Unified Performance Management Boosts Performance of the Finance Department

Many companies are connecting corporate planning, financial consolidation, BI and analytics to make better decisions. However, most face daunting challenges ranging from manual and error-prone data integration to isolated, overly guarded data silos and software that is simply not suited to addressing the ever-growing demands of integrated performance management.

Corporate planning and management reporting are the most important processes for corporate control

Performance management includes core disciplines such as financial and operational planning, budgeting and forecasting, financial consolidation and close, including account reconciliation, external reporting and disclosure as well as internal (management) reporting and analytics. In many organizations, corporate planning and management reporting are central pillars of corporate management. They are therefore among the most important performance management processes. In addition to these core disciplines, it is above all topics such as ESG and sustainability (particularly in European companies), more comprehensive support for group accounting and increasing regulatory requirements that are currently presenting many companies with new challenges.

In order to meet increasing requirements and to obtain helpful steering information, companies must continuously optimize their finance and accounting processes. In addition to first-class software support, excellence in performance management also requires sound integration of the aforementioned disciplines and processes. As of today, for organizations, software support and levels of integration often do not reflect the importance of performance management for corporate management. Exemplary corporate planning in particular shows major deficits in this regard and often does not receive adequate software support. While integrated performance management is the foundation of comprehensive and data-driven corporate management, only one in ten companies has unified software for all key performance management processes today.

Performance management in dynamic times – a challenge for almost all companies

Only 4 percent of companies currently have no major performance management challenges. The main ones are inconsistent data, a lack of resources, inadequate software support and a lack of automation, which result in lengthy processes with considerable manual effort and poor results. Whereas large companies more commonly have problems in establishing a consistent set of data for corporate management, excessive manual effort and a lack of integration of performance management processes but also insufficient software support are the most frequent issues for mid-sized companies (see Figure 1).

Improved integration creates benefits and increases the efficiency of performance management

But why should organizations invest their generally scarce resources to better integrate their performance management processes and pursue an integrated approach? Improved integration generates extensive benefits. 69 percent of companies confirm that they have benefited from the integration (see Figure 2). Improvements can come in the form of a reduction in manual effort, better quality of data and decision-making, accelerated task and process handling and faster provision of information to decision-makers. If performance management is based on consistent and uniform data, this increases the quality of the results used for decision-making.

Unified software that provides integrated support for multiple performance management processes, like Prophix One, as an example, offers an ideal foundation for an integrated approach instead of using a bunch of various point solutions for specific use cases. However, software and technology are only one piece of the puzzle when it comes to the successful integration of performance management processes. Smooth interaction between all process participants is equally important, as well as clearly coordinated content and sufficient project resources.

Software for integrated performance management

Many companies are aware that effective performance management can only be realized with modern software. Modern performance management software has to support a wide range of tasks and functions and therefore is a decisive success factor for the beneficial implementation and support of integrated performance management. Storing all data centrally and consistently in one model as a hub for supplying all performance management activities is an important element for improving integration. This reduces effort considerably, increases data quality and allows relevant information to be delivered more quickly to decision-makers and updates to be carried out more frequently.

Within the software selection process, mid-sized companies in particular place great emphasis on criteria such as the price-performance ratio of a product, predefined data connection to source systems as well as the ease of use of a solution and its options for self-service-usage in business departments. Medium-sized companies are more dependent than large corporations on the fact that implemented solutions provide benefits as quickly as possible and generate a positive return on investment (ROI). The time-to-value factor is therefore crucial. Possible ‘project accelerators’ such as predefined interfaces and connectors to data-supplying systems as well as prebuilt solutions or data models for frequent use cases can make a decisive contribution to this and should therefore be taken into account in the selection process. Integrated solution marketplaces are a great way to centrally organize supplementary content and to present additional solutions, applications, content for industry use cases, etc. for users.

Conclusione

Better decisions in an increasingly complex and volatile world require better data and insights. They are gained through meaningful analysis based on well thought out plans and scenarios. Unified performance management supports decision-making by delivering reliable and relevant information for business management faster – a key factor in outperforming the competition.

Sound performance management in dynamic times is challenging for many companies. It requires continuous optimization and comprehensive software support as well as superior integration of all relevant performance management processes. Many companies confirm that they benefit from an improved integration, mainly through a reduction in manual effort, better quality of data and decision-making, accelerated task and process handling and faster provision of information to decision-makers.

For an integrated performance management approach, a unified software offers an ideal foundation. One single platform, with an example being Prophix One, a Financial Performance Platform, that relies on centrally stored data in a consistent data model, considerably reduces effort, increases data quality and consistency, may potentially offer cost savings and simplification and allows relevant information to be delivered more quickly to decision-makers. To achieve a maximum of business benefits from software support, organizations should thoroughly evaluate the products on the market, to find the best fit to their individual requirements.

Questo post è stato scritto in collaborazione con BARC.

Il Dr. Christian Fuchs è Senior Analyst e Head of Data & Analisi Research presso il BARC (Business Applicazione Research Center). È specializzato in sistemi di supporto alle decisioni nelle aree della gestione della Performance aziendale, della pianificazione aziendale, del Consolidato e dell'Analisi. È autore di numerosi studi BARC. In qualità di consulente, supporta le organizzazioni nel processo di selezione del software e nelle questioni strategiche riguardanti il portafoglio software, l'architettura e gli scenari di utilizzo.