By Sujoy Choudhuri, Partner, PwC New York
Let’s face it: your CFO wants to have a seat at the table, advising and guiding the CEO on where to go next. To do that, he or she needs fast access to reliable data that tells a complete story.
In fact, better reporting is one of the hallmarks of a modern, agile finance organization, according to recent research from the American Institute of CPAs (AICPA) and Oracle. The research found that agile finance teams share three major characteristics:
1. Greater efficiency through automation
2. Better information to predict the future
3. More influence to drive business outcomes
Today, I see more finance organizations unleashing the power of information with the help of new cloud-based finance and reporting systems. These sophisticated new applications are dramatically elevating the role of financial planning and analytics (FP&A) teams, turning them into predictive powerhouses that generate the insights organizations need to innovative and improve performance.
One way to get better information—and predict better—is by standardizing your data. And this is exactly what moving your finances to the cloud helps you do.
On-premises environments are notorious for their lack of standardization. Your company’s planning and analytics apps, for example, may use a totally different data structure than the core financial system. And different business groups and regions might use separate methods for tracking the same types of transactions (such as receiving inventory from a vendor). This can create reconciliation headaches for financial analysts and lead to delays in supplying insights to decision-makers.
In an integrated cloud, planning and analytics apps share the same data model as the core financial system, so you can set up standard data structures and accounting methods across the enterprise. As a result, your information is more trustworthy, which allows you to make better decisions and generate better forecasts.
Once you remove the burden of data reconciliation, your FP&A team has more time to focus on what it does best: analyze trends and uncover insights.
Another way to get better information is to put it in context. The AICPA/Oracle report found that leading organizations excel at factoring non-financial KPIs into their financial decision-making. This is not a new concept, but too many companies struggle to execute on it. Often, key non-financial information—such as product performance data—is left out of the planning and analytics process. Predictions about the future suffer accordingly.
Here again, the presence of disparate systems and mismatched data structures is often to blame. Product codes and hierarchies, sales organizations and regions, logistics and pricing systems can be wildly out of sync. Finance organizations are challenged to merge that data into the ERP system to do accurate driver-based forecasting.
An integrated, standardized cloud allows you to bring the drivers impacting business performance into your financial system and present it to decision-makers in an easily digestible form. You can also integrate competitive information from external sources, such as data-as-a-service benchmarks, to create and track a wider set of key performance indicators.
We’re now seeing companies launch “digital command centers” to monitor a complete range of financial and non-financial KPIs. These advanced dashboards allow executives to make decisions and shift resources with unprecedented speed. You no longer need to wait until the end of the month to make a decision. Now you’re taking corrective actions daily.
Cloud technologies are giving new meaning to the concept of continuous planning. Yesterday, continuous planning meant once-a-month updates. Today it means instant revisions based on real-time information. What’s more, when you have complete integration between your planning tools and financial ledgers, you can execute your plans with greater speed and precision.
New social and mobile capabilities can also speed decision-making. For example, Oracle now embeds collaborative tools inside its ERP and EPM cloud applications, enabling managers to instantly message colleagues to resolve issues on the spot. And with more and more business data becoming mobile-enabled, managers are getting more done on the road. Cloud systems facilitate mobility by helping to establish that information is standardized and trustworthy when it’s pushed out to the field.
Finally, don’t forget about the power of artificial intelligence to streamline your predictive ability. Most of the companies I work with are on the cusp of harnessing AI to its potential, and I see more examples of how it’s helping companies innovate and make better decisions. In one recent case, we worked with a major automaker to crunch through hundreds of scenarios to figure out whether a ride-hailing service would be profitable in cities across the U.S.
Ready to become a predictive powerhouse? Start with better information. The key to getting it is by standardizing on a complete, integrated finance cloud. Then you’ll be on track to becoming a truly agile finance organization.
Sujoy Choudhuri is a partner in PwC’s Advisory practice specializing in ERP solution delivery. Over the last 18 years, he has helped clients address a variety of business transformation and integration/divesture needs across multiple industries. Sujoy’s solution focus centers on Oracle ERP-driven process transformations, application development and large scale implementations. He advises clients on how to best leverage technology investments, improve their processes and manage risk on complex engagements. He is currently leading one of PwC's most complex Oracle Cloud implementations and can provide pragmatic insights, innovation and thought leadership to your initiative. Connect with him on LinkedIn.