Metaphoric Silos — since each employee, division or department interacts primarily within their specific “grain” silo rather than with other groups across the organization — need to be broken down to increase productivity and profitability. Mark Johnson of B2B CFO collaborates with Mary Henry of HR on Demand to produce the PowerPoint and lecture.
Business Transformation - Finance Transformation using SAP Solutions
Breaking Down Silos: When HR and Finance Collaborate
1. Breaking Down Silos: When
HR and Finance Collaborate
Mary Henry Mark Johnson
HR on Demand B2B CFO®
June 20th , 2012
2. Objective
Define silos and the shift away from them.
Benefits of coordination, cooperation
capability development and connection.
What does that mean for HR and Finance?
Work through business problems with the
customer focus
3. Mark Johnson
CPA with KPMG an international accounting firm for
12 years
Senior financial executive for large retailers including
Victoria Secret Stores, Kay-Bee Toys, Conway
Stores and PetsMart
Partner for B2B CFO® with clients in
manufacturing, health
care, education, hospitality, construction and
litigation support
4. Definition of a Silo
A metaphor to a grain silo where each
employee, division or department interacts
primarily within that silo rather than other groups
across the organization.
Silos also extend to systems and data. As
systems fail to interact and data becomes
trapped and unavailable to key decision makers.
5. Examples of Silos
This phenomenon exhibits itself in a
number of ways such as:
This is MY department syndrome
“That’s not my job”
Information isolation
6. The 4 C’s of Customer Focused
Solutions
Coordination – Companies need mechanisms that
allow customer related information sharing
Cooperation – People closest to the customer have
authority to act
Capability development – Organizations need
employees with generalist skills
Connection – Developing relationships with
external partners
7. Silos are Common
Only 37 % of 23,000 employees in a recent
poll said that they have a clear
understanding of what their company was
trying to achieve and why.
Stephen Covey The 8th Habit: From Effectiveness to Greatness
8. How do we Fix the Problem?
1. Eliminate needless Formality and Hierarchy
2. Provide One Click Access to the Entire
Organization
3. Design Dedicated Physical Spaces for
Collaboration
4. Adopt Common Systems and Processes
5. Establish Cross - Functional Mentoring
9. Eliminate needless Formality and
Hierarchy
Share resources through staff e.g.
accounting intern for HR
Commit to regular meetings between
finance and accounting staff
Provide a direct line of communication
with department heads (CFO and the VP
of Human Resources)
10. Provide One Click Access
Streamline the communication of important
information flow between accounting and HR eg.
Staffing changes, promotions, budget
overruns, etc.
Maintain common databases for monthly
financial information and headcount
Provide financial statements with history and
details that are readily available and reliable
11. Design Dedicated Physical Spaces for
Collaboration
Design collaborative physical spaces in
offices and conference rooms (i.e.
accounting and HR are physical situated
near each other)
Use video conferencing and other technology
to connect directly with accounting and HR in
distant locations
12. Adopt Common Systems and
Processes
• Develop an enterprise wide information reporting
system (ERP) that provides all departments and
divisions information from a common database
• Establish and report on key performance indicators
(KPI’s)
• Utilize software tools for scheduling of
employees, performance evaluations and other
related HR processes to ensure effective and
efficient operations with budgets
13. Characteristics of KPI’s
Only have 3 to 5 KPI’s for an organization
Roll up departmental KPI’s to address
company- wide KPI measures
KPI differ by organization
KPI’s provide a direction, benchmark, target
and timeframe
Includes operation and financial information
14. Some Key Performance Indicators
Sales volume per unit or location
Margin per product or location
Cost per unit or location
Overhead or fixed costs
Utilization % of plant capacity or capital equipment
Revenue per employee
Payroll cost per employee
Hourly rate of labor per unit
15. Challenges with KPI’s
Expensive or difficult to determine
Adjusts to changing needs in the company
Difficulties in benchmarking
Rough guide rather than a precise
measurement
16. Establish Cross Functional Mentoring
• Encourage staff in accounting and HR to find mentors in the
other department to increase communication and expand and
broaden skills
• Manage external resources that are shared such as a third
party payroll services, payroll benefits and executive recruiters
through cooperative teams between finance and accounting
• Create a multidepartmental team for difficult budgeting activities
such as headcount management, bonus structure and payroll
adjustments
17. Breaking Down Silos
“In most situations silos rise up not because of what executives are doing
purposefully but rather because of what they are failing to do: provide themselves
and their employees with a compelling context to work together.”
“To tear down silos, leaders must go beyond behaviors and address the contextual
issues at the heart of the departmental separation and politics.”
- Patrick Lencioni Silos, Politics and Turf Wars