I attended a meeting where the focus of the discussion was on performance measurement for a financial reporting team. The objective was to determine one service result that the team would be measured on. As there is a schedule for the distribution of the monthly report, timeliness was top-of-mind. At the same time, accuracy is important because revisions cause delays. The tight correlation between accuracy and timeliness made the discussion interesting.
Accuracy and timeliness are quality attributes. It is ideal to have both. However, resource constraints pose a difficult choice at times. The trade-off between the two could raise intense debates. I would like to share five learnings from the discussion.
Schedule is fixed but use of time is flexible
Every month, this team has five days to complete the work. The work comprises data extraction, information gathering, and report preparation. The information gathering task is most time-consuming because the team relies on others to provide the data. The responsiveness of the information providers varies, making it difficult to get the report out early for review. Within the five days, however, there is room to modify the workflow to shorten the overall turnaround time and squeeze more time for review. In addition, the approach to do each task can be changed to drive more efficiency.
Accuracy is multi-dimensioned
Accuracy, in the perfect sense, is error-free. For the financial report, accuracy means that the figures reflect the most up-to-date situation of the company’s finances and the narrative is consistent. There should be no obvious typographical mistakes and incorrect interpretation of the results. Each type of mistakes has varying significance to the information presented in the report. Further, specific revenue or expense items could draw more attention because of their magnitude or the immediate focus of the business. Therefore, it is necessary to identify which aspects of accuracy is important for the task. Otherwise, time could be spent on minute flaws that don’t matter.
Implied ownership needs clear directions
Getting the work done by a defined deadline is achievable when there is ownership of the responsibility. This ownership implies a commitment to complete the work done by the due date with a standard of quality. This might be obvious for each job role and assignment. Nonetheless, emphasis could be placed on inappropriate aspects of the work. This misalignment affects accuracy and timeliness. For the financial reporting team, they view that getting the information in a timely manner is crucial to timeliness and accuracy. They see it as a hurdle to overcome. In fact, they overlook that it is the methodology that needs to be improved. The team needs clear directions on where they should focus their energy.
Trade-off is subjective
Timeliness and accuracy have opposing effects. Taking more time to hone accuracy could impact timeliness. On the contrary, getting the report out earlier with many errors doesn’t help anyone. Given the situation the team is in, the application it uses and the time available to do the work remain the same. The team felt that it is doing its best. Accuracy is a trade-off if the timeline must be met. From the manager’s perspective, he wants to achieve timeliness and accuracy. His view on trade-off revolves around balancing the effort necessary to obtain accuracy on the material items and getting the information providers to step up. Depending on the position and responsibilities, individuals have a different lens on trade-off.
The discussion brought forth many aspects that the manager and the team need to be aware of. The deep dive into the execution approach reveals areas that need attention. A superficial discussion would not have uncovered the relative significance of the known problems and their root causes, where the team should focus their energy and potential solutions. Execution affects timeliness and accuracy. As there are a multitude of ways to complete the work, what is in place might just need an overhaul. Any improvements would change the dynamics between accuracy and timeliness for the financial reporting team.
Is accuracy more important than timeliness? It is a question that you need to explore for your situation.
To learn more about how to select what is important to measure, download this free Guide on Performance Measurement.