Management

Financial performance management (fpm) for effective decision-making

Desmond Botha, Financial Solutions Specialist, Fios

Few areas impact the performance of your organisation as forcefully as the ability to effectively make decisions. I t is a critical business- enabler that not only influences your bottom line but also leads to more good decisions. However, to realise effective decision-making, you have to integrate the way your organisation functions: consolidating reporting, analysis, planning and measurement across the enterprise.

Through integration, your organisation becomes a cohesive organism. E ach division, be it finance, sales, marketing, HR or IT, strengthens the others’ operations and decision-making, and will ultimately impact on the entire organisation’s performance.

Today, the finance department, more than any other, does a fragile balancing act. O n the one hand, it must focus on checks and controls to adhere with regulatory requirements, and on the other, it must be a business partner, advising organisational decision-makers on future directions, performance and opportunities. Finance is no longer a ‘bean counter’, it is crucial to optimal decision-making. I t is expected to lead organisations through change, uncertainty, volatility and complexity. Finance’s value-add is about ensuring the longevity of an organisation and its various divisions and, importantly, lessening the effects of decline by seeking new opportunities that will fill the void.

As the custodian of shareholder value, finance needs dynamic tools to achieve and maintain its fragile balancing act while also executing shortand long-term plans. With the right tools, the financial department can secure a single, accurate corporate view of company information.

Spreadsheets have, for years, been the de facto business and personal productivity tools of choice. They are familiar, comfortable, easy to use and readily formatted and customised. They can manipulate a variety of data; perform reasonably complex calculations; and be used for planning, budgeting and forecasting on individual and departmental levels.

However, as businesses grow larger and more complex, so do their business plans and analyses. Despite the general-purpose utility of a spreadsheet, it is inadequate when it comes to providing a sole solution for cross-enterprise consolidation, budgeting and forecasting and, significantly, corporate performance management (CPM). They lack workflow and approval mechanisms; they can’t aggregate data from thousands of users, offer minimal security; and inhibit data integrity and accuracy.

Financial Performance Management (FPM) provides a single source of the truth, mitigating the need to manually gather data and input it into spreadsheets by easily importing data from a number of core systems (ie, general ledger, enterprise resource planning (ERP), spreadsheets themselves, and corporate databases), presenting all the data in one place.

Manual systems are not easily adaptable, whereas an automated solution responds to change effectively and timeously. FPM can provide the office of finance and, importantly, the organisation, with a solution that will allow for decision-making that will readily respond to challenges with financial processes that will guide the company.

tel: 011-7935673
email: desmondb@fios.co.za