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Financial performance management (FPM) aids effective decision-making


Few areas impact the performance of your organisation as forcefully as the
ability to effectively make decisions, writes Desmond Botha, financial
solutions specialist at Fios.

It 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
Through integration, your organisation becomes a cohesive organism. Each
division, be it finance, sales, marketing, HR or IT, strengthens each
others' operations and decision-making, and will ultimately impact on the
entire organisation's performance.
In the case of the Office of Finance, this is particularly true. Today this
department, more than any other, does a fragile balancing act. On the one
hand it must focus on checks and controls in order to adhere with regulatory
requirements, and on the other it must be a business partner, advising
organisational decision-makers on future directions, performance and
Finance is no longer a 'bean counter', it is a critical part of
organisational longevity and is crucial to optimal decision-making.
Indeed, it is expected to lead organisations through change, uncertainty,
volatility and complexity. Finance's value-add is, therefore, not about
achieving marginal improvements on its own productivity but 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.
Information feeds organisational decision-making. In the case of the Office
of Finance, it enables it to consolidate results, report and analyse,
determining what has happened and predicting what will happen to the
As the custodian of shareholder value, finance needs dynamic tools to
achieve and maintain its fragile balancing act while also executing short-
and 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).
And when you drill down even further, spreadsheets 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) offers the tools that enable
companies to harness information with relative ease that, coupled with deep
analysis, will enable them to understand their financial challenges and
readily respond to them.
It 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, regardless of the volume of the data or frequency with
which the data changes.
The reality is that manual management with spreadsheets is onerous, time
consuming and prone to errors, and expose the finance executive to risk.
With an automated solution such as FPM tools, risks are minimised while
out-of-the-box functionality is utilised to cater for all complexities
around enterprise-wide consolidation.
Importantly, manual systems are not easily adaptable whereas an automated
solution responds to change effectively and timeously.
Coupled with executive buy-in, FPM can provide the Office of Finance and,
importantly, the organisation, with a solution that will allow for
decision-making that will weather storms, readily responding to challenges
with financial processes that will guide the company to calmer waters.