Define and communicate the benefits and disadvantages of new approaches
Defining and communicating the benefits of new approaches
It is vital that you define the benefits of any new approaches to budgetary management that you adopt, before communicating them to your team.
Defining approaches will require you to meet with other relevant personnel to discuss why it is worth adopting new approaches, and why they will help the organisation to control finances more effectively. All employees who deal with any aspect of organisational finances should be involved in this meeting, as it is these staff that will ensure the new approaches are implemented correctly.
A lack of information may lead to a lack of financial control, potentially leading to the failure of new strategies and approaches.
Defining the benefits of new approaches will require you to:
➢ Express why they are better than old approaches
➢ Point out why new approaches are more accurate in estimating
income and expenditure
➢ Communicate why new approaches will increase efficiency and
decrease wastage
➢ Explain how new approaches will help to prioritise organisational goals and objectives
➢ Determine how monitoring, reviewing, and reporting will improve with the adoption of the new approach.
Defining and communicating the disadvantages of approaches
While it is important to emphasise why a particular approach will work, it is also important to point out the drawbacks.
Defining and communicating the disadvantages of approaches that you are planning to adopt will ensure that all staff know what pitfalls to watch out for, and how to minimise the effect of disadvantages. Again, communication is vital, so make sure you organise a dedicated meeting to cover all areas.
You may need to communicate:
➢ Why new approaches/strategies can lead to lack of control or incorrect budget estimations
➢ When disadvantages are likely to occur
➢ What areas of the organisation or budget the disadvantages are likely to occur in
➢ How staff can act to minimise the impact of disadvantages
➢ Key monitoring and reporting protocols which will help to minimise the impact of disadvantages.
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Activity 3D
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3.5 – Take account of impacts on customer service levels and colleagues in developing new approaches
Impact on customer service
You must be aware of the effect that adopting new financial approaches is likely to have on your organisation’s customers.
Trying to re-direct, cut, and control expenditure within your organisation will have an effect on customers’ experiences – whether they are positive or negative.
You must be extremely careful that your organisation’s actions when controlling expenditure do not negatively impact on the customer experience. Ideally, you should make small adjustments to financial management approaches, so that you can easily monitor the effect they have on customers. If you are making fundamental changes to approaches, you must regularly review the effect this has on customers and be prepared to make changes if new approaches are not working.
A key part of monitoring will be to ask customers for feedback, and this can be done through interviews, questionnaires, social media, feedback forms, email, and phone calls.
Be aware, new approaches can lead to:
➢ More/less funds for human resources
o this may lead to less customer service staff, or lower
quality staff
➢ More/less funds for communications
o customer hotlines may be understaffed
o response times may rise
➢ More/less funds for purchasing materials
o products and services may suffer because of this, which will directly impact the customer experience
➢ More/less funds on customer areas – such as shop floors, eating areas, and payment areas
o negative experiences can lead customers to think twice before doing business with you again
➢ More/less funds for technology.
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Impact on colleagues
When new financial management approaches are introduced, there is often an adjustment process, in which employees have to learn, accept and feel comfortable with new methods and strategies. This may take some time, and you will need to account for this and for the impact that this is likely to have on the organisation.
To improve the transition process, you should focus on clear and regular communication with your employees. Communicating what changes are expected and why those changes are happening, will improve their chances of understanding and supporting any new approaches.
Often, it can be beneficial to publicise financial information within the organisation to improve the engagement of employees – even if they have no financial decision-making power. Doing this can make employees feel involved with the organisation’s goals and overall activity, and show them how their actions affect income and expenditure.
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