Professional Documents
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Enterprise Performance Management
Enterprise Performance Management
APRIL 2013
Enterprise Performance
Management
usiness today is moving at light speed. At the same time, organizations are
governed by stricter regulations requiring more stringent compliance. This
creates a demand for more informed decision-making and faster turnaround
PRESSURE ZONES
CFOs are under increasing pressure in specific financial areas. One of the many critical
ones is the financial close. Due to the global, round-the-clock nature of business today,
there is an increasing demand for shorter, error-free close periods. In fact, The Data
Directive, Economist Intelligence Unit survey, 2013, commissioned by Wipro Technologies, found that improvement in financial close management was rated among the top
two process areas for which CFOs say data creates a clear positive difference.2
Again, in a recent survey of CFOs regarding the financial close process, Ventana
Research, a research and advisory firm, found that completing the accounting cycle
quickly and accurately is a good measure of efficiency and more. Companies that
1. Top 10 Findings From Gartners Financial Executives International CFO Technology Study, John E. Van Decker,
Gartner, May 16, 2012. http://www.gartner.com/id=2018115
2 The Data Directive: How data is driving corporate strategy and what still lies ahead. Economist intelligence
unit survey, 2013, commissioned by Wipro
APRIL 2013
take six days or fewer after the end of the period to close their monthly, quarterly or
semiannual accounts demonstrate a basic level of effectiveness that those that take
longer do not, according to Robert Kugel, senior VP of research for Ventana Research.
Unfortunately, that kind of financial performance is starting to lag. According to Kugel,
companies in general take longer to close today than they did five years ago.3
Another critical area for CFOs is statutory reporting. Due to burgeoning regulatory and
compliance requirements, there are far greater demands for organizational transparency. Those demands as well as the difficulty in addressing them increase in scope
depending on the size of the organization, its business model and its global footprint.
However, such transparency can be facilitated through standardized compliance reporting methods deployed throughout an organization.
A third area of increasing importance is the planning, budgeting and forecasting
process. Due to the dynamic nature of business, and the need for agile business models,
there are greater demands for flexible budgeting and planning capabilities, incorporating both short-term and long-term driver-based financial planning. Such pinpointed yet
flexible budgeting requires tightly integrated financial and operational planning models.
EPM technology and processes are designed to address each of these areas of importance. Organizations that have older or under-performing EPM systems will benefit
from modernizing and optimizing that technology and those processes to target todays
Improvement in financial
close management was
rated among the top two
process areas for which
CFOs say data creates a
clear positive difference.
The Data Directive,
Economist Intelligence Unit
survey, 2013, commissioned
by Wipro Technologies
emerging challenges.
The Financial Close Measures CFO Effectiveness, Ventana Research, July 2012. http://robertkugel.
ventanaresearch.com/2012/07/02/the-financial-close-measures-cfo-effectiveness/
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APRIL 2013
EPM technology and processes address these challenges. The complicated process
An over-reliance on Excel
is an obvious problem
that a lot of companies
create for themselves.
Tanoop Gupta, General
Manager and Global Head,
Enterprise Performance
Management, Wipro
Technologies
of intercompany eliminations is one striking example. If you take massive corporations and you view the number of these intercompany transactions, eliminating each
one of those transactions is absolutely vital, otherwise it may result in incorrect numbers being submitted to, for example, the SEC, says Wipros Gupta. And how that is
addressed and how that is handled both from a business process standpoint and from a
technical implementation standpoint is another key benefit EPM offers organizations.
GREATER RESPONSIBILITIES
CFOs are also moving up the organizational responsibility chain, being looked at to
provide leadership in areas other than those traditionally assigned to the financial function, such as strategic planning, execution and performance measurement. For instance,
there is an increasing need to identify and execute viable and effective strategic plans to
enhance an organizations business agility, competitive posture and, ultimately, value.
The financial function is in a position to interpret and institutionalize those measures and actions. EPM technology and processes can help in that effort by enabling
CFOs to develop realistic strategic plans, measure performance against goals, and
monitor the progress of those actions on a regular basis, and then communicate this
information across their enterprise.
CFOs are also in a strong position to help accomplish two compelling, present-day
business imperatives: maximize profitability and enhance cost management. EPM
can help CFOs understand cost and profitability beyond the usual lines of business,
such as product lines, service areas and customer segments.
SUMMARY
Financial processes are driven by data, and the quality of that data is of the utmost
importance, especially as it relates to the changing role of the finance function in
most organizations.
EPM technology and processes, in conjunction with business intelligence efforts,
can help CFOs maintain a high level of quality regarding their financial data by
pointing out where that quality level falls short. According to Wipros Gupta, When
it comes to the data side, where BI gets involved, it is a rare EPM engagement that
does not reveal underlying data issues.
Business intelligence, analytics and information management technologies are
becoming more and more of a priority for todays CFOs because they address many
of the areas where financial operations are most vulnerable, and the areas where
CFOs increasingly need to focus to help advance their organizations. Savvy CFOs
need to champion initiatives to transform their finance functions and enhance their
organizations by aligning spending and organizational priorities through the use of
these powerful technologies and processes.
APRIL 2013