X

Advice and Information for Finance Professionals

Why Standardization is Important for Finance

Remember those 3.5mm headphone jacks? Did you know that the technology for those jacks is over a century old?

Its progenitor, the 6.35mm jack, was initially used to operate the telephone switchboards of the past. Over the years, the increased use of the smaller version mirrored the technological advancement of consumer electronic products, like personal computers and mobile audio devices. The longevity of the 3.5mm headphone jack emphasizes the lasting power of standardization when properly executed.

Alas, this hundred-year-old standard is becoming a relic. In recent years, major cell phone producers decided to eliminate the 3.5mm headphone jack from their lineups, to the disappointment of many consumers. Apple was the first, and because of its enormous consumer influence, other cell phone manufacturers were quick to follow.

Unfortunately, all the companies involved were unable to agree on a new standard to replace the humble headphone jack—which continues to frustrate many consumers. While standardization holds incredible potential, without proper foresight and execution it can fall short.

Why Standardization Matters

Standardization as a business practice is incredibly important, because it ensures that customers and employees alike are beneficiaries of processes based on best practices. When executed properly, standardization can achieve incredible results. For example, with the advancements in GPS software, logistics companies can standardize their delivery routes to optimize efficiency. One such company decided to prioritize right turns about 90% of the time. By virtually eliminating left turns, they saved millions in fuel costs, saved tons of carbon dioxide from being released into the atmosphere, and delivered hundreds of thousands more in packages. It may seem counter-intuitive to prioritize right-turns, as it can increase the total distance of the route, but the results are clear.

In our own standardization efforts, Oracle achieved more than a billion dollars in savings. In June of 1999, Larry Ellison made the bold proclamation that through using our e-Business applications, the company would realize that savings goal. Within a year, his predictions came to fruition.

Today, Oracle is standardizing on its cloud applications, and so are thousands of our customers. There are two features of the Oracle Cloud that help drive standardization:

One is that Oracle Cloud applications are designed with modern best practices built into the software. Our customers don’t need to spend months discovering and designing best practices, because we’ve already done the work for them. A modern best practice can be thought of as a process or series of steps that consistently produces superior results. At its core, a modern best practice is simple to understand and easy to adopt. Oracle Cloud applications are built on modern best practices, and continue to evolve with the introduction of emerging technologies like AI and machine learning.

The second is that there are no customizations in the Oracle Cloud, and customizations are the enemy of standardization. Oracle provides the updates and patches, rolled out on a quarterly basis. The benefits of a standardized cloud far outweigh the custom models of old; not only is your software updated four times a year with the latest technology and features, your best practices evolve as the software evolves.

Oracle itself has realized numerous benefits from standardizing in the cloud—as highlighted in new research. Oracle's finance team has reduced manual accounting 14% quarter-over-quarter; reduced time, risk, and errors, with the ability to reconcile global intercompany accounts for hundreds of subsidiaries in only five hours; and liberated the finance staff to focus on value-added activities, such as developing global subject-matter expertise.

The idea of standardization may not be new, but its application is as relevant as ever. Learn more about how you can build tomorrow’s finance today with Oracle ERP and EPM Cloud.

Join Oracle and our finance customers at Modern Business Experience. Register today using discount code Leader19.

 

Be the first to comment

Comments ( 0 )
Please enter your name.Please provide a valid email address.Please enter a comment.CAPTCHA challenge response provided was incorrect. Please try again.