There can be no arguing the fact that business is facing a tough road ahead. However, the challenge lies in being able to recognize that even though many organizations across the globe are feeling the effects of the recession, the world is still a dynamic place, and presents many opportunities.
The economic climate is undoubtedly a taxing environment at present, but in the words of Albert Einstein, “in the middle of every difficulty lies opportunity”. However, in order to find opportunity in the current adverse situation, organizations need to have the right information available for financial clarity, automate and transform critical financial processes, and gain real time insight into cost structures.
In attempting to achieve these things, many enterprises face a few common challenges. Firstly, there is often a limited view of operational information, housed in disparate data stores, with different analytical tools and interfaces.
Secondly, while budgets may be able to be seen and accessed, organizations have difficulty in tying these back to key performance indicators and business drivers. Finally, analysis and reports from the business are not consolidated or connected into a complete and holistic view of the organization.
Implementing an integrated Financial Performance Management (FPM) system may go a long way towards solving these issues, as such a solution will help to consolidate operational information, organize data and enable reporting and analysis to be conducted from a single source, allowing for budgets to be tied back into real business drivers and providing data from the entire organization, not just from silos.
When implemented correctly, FPM will enable the organization to plan, forecast, adjust enterprise resources, manage profits and service levels, reduce labour costs and help the organization achieve high return on investment.
At the end of the global financial crisis, new leaders will have emerged through this transformation process, by building intelligence into management processes, starting with the finance department, enabling organizations to manage risk, cut costs, improve profits and drive cash flow.
FPM allows organizations to drive better business outcomes using the tools available, and provides the capabilities to measure and monitor Key Performance Indicators (KPIs), metrics and scorecards. Analysis and reporting tools enable the business to identify historic and future trends and anomalies, as well as plan processes and evaluate strategies. These capabilities give the finance department the ability to align with the rest of the organization, as they are relevant to all functions, not simply finance.
By driving finance actions such as sustainable compliance processes and elimination of redundancy, finance becomes the catalyst that pushes analytics and intelligence through to other functions and departments of the business, in turn driving intelligence throughout the organization, unlocking the value of processes and optimizing the business.
Collaborating and connecting all aspects of the organization, linking operations, finance and IT will have a high impact on the success of the business and provide quick and quantifiable payback.
Having a Performance Management (PM) solution that permeates the entire enterprise can provide deeper insights into data, which can in turn unlock new business value, by ensuring organizations can identify profitable customers, and serve them adequately, therefore maintaining these profitable entities. Targeted investments can also help to generate both savings and revenue that could in fact prove far more successful at producing returns than simply cost cutting alone.
Together, Business Intelligence (BI) and PM can drive smarter decision making processes, by delivering trusted information where it is needed, when it is needed, and driving effective auditable processes that lead to better business outcomes.
Having the information needed on demand enables enterprises to optimize business performance, unlocking the business value of information to deliver competitive advantage, and enabling businesses to take advantage of opportunities that may present themselves during the economic downturn. In this way, businesses can emerge at the other end of the crisis not only leaner and meaner, but significantly better off as well.