Achieving Comprehensive Financial Planning and Analysis without Outsourcing
In arguably all multinational organizations, financial planning and analysis processes are almost always performed ineffectively. This is one of the reasons why many CFOs are looking into outsourcing transactional elements of their finance process in an attempt to save more, reduce their total cycle time, and improve their strategic financial planning.
There are still many CFOs of course that remain skeptical in outsourcing as many finance processes are judgment based and requires high business value context.
This article is not meant to discuss whether or not outsourcing is better for certain companies or not. Instead, this article will endeavor to discuss another option for those CFOs that are apprehensive about outsourcing but want to improve their strategic financial planning or those that want to achieve comprehensive financial planning and analysis internally without outsourcing the processes.
Financial Planning and Analysis activities are typically divided into 4 categories:
- Financial Planning
What drives strategic and planning decisions are financial data. Because the finance department performs budgeting (which involves creating budgets for all business units and monitoring of expenditures) and forecasting (which involves creating and adjusting forecasts based on certain external market factors), finance is expected to participate in company-wide strategic plans because of the nature of their activities.
- Management Reporting
This activity is one of the most time consuming activity for finance teams. Many get sucked into repetitive administrative tasks around creation and updating of management reports.
- Business Decision Support Activities
This set of activities mean different things to different companies. There is not a single standardized list what this entails although it generally means any activity that is meant to provide insight to decision makers as they try and make decisions. Examples of this type of activities are activity-based costing and pricing analysis among others.
- Specialized Activities
This involves highly specialized activities within the finance department such as real estate management or risk management.
Improving without Outsourcing
The main selling point of many outsourcing vendors is that they can drive standardization and process automation across the financial planning and analysis processes. Outsourcing vendors in order to address some CFOs´ apprehension offers both technology and knowledge capabilities to their clients.
As mentioned earlier, there are still CFOs that are skeptical about outsourcing and that is okay. There is another option – Adoption of a Corporate Performance Management solution like Performance Canvas by DSPanel in order to drive centralization, standardization, and process automation internally without outsourcing. This is the best way to still attain an effective and comprehensive financial planning and analysis without entrusting your tasks to another company.
The CPM space has seen a lot of maturity over the years. Many, if not all, of the CPM vendors out there have understood that in order for CFOs and their finance departments to accept a new solution, the technology solution must be easy to deploy, use, and maintain, reasonably priced, and it must contain all the necessary features for their finance functions.
As the CFOs continue to learn their obstacles in achieving an effective and comprehensive financial planning and analysis, their demands have grown higher. This in turn, have forced all CPM vendors to shape up in order to address these articulated needs. CPM vendors now understand that to achieve an effective and strategic financial planning, they must have a robust technology and they must be knowledgeable enough in this arena in order to give out financial planning and analysis tips and tricks or FP&A best practices.
Performance Canvas Solution Actual Case
Case: A leading provider of EDM Solutions in the US realized the advantages of Standardization and Process Automation through Performance Canvas Solution adoption
The Situation: A leading provider of EDM solutions spend a lot of time fixing errors as their previous process involved roll ups from the smallest, most granular level budget groups to which they rolled up right to the next level and the level beyond that and this is just one of the many error-laden tasks they have.
Additionally, they also did not get any good reports especially that they were not allowed to make instant changes in the reports and it was too tedious for them to do allocations.
Other problems include:
– A very manual and error-prone planning and reporting process
– Too much time needed to prepare management reports and presentation
– Disparate financial systems used
The Solution: The company decided to look at Performance Canvas by DSPanel due to recommendations by consultants and after searching around for possible solutions. Soon after they finished deploying the solution, the company saw that they have now accomplished the following:
– They can now perform allocations multiple times as it is very easy
– They have seen improved business-insight report standardization
– Reduced time spent in preparing management reports from hours or sometimes days to just 10-15 minutes and it goes straight into their PPT presentation
– Increased forecasting accuracy
– Cost savings – as they have more time now to focus on value-added tasks
DSPanel offers cutting edge technology platform for business analytics, planning, and visualization. DSPanel designs, builds, and operates with the end users in mind. Performance Canvas was created by DSPanel to answer the unarticulated needs of the market not addressed by previous available solutions. With Performance Canvas, information is transformed into valuable business insights for the business executives to utilize in their decision-making process. DSPanel currently has over 2500 organizations deploying their solutions.
