensure no surprises.
• Performance management: waiting until the end of the quarter to evaluate performance is an untenable position in both this economy and also in today’s fast paced world.  The ability to have financial reports, operational measures, and people key performance indicators on a real-time is the difference between  break-even cash flows and best-in-class profitability. 
• Predictability: Using forecasts and indicators, weaknesses in the business can be identified before they reach crisis stage and allows the manager to make the necessary changes and adjustments before major problems develop.
• Productivity: Management information systems deliver measurement and metrics for key resources and employees.
• Risk management controls against:
  • Errors, mistakes, malice, mischief, fraud, theft. Protect your assets: both physical (e.g., cash and property) and intangible (e.g., client lists, brand reputation or intellectual property such as trademarks).
  • Variance: control procedures ^{(sometimes called operational controls or financial controls)} reduce process variation, leading to more predictable outcomes.
• Spending controls.
• Supervision or monitoring of operations and activities such as:
  • Top-level alert notifcations of actual results versus organizational goals or plans.
  • Routine, periodic and regular operational reviews, metrics, and other key performance indicators (KPIs).
  • Controls over processing (a variety of control activities are used in daily processing tasks). Examples include edit checks of data entered, accounting for transactions in numerical sequences, comparing file totals with control accounts, and controlling access to data, files and programs.

   

It’s important that all managers have controls so that they can be effective.   What we have found over the years, having assessed and worked with hundreds of businesses, is that the majority of leaders do not have in place the controls (reporting and workflow processes) needed on a real-time bases to ensure operational execution matches the corporate objectives.

 

At Polus Group (a portfolio company of Ephor Group, LLC and a provider of Management Science via outsourced F&A), we ensure companies have the right controls to drive accountability and performance.  Polus Group was founded to give control back to its leaders. 

 

Learn more about gaining controls with Management Science and the benefits of outsourced F&A via our website:

http://www.polusgroup.com/managementsciencenews.asp

 

And remember: It’s What You Know, and When You Know It. Management Science Drives Performance.