5 Steps to Agile Finance

5 Steps to Agile Finance

January through March can be a stressful time for Finance executives and professionals. With the year-end close, regulatory filings, audits, and tax work, there are constant deadlines and limited time to spend on new initiatives.

But now that the dust has settled on the 2014 year-end, spring is a great time to start improvement initiatives and consider new processes and systems that can help Finance improve its agility and value-add to the rest of the organization.

With that in mind, here are five recommendations, or steps you can take to create a more agile and productive Finance organization in 2015:

Step 1 – Reduce Reliance on Spreadsheets

Microsoft Excel is a great personal productivity tool, but when organizations rely on it to support corporate processes – such as budgeting & planning, financial reporting, or complex financial modeling – its shortcomings become evident. These include limited scalability, lack of security, no controls, no workflow, and high risk of errors.

Many organizations that have outgrown spreadsheets have successfully implemented packaged enterprise performance management (EPM) applications to replace spreadsheets and improve the accuracy and reliability of their financial reporting and planning processes. And some of the leading EPM solutions allow users to leverage Excel as a front-end to their EPM applications, taking advantage of their Excel skills, but with a more secure and scalable back-end.

Step 2 – Leverage Cloud-based EPM Solutions to Accelerate Time to Value

When it comes to EPM, new applications are increasingly being deployed in the Cloud. In fact, Gartner and Forrester and other IT analyst firms see the cloud as the primary model for EPM applications over the next 3-5 years. The primary reasons for the accelerated adoption of cloud-based EPM solutions are the benefits cloud EPM offers vs. on-premises solutions – namely, faster time to value and lower cost of ownership. While cloud-based EPM is especially attractive for small and mid-sized organizations, its adoption is also increasing in large enterprises, according to Gartner.

Here’s an article referencing a Gartner report on cloud adoption of CPM solutions.

Step 3 – Streamline the Financial Close

The ability to improve key financial processes is one of the key benefits of moving from spreadsheets to packaged EPM software solutions. An important one for improving Finance agility is the financial close process. Companies that are able to reduce the financial close and reporting process from 25 days to 5 or 10 days can deliver financial results faster internally. This, in turn, allows more time for review and analysis before reporting results to external stakeholders. And many are finding that faster delivery of financial results to external stakeholders can also be beneficial – especially when the news is positive.

Step 4 – Adopt Dynamic Planning Processes

With the pace of change in business constantly accelerating, organizations can no longer rely on static budgets to guide their investment and resource allocation decisions. So while most companies still have an annual budget, they’re putting less reliance on the budget and augmenting it with rolling forecasts on a quarterly or even monthly basis. This allows them to review actual results vs. the original plan and incorporate the actuals, along with updated forecasts from management, into their projections for future periods. This more dynamic approach to planning is critical to being able to respond quickly to changing business conditions and to reallocate resources as needed to capitalize on new business opportunities.

Step 5 – Embrace Mobile Technology

Lastly, most managers now have mobile smartphones or tablets, but many don’t fully leverage these for business purposes. This is a great opportunity for Finance to embrace mobile technology to deliver financial as well as operating results and KPIs on a timelier basis to key executives and managers. You can even go beyond mobile information delivery to enable mobile workflow and approvals for budgets and forecasts, as well as data entry via mobile devices. This is a great way to improve the agility of the organization and for Finance to be a true business partner to line of business executives and managers by delivering critical information anytime, anywhere.

Where to Start?

For small or mid-sized organizations that are growing rapidly, Step 1 and 2 in this sequence are critical to improving Finance agility and having more scalable business processes. But whether you focus your improvement efforts on the financial close or the budgeting & planning process depends on your own situation and priorities. Adopting mobile technology can be done in parallel with the financial close or planning process steps, or it can be focused on after the fact as a next step.

Many companies have already taken some or all of these steps to improve the agility of their Finance organizations. To learn more about these best practices and the benefits our customers have achieved from adopting them, feel free to visit our customer case studies and videos.

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