Posts Tagged ‘support’

Support for Business Finance – Where Can You Go?

Doug Richard’s recent report on business support in the UK highlighted that there are 3,000 government agencies and most of them simply direct people to other agencies. This can lead to a never ending cycle of being passed from pillar to post and having to explain yourself over and over again. So if you want help with your business finance, where can you go?

Here are the various options open to SMEs in the UK to help you decide the best route for you.

1. Your Bank

The high street banks (RBS, Barclays, HSBC, Lloyds) can certainly give you advice in terms of loans, overdrafts, invoice finance and they can also give you some guidance on developing cashflows and general business advice. Usually the advice is coming from staff who are well trained internally and have seen lots of businesses from the outside but may not have had the direct operational experience of running a business.

2. Your Accountant

Accountants come in many guises and it’s important that you understand whether you are dealing with an auditor (responsible for verifying your accounts after the year end), a tax advisor (helping you with Tax and VAT issues) or a firm helping with your bookkeeping, management reporting and accounts. Each of these has different specialist skills and you shouldn’t assume that just because someone helps you with your tax, they’ll also be giving you overall business advice. Equally, you’ll find that many firms from the big four (PWC, Deloitte, KPMG, E&Y) , the mid tier (Grant Thornton, BDO, Baker Tilley) and the fast growing newer firms (Tenon, Vantis, Target) can give you good specific advice on business finance issues. However, make sure that you have agreed this specifically in any engagement letter. Otherwise they might think they’re just keeping your books or auditing your company and you might think they’re advising you on how well your business is performing and highlighting any potential finance issues. The gap between these expectations has caused significant problems for many companies.

3. Your own FD or CFO

If you have your own finance staff then make sure you make the best use of them. It’s easy to dismiss the finance team as being too much in the detail and always taking a negative view but they are often highly experienced and well trained professionals who have a very good insight into your business. Listen to what they have to say and don’t just disregard their views because you prefer to hear all the good news that your sales director is telling you. A good FD or CFO will often have experience from other companies that they can bring to bear in your business.

4. Part Time FD Companies

These have been rapidly growing in popularity for SMEs and even some larger corporates and they can provide an excellent source of support and advice. They provide someone in your business on a part time basis who can guide you from their knowledge and experience in a way that’s particularly relevant to your business. When you can’t afford your own full time FD or CFO these companies (FD Solutions, Secantor, Marshall Keen, FDUK, MyFD) can all provide the support and guidance you require for your business finance in a manner that can be very beneficial for your business. Having an FD or CFO in your business, even on a part time basis can give your company a real boost and can give you a trusted advisor to turn to for advice on your company finances.

5. Government Agencies

As the Richards Review highlighted it can easily end up feeling like you’re chasing your tail when you deal with these agencies and sometimes the time and effort you put in can feel wasted when you don’t get anywhere. Business Link, which provides somewhat of a hub, has a variable reputation depending on your local region. Some of the Enterprise Hubs are more supportive and operations like Finance South East have built a good reputation for clear and relevant advice.

6. Corporate Finance Firms

There are many companies competing in the market to help you raise money for your company. These are businesses in their own right who are seeking to make a profit but that shouldn’t put you off. It means they are incentivised to help you succeed. Generally these firms do charge an upfront fee but most of them earn more of their fees from a back-end success component (a percentage of whatever is raised). Charges will range from £2k to £15k upfront and success fees are generally in the region of 5%, although they can go up to 20%. Beware of companies that either offer the service for free (on the basis that you generally get what you pay for) or that charge a very high upfront fee. There are also some who appear to guarantee an investment providing you pay for Due Diligence (DD). You end up paying £40k in advance and they find something in DD that prevents them investing (which they never really intended to do anyway). Make sure you understand and agreements before you enter into them.

7. Your Friends and Family

In reality, this is where many people go for initial advice. Now unless your friends and family happen to fall into any of the previous 6 categories, it’s likely that their advice may be somewhat questionable. If they’ve had actual experience of the same issues and they’ve resolved it then by all means listen to them. However, you should always think about the source of your advice. Where has their knowledge and experience come from?

The key lessons here are to consider where the information is coming from, whether that information is based on real world experience and training and how relevant it is to your particular business.

“Enabling Your Human Resource Information System To Support Hr Strategic Roles”

Human Resource Management (HRM) has shifted its function within Organisations over the last few years. Its function has grown considerably and has shifted into a more strategic role rather than providing support for administrative paperwork. There has been a shift too, in terminology, with the term Strategic Human Resource Management (SHRM) becoming more common.

Dave Ulrich, a well-known HR Guru from the University of Michigan says that the purpose of the HR function is simply twofold: firstly, to improve the organisation’s capability, and secondly, to improve individual capability within the organisation.

To improve Organisation performance and create competitive advantage, the HR team must focus on a new set of priorities. These new priorities are more business, and strategic oriented and less geared towards traditional HR functions such as staffing, training, appraisal and compensation.

Strategic priorities include team-based job designs, flexible workforces, quality improvement practices, employee empowerment and incentive compensation. SHRM was designed to diagnose organisation strategic needs and plan the development of talent which is required to implement a competitive strategy and achieve operational goals (Huselid et al., 1997).

This strategic role not only adds a valuable dimension to the HR function, but also changes the competencies that define HR professional and practitioner success.

In response to its new role and responsibilities, HR professionals need a system that can manage as well as handle the “traditional” HR work. This is where Human Resource Information System (HRIS) starts to come in. Human Resource Information Systems (HRIS) refers to the systems and processes at the intersection between human resource management (HRM) and information technology (www.Wikipedia.org). It merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field and have been used in HR Departments for many years now. It is now expected to drive Human Resource (HR)’s transition from an administrative and operational role to a strategic role.

Many companies now strive to become ‘world class’. The goal is to work and perform in ways that are comparable to the most successful players on the world stage. If we explore the question: “What does World Class HR mean in practice” we will see two descriptions consistently cited. The first is that World Class HR functions manage their strategic work through the ability to measure what they do, and how they contribute. The second is that World Class HR functions consistently utilize technology to enable them to track, analyse, and report those measures. They also use technology, HRIS, to enable them to continue to handle the traditional transactional HR work – which still has to be done!

So for companies aspiring to be World Class, Human Resources Information Systems (HRIS) play an important part in an organisations’ HR function. Any ‘transformation’ of HR, or of ‘People Management’ or of ‘Performance Management’ without paying attention to their HRIS capability and needs will be unable to (a) handle their strategic role and measure their contribution to the organisation, and (b) run the risk of letting the traditional transactional functions of HR administration falls behind, and drag down the transformation efforts by failing to deliver the  fundamentals.

After all, we live, work and play in the information technology era. Implementing an effective HRIS keeps the HR Department in the right path to deliver more effective and streamlined service to the Organisation. Since the rapid development of technology, software developers are continuously creating new and sophisticated softwares that can help companies execute day-to-day HR administrative tasks as well as enabling them to perform fast and effective recruitment process, performance management, compensation & benefit, etc.

They do this by streamlining workflow processes through controlled processes, system interfaces and database validation. Not only should things flow more smoothly, but the big plus for top management and function management is that HRIS helps to ensure a greater control over any HR management related processes, enabling users to follow through tasks more easily. It lets us set measures for task process as well as completion. We can know how far a process has gone, before its too late to speed up or correct direction.

Typically, the people in the firm who interact with the HRIS are segmented into three groups: (1) HR professionals, (2) managers in functional areas (production, marketing, engineering etc.) and (3) employees (Anderson, 1997).The usages of HRIS have increased quite significantly among Organisations of different sizes due to their enhancing the strategic human resource management role in the company.

Kovach et al., (2002) listed several administrative and strategic advantages to using HRIS. Similarly, Beckers and Bsat (2002) pointed out at least five reasons why companies should use HRIS. These are:

1. Increase competitiveness by improving HR practices

2. Produce a greater number and variety of HR operations

3. Shift the focus of HR from the processing of transactions to strategic HRM

4. Make employees part of HRIS, and

5. Reengineer the entire HR function

Despite the fact that it has become quite common amongst HR practitioners – it is still uncertain whether the Organisation are using their HRIS optimally in terms of supporting the strategic role of HR. Many organisations still use HRIS as a database pool as well as to complete basic HR transactional tasks only, and have not yet optimised the actual capability of HRIS. If your company is using HRIS, let’s assess the benefit of utilizing HRIS by comparing it against the above five reasons. Ask yourselves:

How far is your HR administration supported by HRIS?
Do managers and employees have access to HRIS for transactions, and participate in its use?
You might know what metrics you would like to use to measure your HR acitvities ands results. BUT how many of those measures can esaily be tracked analysed and reported using an HRIS system?
Is your company – its employees and managers -  equipped at their places of work, with the technology to respond to new tools for organisation and people management purposes? (Online surveys, Performance management, Intranet communications, online HRM transactions for benefits, employee data).
Is there a need to ‘bring your HR group’ up to the 21st century, and contribute to the strategic management of the business?
Are there any similarities between your company’s reasons for considering enhancing HRIS, with the above five reasons on the use of HRIS?
Do you believe that HRIS benefits your company, and in what way?

In brief HRIS is an enabler and empower for the HR function, and HRIS can provide line managers with a functionality to meet each of their work unit goals and objectives as well as providing data and analysis, especially for performance appraisal and performance management of their subordinates.

Additionally, individual employees can also benefit from HRIS. They can interact more flexibly by having an access to the system and conduct a self-service modification process of many benefit options and administration alternative as well as updating their performance and task achievements status in realtime.

It is now critical for Organisations who are currently using HRIS to enable its HR managers, line managers and employees in making the most out of available technology. By enabling HRIS in the Organisation and leverage the use of technology to support the overall strategic responsibilities of HR, it will put your Organisation in a roadmap towards the best practice of world-class HR.

—TR2010–

By: Tewu Rama – Consultant OPUS Management  Indonesia 2010

Sources:

Anderson R. Wayne (1997) “The future of Human Resources: Forging Ahead or Falling Behind in Tomorrow’s Human Resource Management.

Huselid, M.A., Jackson, S.E. and Schuler, R.S. (1997) “Technical and strategic human resource management effectiveness as determinants of firm performance”, Academy of Management Journal, Vol. 40, pp. 171-88.

“Human Resource Management System” http://en.wikipedia.org/wiki/HRIS

Kovach, K.A., Hughes, A.A., Fagan, P. and Maggitti, P.G. (2002), “Administrative and strategic advantages of HRIS”, Employment Relations Today, Vol. 29 No. 2, 43-48.

Ulrich, D. (1997) Human Resource Champions: The Next Agenda for Adding Value and delivering Results. Boston, MA: Harvard Business School Press. p.38

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