Did you know that enterprise performance management (EPM) systems provide decision-quality information in real time while reducing your operating costs and optimizing your finance processes?
Here’s how!
Emerging technologies are booming, and they are already connected to our daily lives. With globalization, tailored customer service, low-cost operations and data overproduction, the time for Industry 4.0 has definitely come. Just think about the Internet of Things (IoT), big data, machine learning and numerous other advanced tech innovations which, not so long ago, seemed futuristic.
This new reality is upon us and moving fast. Faced with ever-transforming competitors, companies tend to reinvent themselves. New digital ventures offer clear benefits for those in a position to claim them. But these major changes bring about their share of uncertainty.
Québec companies are lagging in terms of digital transformation and automation of business processes. An article from Les Affaires magazine recently reported that only 25% of Québec companies have automated their processes compared to 75% and 55% in Germany and the USA, respectively (Manufacturier 4.0: le retard du Québec menace les exportations, French only)
The Finance function is no exception. Finance has been slow to take the strategic role expected from upper management. Moving from a transaction-processing, historical-reporting role to a cross-departmental role providing value-added, decision-quality information in real time to decision makers can be daunting. In such circumstances, investing in advanced finance systems poses a risk for managers.
“Several managers developed a mental block about the transformative effects of the digital revolution, claiming it is ‘too big’ or ‘seemingly inaccessible’.” (Les Affaires, April 20, 2019, p. 8.) However, those who are resistant to digital technologies and the automation of the Finance function are at risk of disappearing or falling behind their competitors. Companies who submit their historical reports late are less attractive to investors and creditors.
Nonetheless, the digital revolution is well underway. Companies undergoing transformation via improvement and automation of the Finance function enjoy significant advantages.
A good practice before implementing an information system is to conduct a thorough review of business processes. Several processes can be improved without massive investment in technology. Finance processes, for their part, have known little progress over the years. Due to limitations in capital, investing in logistics or market positioning opportunities hinders the questioning of the Finance function’s role and efficiency.
To bridge those gaps, many companies choose low-cost, poorly integrated manual solutions or obsolete technologies for back-office service. This results in cumbersome, complex and ill-equipped finance processes. The cost of their transactional operations remaining high, the Finance function cannot take the expected performance leader role and provide decision-quality information to decision makers in real time.
The meticulous optimization of finance processes brings several benefits when performed during the implementation of an information system. It results in the reduction of transactional costs and the collection of data conducive to providing the required decision-quality information. The return on investment is enhanced by the full potential of management reports. Among other things, the improvement of financial process performance aims to:
In a labour shortage environment, another significant benefit is the opportunity to redefine work and assign employees to non-repetitive, diverse and challenging tasks. Continued efforts in change management allows capitalizing on stable human resources and reducing uncertainty in regard to labour shortage.
For example, let us quote Donald LeCavalier, Senior Vice-President of Finance at TC Transcontinental: “The reorganization process had cost between $10M and $15M. Today, the finance department costs approximately $7M less than 10 years ago; it’s an excellent return on investment. Now we submit complete financial statements in time. The interco entries were endless end-of-quarter struggles. But now it only takes a few hours. ” (Comment « optimiser » la fonction finance? French only)
Financial information forms the basis of business decisions. In a globalization and fierce competition environment, decision makers look for relevant data, accessible in real time, that they can easily interpret. It becomes essential to place the update of decision-quality information at the heart of financial system implementations. Centralized and standardized data are the ingredients of such implementations, just like processes. And enterprise performance management (EPM) systems that integrate key data are their actual motors.
Centralizing data enables an ongoing access to the information without interference from intermediaries (“one version of the truth”). Integrated data provides accurate information in real time. The automation of processes results in reliable and timely data, which limits the risk of error.
As for management reports, retrieving data readable from an ERP system is a tedious task performed by an IT department that only understands part of the needs. Generally, Finance retrieves these reports, runs them through Excel routines and takes pride in displaying repeatable pivot tables, without mining, and without absolute confidence in the quality attained/delivered. Those days are over!
Dedicated finance software such as EPM systems facilitate the creation of reliable reports that structure, in a concise manner, mineable data in real time from source systems. Decision makers can thus use reports by playing around with the different dimensions (periods, clients, products, services, etc.), by creating scenarios, and by instantly refreshing the results linked to the actual data. It saves precious time! Decision-quality information, accessible in real time!
Too often, companies with several divisions ask their managers to submit – in independent, uneasily integrated Excel worksheets – their operating budget, human capital forecasts, and needs in capital expenditure. The responsible person in Finance has to collect all those data, often under various versions. There is a huge risk of error, and the updates are long and painstaking. The volume of documents generated is high. The Excel worksheets are massive, and they multiply the formulas. We’re talking weeks and months of work!
A performant EPM software simplifies and optimizes your budgeting process. Managers work collaboratively within the same system. Excel integrations and changes implemented bring about instant results. The risk of error is greatly reduced, low-value-added tasks are eliminated, and the execution of the process takes a few hours, rather than several days. These software offer a complete integration with Excel and your information systems, not to mention the functionalities that can help you mine your various activities.
Performant EPM software also support complex consolidation and reconciliation processes, advanced budgeting and forecasting solutions, and they simplify the financial close process. They also boast functionalities such as:
A wide range of EPM software can help improve the financial performance of businesses. Guided by our vast experience in management systems, our many partnerships with industry leaders, and our field expertise in financial performance improvement, we favour three complete and convenient systems: Oracle EPM Cloud, BPC and SAC from SAP, and Workday Adaptive Planning.
A cutting edge EPM solution will improve the performance of your company and will provide you with decision-quality information in real time while reducing your operating costs and optimizing your finance processes. For more details contact us or visit our Financial Performance Improvement page!