Optimize Financial Processes and Systems for Better Business Performance

Today’s Agenda

Optimize Financial Processes and Systems
for Better Business Performance

Kelly Battles Paul Hamerman
CFO VP, Principal Analyst
Host Analytics, Inc. Forrester Research Inc.

© Host Analytics, Inc. 2010 Company Confidential

AGENDA
• Welcome & Introduction (10 minutes)
• Featured Speaker (35 minutes)
Paul Hamerman, VP Principal Analyst, Forrester Research Inc.
• Q&A (15 minutes)

Register! Three Part Webinar Series
Part I: TODAY - April 26, 2012 at 10:00PT
Optimize Financial Processes and Systems for Better
Business Performance
Part II: May 29, 2012 at 11:00PT
Unlocking the Value of Dynamic Financial Planning
Part III: June 14, 2012 at 10:00PT
Financial Consolidation & Reporting: Optimization Across the Enterprise

2

Host Analytics at a Glance
The Only Complete and Integrated Corporate Performance Management (CPM) Suite in the Cloud

• Integrated CPM Suite • Cloud/SaaS Delivery Model • World-class support and
 Budgeting  Low Total Cost of services
 Consolidations Ownership • Most innovative products e.g.
 Dashboards & Scorecards  Fast time to value/ ROI  Executive Report Manager
 Simpler implementations  Decision Hub
 Internal & External Reporting
 SEC Compliance


FEATURED SPEAKER

Paul Hamerman
VP Principal Analyst
Forrester Research Inc.


Optimize Financial Processes And Systems
For Better Business Performance

Paul Hamerman, Vice President and Principal Analyst, Forrester
Research

April 26, 2012

5 © 2009 Forrester Research, Inc. Reproduction Prohibited
2011

Agenda

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


Technology enables finance professionals to
improve efficiency, controls, and compliance
throughout the entire lifecycle of financial
processes.


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


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


Financial applications’ investment plans for 2012: There is
an uptick in activity over 2011

Don't know 2%
2%

Expanding or upgrading 25%
22%

Implemented, not expanding 39%
48%
Planning to implement within 1 8%
year 6% 2012
2011
Planning to implement > 1 year 8%
7%

Interested, no plans 8%
7%

Not interested 10%
8%

0% 10% 20% 30% 40% 50% 60%


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)?


Agenda

Trends and challenges in financial management processes
and technology
Aligning financial processes and information across
time dimensions to optimize business value



Recommendations


 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


The Financial Process Life Cycle (FPLC)

August 2011 “Align Financial Processes And Systems For Better Business Value And Compliance”

Financial Process Strategies Must Integrate Across Time
Dimensions



The time value of process measurement: information value
erodes at various rates



Report and comply Past

Challenges Best practices
 Batch-oriented interfaces  Single instance, global
 Disparate systems accounting system
 Complex accounting rules  Automated processes and
integration
 Time to close the books
 Cloud-based software
 Regulatory and internal
filing deadlines  Accelerated closing and
reporting cycles
 Internal controls and data
integrity  Automated reconciliations
and controls
 International operations


Measure and respond Present

Issues Best practices
 Cultural resistance to  Performance management
change culture
 What to measure?  Results-driven processes
 Accountability for results  Key performance indicators
 Timeliness of information and dashboards

 Fragmented systems and  Real-time information
data  Visibility into results
anytime, from anywhere


Plan and predict Future

Issues Best practices
 Business and market
volatility makes forecasting  Collaborative forecasting
difficult across business functions
 The budget process is a  Continuous planning
time-consuming process
 Spreadsheets are too often  Reduced budgeting
the solution to system gaps emphasis and effort
 Plans and budgets are not  Spreadsheets are within the
clearly linked to business
strategies planning app
 Link plans to strategies,
measurements and actuals


Agenda

and technology



Recommendations


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?


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


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

Agenda

and technology


Technology’s role in optimizing financial business
processes

Recommendations


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)


SaaS Buyers Cite Cost, Speed, And Better User Satisfaction
As Drivers For Adoption

May 2011 “The SaaS Market Hits Mainstream: Adoption Highlights 2011”


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


Agenda

and technology



Recommendations


Finance adds value in 3 key areas…
but struggles with processes and data
Executive Team

Consolidated view of cause and Consolidated view of
Driving overall success of
effects between individual functions
and how they impact financial results
business 3 impact on business
objectives

Human Resources Sales Manufacturing Research &
Development
Measuring business performance
Effective operational Productivity and
Managing resources
Forecasting future outcomes
execution 2 operational
insight
Finance

Capital planning, budgeting
System integration,
Accounting and financial reporting
Treasury and cash management
Cost reduction and efficiency 1 automation, and
Risk and compliance process efficiency

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.


Optimize Financial Processes and Systems for Better Business Performance

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