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Finance Topics & Trends

Open Your Agency to a Cloud-based Financial Close Process

Citizens across the nation are quick to examine the financial spending patterns of their local and statewide government agencies. Fiscal accountability and taxpayer transparency are hallmarks of a well-run agency, and one way to achieve these benchmarks is through the implementation of cloud-based financial systems that have found favor in the commercial world. However, governments often overlook valuable business practices used in the private sector, despite the marked differences from the commercial realm. Fund accounting, encumbrances, GASB requirements and state-by-state regulations governing public finance all contribute to the differences. Likewise, budgeting in public sector is a dramatically different process. Public sector budgeting is both a policy setting and legal control device with different implications on how budgeting software applications are configured and used, while commercial entities use budgets for managing expenses and forecasting cash flow and profitability. Despite the difference, government agencies such as the city of Atlanta have adopted private sector solutions to dramatically improve the financial consolidation, reconciliation and close process. In particular, enterprise performance management (EPM) solutions address the following business functions: Budgeting, planning and forecasting Financial reporting, whether regulatory, management or citizen-facing Financial consolidation from different systems or departments Managing and streamlining the period close Managing exceptions, with reconciling sub-system or external system transactions Activity-based costing and cost analysis  Purpose- built applications widely used by the private sector can provide similar benefits to the public one.   Rather than using disconnected applications or spreadsheets, these private entities use Commercial off-the-Shelf applications from a variety of vendors (including Oracle) to support these processes. Current close processes can be inefficient. The majority of public sector customers lack a purpose-built application for financial consolidation and reconciliation, instead using inefficient manual processes, reports and spreadsheets. The majority must make manual adjustments during the close and reconciliation process. In short, there is great room for improvement. Oracle recently surveyed over 900 finance technology consumers, both Oracle and non-Oracle customers, to understand the value they received from using EPM cloud applications. The results were impressive: 33% of respondents who used EPM cloud increased their use of rolling forecasts 71% gained more visibility across the close process 79% reported a less complex close In addition, respondents who use account reconciliation were rewarded with instant visibility into the progress and status of reconciliations, reducing errors and speeding up the close process. Artificial intelligence and robotic process automation has been built-in to purpose built applications for financial consolidation, close and reconciliation is the introduction of new technologies such as artificial intelligence and robotic process automation. These emerging technologies can improve accuracy, reduce risk and streamline the entire financial close and reporting process. For example, a process that has eight steps now could be compressed to three steps with higher levels of automation. So what should public sector entities be thinking about? First, familiarize yourself with the purpose -built applications available today from Oracle and other vendors. You can start by looking at Oracle EPM Cloud, one of the most complete offering on the market. Second, examine inefficiencies in your current consolidation, close and reconciliation processes and think of areas for improvement. You’ll see how EPM applications can support changes in business processes that improve accuracy, efficiency and your ability to produce timely reports.

Citizens across the nation are quick to examine the financial spending patterns of their local and statewide government agencies. Fiscal accountability and taxpayer transparency are hallmarks of...

Product News

Oracle a Leader in Two Gartner Magic Quadrants for Enterprise Performance Management

We’re proud to announce that Oracle EPM Cloud continues to receive recognition from the analyst community. Gartner recently released its 2019 Magic Quadrant for Cloud Financial Close Solutions, and Oracle is once again positioned in the Leaders quadrant. Moreover, Oracle is the only cloud provider positioned as a Leader in both Gartner Magic Quadrants related to enterprise performance management (EPM); Oracle is also a leader in the 2019 Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions. We’re pleased to make both reports available to readers with our compliments. Figure 1: Magic Quadrant for Cloud Financial Close Solutions* Source: Gartner Magic Quadrant for Cloud Financial Close Solutions, Robert Anderson, John Van Decker, Greg Leiter, 21 October 2019. Figure 2: Magic Quadrant for Cloud Financial Planning and Analysis Solutions* Source: Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions, Robert Anderson, John Van Decker, Greg Leiter, 8 August 2019. *This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Oracle. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Accelerating the Financial Close The value that organizations can achieve with Oracle EPM Cloud became apparent in a recent survey. Among EPM Cloud customers surveyed: 73% achieved more flexibility in reporting 71% achieved greater visibility across the close process 71% reported making fewer manual adjustments 68% streamlined their close processes 44% saved time producing reports 20% reported taking less time to close the books The Value of Complete, Connected EPM 2019 marks the third consecutive year that Oracle has been named a Leader in both Magic Quadrants for EPM Cloud solutions. We believe this validates Oracle’s approach to EPM, which is to focus on a complete and integrated suite that offers both breadth and depth of functionality. Research indicates that customers are looking to seamlessly connect their enterprise performance management processes; our Value of EPM Survey found that: 70% of respondents want closer integration between planning and ERP systems 72% think it’s valuable to share an EPM platform between financial planning and analysis (FP&A) and controller teams 71% agree that the financial close would be more effective if tax and finance worked from the same software Oracle EPM Cloud has been designed with these goals in mind. It is the only complete and connected EPM solution on a common platform that addresses financial and operational planning, consolidation and close, data management, reporting, and analysis. It also offers native integration with other Oracle Cloud applications, including Oracle ERP Cloud, Oracle SCM Cloud, Oracle HCM Cloud and Oracle CX Cloud. With an integrated cloud suite across finance, supply chain, HR and customer experience—along with leading cloud infrastructure that includes Oracle Autonomous Database—Oracle helps customers to stay ahead of changing expectations, build adaptable organizations, and realize the potential of the latest innovations. Gartner writes, “We have spotted a new trend for ‘big stack’ core financial management vendors to integrate functionality for the FC [financial close]—and financial planning and analysis (FP&A)—more tightly into their offerings in order to support the office of finance. This trend may soon cause many application leaders to reconsider popular postmodern best-of-breed approaches and replace them with strategies favoring integrated single-vendor applications (see “Is Your Organization Ready to Move Away From a Postmodern Application Approach in Finance?”). We predict that, by 2023, 30% of organizations will use the financial consolidation capabilities, including accounting hubs, within cloud core financial management suites, which will reduce deployments of third-party tools.” (Gartner Magic Quadrant for Cloud Financial Close Solutions, Robert Anderson, John Van Decker, Greg Leiter, 21 October 2019, p. 1.) “The EPM Cloud market is maturing away from point solutions to effectively connect EPM business processes, improve business agility, and unlock the full value potential of EPM. We are seeing more organizations looking for an integrated EPM suite to connect their financial and operational planning with financial close and reporting processes,” said Hari Sankar, Group Vice President, Product Management, Oracle in a recent press release. “We are thrilled to be the only vendor acknowledged as a Leader by Gartner in both Magic Quadrant reports related to EPM.” Download the 2019 Gartner Magic Quadrant for Cloud Financial Close Solutions. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

We’re proud to announce that Oracle EPM Cloud continues to receive recognition from the analyst community. Gartner recently released its 2019 Magic Quadrant for Cloud Financial Close Solutions, and...

Finance Topics & Trends

5 Reasons Companies Change or Add ERP Functionality

There are many reasons why small and medium businesses (SMBs) look to change or upgrade their enterprise resource planning (ERP) systems. But five seem to bubble to the top of the list, according to a recent report published by Aberdeen—ERP Expectations for Small-to-Medium Businesses. Let’s take a few moments to discuss the five top reasons that growing companies look to change or add ERP functionality. 1. Take advantage of new features (55 percent of respondents). As a company enters new markets and pushes new product iterations out the door, ERP systems must handle exponentially increasing transactional volume, provide access to the right information quicker, and support new process requirements. Legacy systems will probably fall short.  The worst thing that could ever happen to a medium-sized business is to own an application that provides bad data to its internal users and customers. For example, if your legacy ERP system provides bad pricing data or inaccurate account balances to customers, it is time to make a change. Today customers can share their unhappiness with the world; therefore, you must have a trusted ERP solution to provide accurate and relevant information. Also, if faulty data is used for planning and forecasting, it is time to make a change. The world moves too fast for mistakes that result in excess inventory, not enough product to meet demand, or a missed a partnership/new market opportunity. 2. Ease of use (29 percent of respondents). Growing midsize companies recognize that their ERP solution must do the job and be easy to use. In 2016, the median age of the labor force was 42 years.  In specific industries, such as high tech, life sciences, advertising and public relations, retail, and internet publishing and video, the median age is much lower. This younger workforce may find newer software more attractive and even familiar, for the simple reason that these more modern technologies follow similar design patterns to consumer applications that most of us use every single day. Providing tools that are easy to use boosts employee engagement, and an engaged workforce directly correlates to employee retention. In addition, today’s consumer wants efficient and straightforward experiences. If your ERP solution cannot support a customer entry point such as mobile ordering or ecommerce site inventory look-ups or the ability to configure (and price) specific products, then those customers will look for a more modern vendor. 3. More flexibility (27 percent of respondents).  Flexibility supports profitable growth. But what is a flexible ERP system? There are three differentiators: Ability to add new functionality as needs change without any disruptive upgrades or enhancements. The result? A lower total cost of ownership (TCO). ERP solution must be able to handle different languages, currencies and accounting standards, manage multiple company sites, be implemented automatically, and run seamlessly. With competitive dynamics and the pace of change so quick in most industries, companies often do not know what their business model will be in the next 2-3 years. It's their ERP and other IT infrastructure that must support their ability to change and adapt. 4. Current performance is inadequate (26 percent of respondents). There are several warning signs that your ERP solution is not meeting performance standards. If users are relying on workarounds to perform their daily functions, then it is time to change. Increased transactional volume may slow some ERP solutions to a crawl. Are your employees submitting tickets for outages or for reports that are taking longer to run than typical or batch jobs that are not completing in the allotted time? If "yes," then it is time to make a change. 5. Incompatibility with emerging technology (20 percent of respondents). Companies in this situation should reconsider their entire IT and systems strategy. A cloud-based approach—one with a provider that can handle growth and integration support— is a viable solution. Emerging technologies may be a buzzword, but they are not a fad. Artificial intelligence (AI), machine learning (ML), and natural language processing (used in chatbots) are finding a home in ERP solutions across many different industries. They are game-changers in these industries and are being used (not just talked about) in many ways. So if your ERP solution cannot support AI to ….. it may be time to change. For more insight on the expectations midsize and medium companies should place on modern ERP systems, download our newest Aberdeen report.

There are many reasons why small and medium businesses (SMBs) look to change or upgrade their enterprise resource planning (ERP) systems. But five seem to bubble to the top of the list, according to...

Procurement

Oracle Transportation Management Ranked Highest in 4 Out of 5 Use Cases

The Gartner Critical Capabilities for Transportation Management Systems research evaluates 13 TMS solutions across 10 critical capabilities and five different use cases. Oracle ranked highest in critical capabilities across 4 out of 5 use cases. The capabilities analyzed in this research include core domestic capability, extended domestic capability, core international capability, extended international capability, usability/user experience, analytics/visibility, implementation/integration tools, adaptability/agility, carrier networks and simplicity. Download your complimentary copy of the 2019 Gartner Critical Capabilities for Transportation Management Systems. This report is a companion piece to Gartner’s 2019 Magic Quadrant for Transportation Management Systems which evaluates vendors in terms of completeness of vision and ability to execute. Oracle Transportation Management Cloud (OTM) is a comprehensive solution that spans the entire transportation process, across all modes and geographies. A complete and modern solution that supports end-to-end business processes, OTM Cloud has broad capabilities including sourcing and planning, routing, inventory visibility, modeling, fleet management and can easily integrate with IoT, machine learning, and other emerging technologies. Gartner, Inc., "Critical Capabilities for Transportation Management Systems"; Bart De Muynck, Brock Johns, Oscar Sanchez Duran; 22 May 2019. Gartner “Magic Quadrant for Transportation Management Systems” Bart De Muynck, Brock Johns, Oscar Sanchez Duran, March 27, 2019. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and is used herein with permission. All rights reserved. This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Oracle. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Download your complimentary copy of the 2019 Gartner Critical Capabilities for Transportation Management Systems.    

The Gartner Critical Capabilities for Transportation Management Systems research evaluates 13 TMS solutions across 10 critical capabilities and five different use cases. Oracle ranked highest...

Finance Topics & Trends

Outpace Change with Future-Ready Finance and Operations

In case you didn’t get the memo: The future has just arrived. You probably saw it coming but never thought it would actually get here. The Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), blockchain: Not long ago, all of these technologies were little more than buzzwords and thought experiments.   Meanwhile, rising consumer expectations are impacting every kind of business. Your customers have come to expect same-day deliveries, two days at worst, and every single order has to be right. Now people want to subscribe to your products instead of buying them. Your investors expect you to predict demand precisely and fulfill it just in time. And regulators expect you to trace all your ingredients back to their source to help troubleshoot supply chain issues and even save lives.  The best companies are learning to adapt to this “future-is-now” world – and quick. Outpacing change is no longer option. It’s a mandate for business survival and success.  New financial models  The problem with keeping up with the future is that businesses are constrained by legacy systems that can’t support the businesses model changes they need to survive. For example, most on-premises accounting systems aren’t equipped to handle the new world of “product-as-a-service” subscription models that require new revenue recognition capabilities tailored to this environment.  The cloud removes that obstacle. Oracle, for example, built a subscription-management capability into its ERP cloud to help companies sell products as services, if that’s what they need to drive their business forward.  These types of new cloud technologies also help enterprises successfully execute mergers and acquisitions. Cloud solutions have changed the M&A game, allowing new business units to be onboarded quickly and their books consolidated and closed just as fast. Predicting the future Take another example: In the not-so-long-ago world, maintaining a factory floor or enterprise asset used to be a reactive, timebound, scheduled activity. So when something broke, it was a big and expensive problem. But in the future-is-here world, companies are using machine learning to make predictions about when equipment is wearing out and then schedule repair and maintenance activities before anything breaks.   It’s clear that these formerly futuristic technologies are delivering a lot value for businesses and the people who work there. By the way, it’s not about taking people out of the equation but allowing them to shift to more value-added work. Instead of just managing transactions, they can focus on analyzing data and trends and making better decisions.  Business planning is so much better today in the cloud. This is largely because cloud solutions can integrate business planning, sales and operational planning, and supply chain planning all on one platform. Oracle’s unified data model, for example, can bring together core operational data with product info, with machine data, and now third-party data. When you integrate all that intelligence into your supply chain planning process, you now have the power to match supply and demand with unprecedented precision, creating a huge competitive advantage. One Oracle customer – a contract manufacturer for top brands such as Newman’s Own – leveraged a cloud-based demand management system to save 5-10 percent from inventory reductions while eliminating 50% of food waste. It turns out that matching supply with demand – a collaborative process we call “plan to produce” – can help you achieve valuable strategic goals like environmental sustainability.   No science project required Today there are a lot of vendors that are “playing” with AI, ML and IoT. The difference with Oracle is that it’s building real industrial strength apps based on proven, market-tested versions of these advanced technologies. One of Oracle’s financial management solutions, for example, comes with built-in machine learning that allows companies to detect financial fraud and anomalies and improve compliance.  More recently, Oracle delivered a blockchain app that you can use “out-of-the-box” to manage entire supply networks. This helps companies track and trace goods across the supply chain and provides complete trust and transparency for all parties.  Remember that IoT sensor data is great to have, but it’s only as good as what you can do with it – which is why it’s important to apply machine learning to your data feeds. Oracle leads the way in proven ML solutions that gives companies a clear vision of how to react to changing operational conditions.  In the future that is upon us, finance and operations will need to work in unison to help companies thrive with leaner inventories, more precise product costing, and more profitable product-as-a-service business models. The fundamentals of business haven’t changed – profitability still drives success – but the way to success will require enterprises to take a more future-leaning path.  Is your enterprise equipped to outpace change? Learn more about the future of Finance and Operations at Oracle OpenWorld 2019 and at Oracle.com/scm.

In case you didn’t get the memo: The future has just arrived. You probably saw it coming but never thought it would actually get here. The Internet of Things (IoT), artificial intelligence (AI),...