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Optimize Financial Processes and Systems  for Better Business Performance
 

Optimize Financial Processes and Systems for Better Business Performance

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Trends and challenges in financial management processes and technology ...

Trends and challenges in financial management processes and technology
Aligning financial processes and information across time dimensions to optimize business value
Best practices in achieving better business performance
Technology’s role in optimizing financial business processes

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    Optimize Financial Processes and Systems  for Better Business Performance Optimize Financial Processes and Systems for Better Business Performance Presentation Transcript

    • Today’s Agenda Optimize Financial Processes and Systems for Better Business Performance Kelly Battles Paul Hamerman CFO VP, Principal Analyst Host Analytics, Inc. Forrester Research Inc. © Host Analytics, Inc. 2010 Company Confidential
    • AGENDA• Welcome & Introduction (10 minutes)• Featured Speaker (35 minutes) Paul Hamerman, VP Principal Analyst, Forrester Research Inc.• Q&A (15 minutes)Register! Three Part Webinar SeriesPart I: TODAY - April 26, 2012 at 10:00PT Optimize Financial Processes and Systems for Better Business PerformancePart II: May 29, 2012 at 11:00PT Unlocking the Value of Dynamic Financial PlanningPart III: June 14, 2012 at 10:00PT Financial Consolidation & Reporting: Optimization Across the Enterprise 2 © Host Analytics, Inc. 2010 Company Confidential
    • Host Analytics at a GlanceThe Only Complete and Integrated Corporate Performance Management (CPM) Suite in the Cloud• Integrated CPM Suite • Cloud/SaaS Delivery Model • World-class support and  Budgeting  Low Total Cost of services  Consolidations Ownership • Most innovative products e.g.  Dashboards & Scorecards  Fast time to value/ ROI  Executive Report Manager  Simpler implementations  Decision Hub  Internal & External Reporting  SEC Compliance © Host Analytics, Inc. 2010 Company Confidential
    • FEATURED SPEAKER Paul Hamerman VP Principal Analyst Forrester Research Inc. © Host Analytics, Inc. 2010 Company Confidential
    • Optimize Financial Processes And SystemsFor Better Business PerformancePaul Hamerman, Vice President and Principal Analyst, ForresterResearchApril 26, 20125 © 2009 Forrester Research, Inc. Reproduction Prohibited 2011
    • AgendaTrends and challenges in financial management processes and technologyAligning financial processes and information across time dimensions to optimize business valueBest practices in achieving better business performanceTechnology’s role in optimizing financial business processesRecommendations6 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Technology enables finance professionals to improve efficiency, controls, and compliance throughout the entire lifecycle of financial processes.7 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Financial business process challenges  Fragmented and inflexible transactional systems  Lengthy process to close the books – Complex procedures and batch interfaces  Increasing compliance burdens (e.g., SOX, XBRL, IFRS)  An unstable and dynamic global economy complicates planning and forecasting efforts  Labor-intensive efforts to assemble external financial reporting and regulatory filings  Giving senior executives relevant information on financial and business performance at the right time8 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Key trends for 2012:Financial management systems  Budgeting and forecasting remain top business priorities, due to economic instability  Closing to report to file is seeing more investment as an end-to-end process solution  SaaS financial solution adoption will grow rapidly  Flexibility, usability, and mobility drive technology selection more than functional requirements  Regulatory compliance drives continued investment in financial systems9 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Financial applications’ investment plans for 2012: There isan uptick in activity over 2011 Dont know 2% 2% Expanding or upgrading 25% 22% Implemented, not expanding 39% 48% Planning to implement within 1 8% year 6% 2012 2011 Planning to implement > 1 year 8% 7% Interested, no plans 8% 7% Not interested 10% 8% 0% 10% 20% 30% 40% 50% 60% 10 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Financial process checklist: Do you have…A flexible accounting platform that supports automation of financialbusiness processes?A mechanism in place to continuously track and report progress againstdefined business goals?A planning process that supports continuous review and updating ofbudgets and forecasts?A concise set of key performance indicators (KPIs) at the business unitlevel that correlate to process outcomes?A commitment to continuous improvement of business performance andbusiness process efficiency?Technology to deliver integrated planning, accounting and performanceprocesses in the context of time dimensions (past, present, future)? 11 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Agenda Trends and challenges in financial management processes and technology Aligning financial processes and information across time dimensions to optimize business value Best practices in achieving better business performance Technology’s role in optimizing financial business processes Recommendations12 © 2011 Forrester Research, Inc. Reproduction Prohibited
    •  The Financial Process Life Cycle (FPLC) ► The continuum of integrated financial management activities, spanning planning, management, reporting, and control ► A concept to help to understand the relationship among key financial management processes and to move these processes toward best practices13 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • The Financial Process Life Cycle (FPLC) August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance” 14 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Financial Process Strategies Must Integrate Across TimeDimensions August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance”15 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • The time value of process measurement: information valueerodes at various rates August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance”16 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Report and comply Past Challenges Best practices  Batch-oriented interfaces  Single instance, global  Disparate systems accounting system  Complex accounting rules  Automated processes and integration  Time to close the books  Cloud-based software  Regulatory and internal filing deadlines  Accelerated closing and reporting cycles  Internal controls and data integrity  Automated reconciliations and controls  International operations17 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Measure and respond Present Issues Best practices  Cultural resistance to  Performance management change culture  What to measure?  Results-driven processes  Accountability for results  Key performance indicators  Timeliness of information and dashboards  Fragmented systems and  Real-time information data  Visibility into results anytime, from anywhere18 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Plan and predict Future Issues Best practices  Business and market volatility makes forecasting  Collaborative forecasting difficult across business functions  The budget process is a  Continuous planning time-consuming process  Spreadsheets are too often  Reduced budgeting the solution to system gaps emphasis and effort  Plans and budgets are not  Spreadsheets are within the clearly linked to business strategies planning app  Link plans to strategies, measurements and actuals19 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Agenda Trends and challenges in financial management processes and technology Aligning financial processes and information across time dimensions to optimize business value Best practices in achieving better business performance Technology’s role in optimizing financial business processes Recommendations20 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • How’s business? Not a simple question! Performance information should answer the following key questions:  Which performance measures represent the true health of our business?  How are we doing now relative to the goals, objectives, and plans set forth in our corporate strategy?  How are we doing now relative to our achievements and measures in prior periods?  How are we doing now relative to our peers and competitors?  Why do our performance results differ from what we expected?  What are we going to do, in terms of corrective actions and alternative strategies to improve our performance results?21 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • What are “good” key performance indicators (KPIs)?  Relevant: meaningful, few in number and in the right business context  Accountable: assigned to specific individuals, backed by rewards  Aligned: linked to corporate strategies and rewards  Easy to use and understand: based on a formula that is comprehensible and enhanced with visual cues and graphs  Actionable: triggers a process or event to determine the cause and correct the problem  Accurate and timely: based on reliable data and delivered in the appropriate time frame  Predictive: focus on leading indicators to anticipate business outcomes22 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Drive information time value based on business needs  How frequently will decision-makers look at the performance measures?  What are the process transaction volumes, cycle times, and frequency rates?  Do you have the technology to plumb the performance information at high rates of frequency? Or is the cost too high in terms of effort?  How perishable is the information? Real-time Daily Weekly Monthly23 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Agenda Trends and challenges in financial management processes and technology Aligning financial processes and information across time dimensions to optimize business value Best practices in achieving better business performance Technology’s role in optimizing financial business processes Recommendations24 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Technologies driving innovation in financial processes  Cloud/SaaS  Business-driven flexibility  Big Data platforms  Mobile apps and tablets  Interactive usability  Web services integration  Collaboration tools (e.g., social)25 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • SaaS Buyers Cite Cost, Speed, And Better User SatisfactionAs Drivers For Adoption May 2011 “The SaaS Market Hits Mainstream: Adoption Highlights 2011”26 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Financial systems in the cloud – benefits  Business people manage the system, including processes, business rules, and reporting structures – Business flexibility improves  Systems are upgraded and updated regularly – reduced obsolescence  Less dependence on internal IT for systems support  Transparent cost of ownership via subscription model  Modern integration technology allows more frequent updates and better connections to internal and external stakeholders  Business insight delivered quickly and in context27 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Agenda Trends and challenges in financial management processes and technology Aligning financial processes and information across time dimensions to optimize business value Best practices in achieving better business performance Technology’s role in optimizing financial business processes Recommendations28 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Finance adds value in 3 key areas… but struggles with processes and data Executive Team Consolidated view of cause and Consolidated view of Driving overall success of effects between individual functions and how they impact financial results business 3 impact on business objectivesHuman Resources Sales Manufacturing Research & Development Measuring business performance Effective operational Productivity and Managing resources Forecasting future outcomes execution 2 operational insight Finance Capital planning, budgeting System integration, Accounting and financial reporting Treasury and cash management Cost reduction and efficiency 1 automation, and Risk and compliance process efficiency 29 © 2011 Forrester Research, Inc. Reproduction Prohibited
    • Recommendations  Assess the health of your financial systems and processes.  Modernize your systems via cloud and mobile solutions.  Integrate processes to improve information value across time dimensions.  Put a framework in place for performance measurement and results accountability.30 © 2011 Forrester Research, Inc. Reproduction Prohibited