optimize financial processes and systems for better business performance
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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 processesTRANSCRIPT
Decisions© Host Analytics, Inc. 2010 Company Confidential
Today’s Agenda
Optimize Financial Processes and Systems for Better Business Performance
Kelly BattlesCFO
Host Analytics, Inc.
Paul HamermanVP, Principal Analyst
Forrester Research Inc.
Decisions© Host Analytics, Inc. 2010 Company Confidential2
• 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 BetterBusiness Performance
Part II: May 29, 2012 at 11:00PTUnlocking the Value of Dynamic Financial Planning
Part III: June 14, 2012 at 10:00PTFinancial Consolidation & Reporting: Optimization Across the
Enterprise
AGENDA
Decisions© Host Analytics, Inc. 2010 Company Confidential
Host Analytics at a Glance The Only Complete and Integrated Corporate Performance Management (CPM) Suite in the Cloud
• Integrated CPM Suite Budgeting Consolidations Dashboards & Scorecards Internal & External Reporting SEC Compliance
• Cloud/SaaS Delivery Model Low Total Cost of
Ownership Fast time to value/ ROI Simpler implementations
• World-class support and services
• Most innovative products e.g. Executive Report Manager Decision Hub
Decisions© Host Analytics, Inc. 2010 Company Confidential
FEATURED SPEAKER
Paul HamermanVP Principal AnalystForrester Research Inc.
© 2011 Forrester Research, Inc. Reproduction Prohibited5 © 2009 Forrester Research, Inc. Reproduction Prohibited
Optimize Financial Processes And Systems For Better Business Performance
Paul Hamerman, Vice President and Principal Analyst, Forrester
Research
April 26, 2012
© 2011 Forrester Research, Inc. Reproduction Prohibited6
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
Recommendations
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited7
Technology enables finance professionals to improve efficiency, controls, and compliance throughout the entire lifecycle of financial processes.
© 2011 Forrester Research, Inc. Reproduction Prohibited8
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 time
© 2011 Forrester Research, Inc. Reproduction Prohibited9
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 systems
© 2011 Forrester Research, Inc. Reproduction Prohibited10
Financial applications’ investment plans for 2012: There is an uptick in activity over 2011
Not interested
Interested, no plans
Planning to implement > 1 year
Planning to implement within 1 year
Implemented, not expanding
Expanding or upgrading
Don't know
0% 10% 20% 30% 40% 50% 60%
8%
7%
7%
6%
48%
22%
2%
10%
8%
8%
8%
39%
25%
2%
20122011
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Financial process checklist: Do you have…
A flexible accounting platform that supports automation of financial business processes?
A mechanism in place to continuously track and report progress against defined business goals?
A planning process that supports continuous review and updating of budgets and forecasts?
A concise set of key performance indicators (KPIs) at the business unit level that correlate to process outcomes?
A commitment to continuous improvement of business performance and business process efficiency?
Technology to deliver integrated planning, accounting and performance processes in the context of time dimensions (past, present, future)?
© 2011 Forrester Research, Inc. Reproduction Prohibited12
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
Recommendations
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited13
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 practices
© 2011 Forrester Research, Inc. Reproduction Prohibited14
The Financial Process Life Cycle (FPLC)
August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance”
© 2011 Forrester Research, Inc. Reproduction Prohibited15
Financial Process Strategies Must Integrate Across Time Dimensions
August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance”
© 2011 Forrester Research, Inc. Reproduction Prohibited16
The time value of process measurement: information value erodes at various rates
August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance”
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Report and comply
Challenges Batch-oriented interfaces Disparate systems Complex accounting rules Time to close the books Regulatory and internal
filing deadlines Internal controls and data
integrity International operations
Best practices Single instance, global
accounting system Automated processes and
integration Cloud-based software Accelerated closing and
reporting cycles Automated reconciliations
and controls
Past
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Measure and respond
Issues
Cultural resistance to change
What to measure?
Accountability for results
Timeliness of information
Fragmented systems and data
Best practices
Performance management culture
Results-driven processes
Key performance indicators and dashboards
Real-time information
Visibility into results anytime, from anywhere
Present
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Plan and predict
Issues Business and market volatility makes forecasting difficult The budget process is a time-consuming process Spreadsheets are too often the solution to system gaps Plans and budgets are not clearly linked to business
strategies
Best practices
Collaborative forecasting across business functions
Continuous planning
Reduced budgeting emphasis and effort
Spreadsheets are within the planning app
Link plans to strategies, measurements and actuals
Future
© 2011 Forrester Research, Inc. Reproduction Prohibited20
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
Recommendations
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited21
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?
© 2011 Forrester Research, Inc. Reproduction Prohibited22
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
outcomes
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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 Monthly
© 2011 Forrester Research, Inc. Reproduction Prohibited24
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
Recommendations
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited25
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)
© 2011 Forrester Research, Inc. Reproduction Prohibited26
SaaS Buyers Cite Cost, Speed, And Better User Satisfaction As Drivers For Adoption
May 2011 “The SaaS Market Hits Mainstream: Adoption Highlights 2011”
© 2011 Forrester Research, Inc. Reproduction Prohibited27
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 context
© 2011 Forrester Research, Inc. Reproduction Prohibited28
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
Recommendations
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited29
Finance adds value in 3 key areas…but struggles with processes and data
SalesHuman Resources Manufacturing Research & Development
System integration, automation, and
process efficiency1
2 Productivity and operational
insight
Consolidated view of impact on business
objectives3
Finance
Executive Team
Capital planning, budgetingAccounting and financial reportingTreasury and cash management
Risk and compliance
Cost reduction and efficiency
Measuring business performanceManaging resources
Forecasting future outcomes
Effective operational execution
Consolidated view of cause and effects between individual functions
and how they impact financial results
Driving overall success of business
© 2011 Forrester Research, Inc. Reproduction Prohibited30
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.