A Single Solution to Common Problems

Companies that leverage this shift in the business environment produce new products and services, enter new markets and operate their supply chains quicker and more effectively than their competitors do. Companies succeed in a business environment defined by convergence because they are able to aggregate the large amounts of financial and performance data scattered throughout their organizations so that the information is easily accessible, reliable and actionable. That “timely linkage” enables managers and executives to make fact-based decisions, solving existing problems, avoiding performance surprises and anticipating new threats and opportunities.

Inside companies of all sizes, the lines that once separated different functions and business are also fading. Business processes are becoming more integrated and operating across several functions – as opposed to operating within distinct “silos.” That change is evident in leading sales groups, which perform revenue forecasting, or on some shop floors where manufacturing professionals constantly interact with suppliers to ensure that material volumes jibe with the most recent sales forecasts. Disciplines and processes that once existed only within the finance function are moving into the rest of the organization.

Technology can enable the data integration and automation needed to support that sort of business process sophistication – if it is properly conceived, selected and implemented. As any finance manager can attest to, that caveat represents a major “if.” Too many companies have struggled with the technology that supports planning, budgeting, forecasting, modeling, financial consolidation, management reporting and analysis – the collection of activities that comprise business performance management.

Whether you are wrestling with spreadsheets, a homegrown system or previously purchased an application (or applications) that are not meeting the organization’s needs, the difficulties surrounding performance management tend to fall into several common problem areas:

Problem: Our performance management processes are unwieldy and disjointed.

Solution: Select a technology solution that inherently unifies the processes, functions and data.

While there are effective individual applications that support distinct performance management processes, those “point” or “suite” solutions come with drawbacks. First, those point solutions promulgate functional silos that impede sharing, collaboration and alignment. Second, those solutions hamper effectiveness and efficiency: users have to learn how to use several new applications and expend time and effort on synchronization and validation limiting the opportunity to simulate, adjust strategies, close gaps and seize opportunities. Third, “suite” solutions typically target a specific pain point; while that approach might solve the problem at hand, it does not provide the scale and flexibility to meet broader needs or to efficiently address multiple initiatives.

A cohesive “soup to nuts” performance management system, provides one window into performance and better clarity around key issues. It facilitates the development, execution and dynamic monitoring of viable performance improvement plans and supports the attainment of forward-looking financial projections.

Evaluate performance management solutions with a single interface and a single database that can access metadata and data from an organization’s entire data spectrum and then instantaneously amalgamate and deliver that information to a broad group of users accurately, transparently and how they need to see it. Equipped with those capabilities, decision-makers can confidently, quickly and easily gauge, adjust and steer their strategies and tactics in the most prudent way possible.

Problem: New technology implementations are disruptive and expensive.

Solution: Choose a performance management solution that matches the existing technology infrastructure.

A select few performance management solutions are designed to work with whatever technical infrastructure a company desires. Rather than bringing in yet another software package that doesn’t connect to standard business productivity tools, such as Microsoft Excel and Word, or readily fit in to standard technical protocols for optimization, back up and recovery, select a solution that complements your existing technology infrastructure.

Also, keep in mind that the demands on the solution will change consistently – and sometimes drastically. For that reason, consider the value of a solution that can support other initiatives and requirements; solutions that can adapt over time lowering the total cost of ownership and preventing the need for additional investments.

Problem: End users, particularly outside the finance function, have trouble learning new applications.

Solution: Select a solution with a single interface that is consistent with what end users already know.

The more a performance management solution’s interface looks and feels like something that end users already are familiar with, the higher the adoption rate and the better the ongoing utilization rates are. Few, if any, business tools are more familiar to end users – both inside and outside the finance function – than the trusted spreadsheet. Some 65 million Excel users appreciate its ease of use, flexibility, analytic power, universal acceptance and low cost. Excel is inadequate as an organization’s sole performance management solution; however, it serves as an ideal front end to a comprehensive performance management solution because the number of employees who can use the tool is beyond compare.

Problem: Governance and compliance requirements have placed new demands and pressures on our consolidation processes and technology.

Solution: Select software with deep and intrinsic transparency into the certification process and operations.

Sarbanes-Oxley contains a far-reaching set of rules that place several demands on a public company’s. It’s not just about the timeliness and integrity of the reporting, and it’s not just about knowing the enterprise. It’s about being able to steer the enterprise. An effective performance management solution should satisfy each of those demands which include:

• Real-time metadata and data access/updates;
• Role-based access and controls over financial information;
• Built-in workflow accountability;
• Integration of unstructured information such as comments and text files;
• Automated currency translations;
• Automatic error logging so the completeness, accuracy and consistency of the financial submissions can be confirmed;
• Seamless drill-to-source transaction transparency so corrective measures and potential trouble spots can be quickly and reliably pinpointed;
• Adaptability to manage change as it unfolds.

The degree to which a performance management solution satisfies those demands depends upon the ability to provide a single, unimpeachable version of the truth, the depth and breadth of the drill capabilities (can it quickly and transparently access data in numerous supporting systems?) and the comprehensiveness of the data manipulation and simulation and analytic capabilities.

Problem: Our biggest financial management pain today may not be our most acute problem spot six months from now.

Solution: Choose a solution that accommodates the dynamic nature of the current business environment and your company’s growth.

Change and growth are facts of life in business. As such, a corporate performance management solution should not limit you to a fixed structure, inter-relationships, level of detail, methodologies or processes. Today, budgeting may qualify as a major organizational headache, but financial reporting may be a bigger problem tomorrow – and, nine months from now, modeling may become a focal point. Plus, the performance measures a company tracks can change from year to year or, in some case, from quarter to quarter. Mergers and acquisitions and re-organizations occur with growing frequency, and companies need to launch operations in new geographic regions with increasing speed. That need creates others, including the need for ever-increasing scrutiny of finance and accounting processes.

Once the system is in place, is it flexible enough to adapt to those changing business demands and unique circumstances without starting from scratch? If the answer is no, the company will likely endure complex and time-consuming adjustments and accommodations from their software vendors and/or system implementers. An important question to ask of vendors is: what skill and experience levels are required to implement changes to the system? The more business users and non-programmers can implement the change without the need for outside experts, the better.

When selecting a solution, keep an eye on the long term while also searching for a tool that can address pressing issues. Many vendors trumpet their software’s “scalability.” But that term often obscures an equally important consideration: how easily the solution can be extended to address other business problems. If “scalability” requires purchases of additional modules and the time, cost and disruption of further implementations and upgrades, it may not be worth it. Instead, consider the solution’s “extensibility”: the ease with which the solution can adapt to new pain points, new challenges and new opportunities as they arise.

After all, the elimination of one pain point often acts as a catalyst for other initiatives in the enterprise, which in turn stimulate the emergence of new requirements from new groups of constituents.