How Blogs, Wikis and Social Networks Add Value in Closing the Books

Many organizations are using social business software to add value, enhance business performance and strengthen connections with employees, customers and vendors. Social software, however, has yet to be adopted by many finance organizations, as some CFOs appear skeptical of its value.

study conducted by MIT Sloan Management Review in collaboration with Deloitte found that only 14% of CFOs surveyed view social tools as important to their organizations, while 28% of CEOs, presidents and managing directors regard them as important.

“The internal social network facilitated the finance organization’s ability to achieve [the goal of a three-day close] with fewer iterations, and it has made the finance professionals’ lives easier”

“There’s still a lack of tangible measures of the value of social business and CFOs are bottom line-oriented,” observes Mark White, chief technical officer of Deloitte Consulting LLP. “They want to know that the money, talent and the time invested in implementing social business are worthwhile.”

The value of social tools

But White says that social tools such as microblogs, wikis, internal social networks, instant messaging applications and threaded discussion forums can help CFOs improve finance organization performance.

“The financial close-the-books process is an example of how social software can drive improvements in finance’s decision-making and  processes, by making the close more transparent, efficient, repeatable and defensible,” he says.

Closing the books in a timely and accurate manner can be a challenge in itself, but particularly so when exceptions, such as errors or other unanticipated issues, occur.  Anticipated events, such as new regulatory guidelines or integrating an acquired business, can also hamper the financial close.

And although the close may eventually reflect an exception or a new event in a correct manner, the process of resolving these exceptions today can be highly inefficient, with lots of wasted time, and the discussions, thinking and decisions that occurred throughout the process may not have been captured. 

That could be a critical loss to a finance organization’s institutional memory, notes White.

A three-day close

To illustrate how CFOs can improve close the books with social software, Matthew Soderberg, a senior manager in Deloitte Consulting LLP’s M&A Finance practice, points to a technology company that recently utilized social networking tools to help it close the books within three days.

Following the implementation of an enterprise-wide internal social network, the company’s corporate accounting team created a user group for the finance team members involved in the close and consolidation processes. 

Instead of using email to notify the applicable groups within the finance function when an event in the close process has taken place to trigger the next step, or when there’s a problem that requires correction, the finance team can post updates about the close process and diagnose, explain and correct errors faster because activities are posted in real time.

Posting updates about the close process has significantly reduced email traffic and the role of corporate accounting as middleman, according to Soderberg.

“This company had been working hard to get to a three-day close. The internal social network facilitated the finance organization’s ability to achieve that goal with fewer iterations, and it has made the finance professionals’ lives easier during the three-day close process,” he says.

Productivity improvements

Social tools are being effectively deployed by organizations to enhance business performance in operations, innovation and other areas, according to Metrics That Matter: Social Software for Business Performance, a study by the Deloitte Center for the Edge.

According to the authors of the study, social software provides organizations the capabilities to identify knowledge and experience, communicate across boundaries, preserve institutional memory, harness knowledge that may be distributed across geographies and functions, and discover emerging opportunities.

“Social software can be applied against a variety of business challenges to yield performance improvement,” says John Hagel III, director, Deloitte Consulting LLP, co-chairman of the Deloitte Center for the Edge and co-author of The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion.

Discussions about closing the books that take place with, and are recorded by, social tools can provide CFOs with a trail of how and why a process was altered in the event they have to present an earnings report to investors or regulators

The value of identifying and being able to coordinate with subject matter specialists on a timely basis in a large multinational organization is not easy to measure. But the time saved by finance talent in avoiding duplication of efforts through improved communication and access could be measured by comparing pre-and post-social business implementation.

The same could be said for measuring productivity improvements from repeatable processes in decision-making.

“Applying social business capabilities to make close-the-books processes and decisions visible and recordable can create value by making talent more productive and efficient and by producing a more ‘intelligible’ process,” notes White.

“This process has the potential to be cheaper and faster and to provide more transparency into financial decisions by improving the institutional memory around how monthly, quarterly and annual earnings are generated,” he adds.

For example, discussions about closing the books that take place with, and are recorded by, social tools can provide CFOs with a trail of how and why a process was altered in the event they have to present an earnings report to investors or regulators.

“CFOs could perform sentiment analysis on the discussion threads and microblogs to understand the finance team’s views and see how the finance function may be moving toward adopting an emerging accounting standard, policy or revenue treatment,” says White.

Six steps to integrate social tools

“Because the mechanics of implementing a ‘social close the books’ – selecting  applicable tools and media, for example – fall outside of finance’s typical domain, it’s of high importance for CFOs to work closely with their CIO on both conceiving and putting into effect a social close the books process,” notes White.

The following are steps CFOs can take to integrate social business tools into the financial close.

Identify the business case. Achieving desired social software-driven business performance improvements requires clear objectives. “The business case here is that making the process more transparent, repeatable and traceable can improve productivity, efficiency and possibly time to close,” says White.

Identify the relevant social network. Social graphing, a technical process of identifying decision-makers, connectors, detractors, influencers and other users, can be an effective way to identify the people who are involved in the close-the-books effort as well as the information assets that touch the process. These are the people and assets that should form the social close-the-books network.

Identify areas for improvement social software can address. Organizational and operational constraints can impede any process. “These can be constraints of custom or habit, of organizational command and control structures or of technology. For example, the CFO’s team might serialize certain decisions due to previous collaboration constraints,” says White. Social software can help mitigate such constraints, but it’s important to identify them and take them into consideration when selecting social business tools.

Select the suitable social tools. Although many of social software’s capabilities may be relevant, identifying skillsets, maintaining institutional memory and pulling together distributed knowledge are typically the most important to the close. So work with the CIO to identify options and select the social software tools that address these criteria and other finance organization goals.

Incentivize the finance team to participate. “You want an incentive program that will get that social network to make full use of the social tools, including being able to demonstrate how it helps them to perform more efficiently, and rewarding them for doing so,” White observes.

Implement, build, test, tune, repeat. “Socializing the close-the-books effort requires integration of people, process and technology, so there are a lot of moving parts to the implementation,” notes White, “and the new process should be continually reviewed for improvements.”

“You implement it and evaluate the results, and then make improvements and implement the improved iteration, until you get it just right.”  

A key to rapid learning is to be explicit at the outset regarding the metrics that are both meaningful to the organization and that can be tracked in the short term.

For example, mean time to resolution of exceptions might be a metric that managers could track using social software platforms to determine if the platforms are yielding improvement in performance. If the initiatives are not yielding desired improvements, managers can fine-tune their implementation approach to drive better results.

Social business tools and techniques used in closing the books could also be applied to adjacent finance activities, such as planning, budgeting and forecasting or working capital management.

About the Author

This Deloitte CFO Insights article was developed with the guidance of Dr. Ajit Kambil, Global Research Director, CFO Program, Deloitte LLP and Lori Calabro, Senior Manager, CFO Education & Events, Deloitte LLP. For more information about Deloitte’s CFO Program, visit

Copyright © 2015 Deloitte Development LLC. All rights reserved.

Photo credit: Shutterstock


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