Today’s financial services organisations have to contend with far more than their counterparts did just a few years ago: From digital native competitors to growing customer demands, to increasing regulatory requirements, these companies have to ensure that their financial systems can not only keep pace with change but can provide the flexibility and innovation they need to stay competitive.
Many are turning to their Enterprise Performance Management (EPM) solutions to help them access real-time data and insights, support their business strategy, and mitigate risk. EPM solutions provide a unified planning and consolidation solution that can help financial services organisations meet their goals while streamlining statutory and reporting requirements.
When done right, EPM implementations in financial services organisations can allow teams to assess the impacts of specific transactions, product mix changes, or client interactions, as or before they happen. They can rapidly analyse how events can drive changes to the company’s Balance Sheet, P&L, Capital, Resources (Human Capital), Risk-Weighted Assets, and Liquidity while also having the ability to run multiple what-ifs and other scenarios that guide business strategy.
Financial Signalling
For decades, executives have had to deal with delays in getting insights into key data and KPIs due to the volume and complexity of the financial close. This is mainly because financial close processes have been established over time following a strict period-end process to first gather data from multiple sources and then validate and consolidate that data to provide the required combined view in financial reports.
Often, data cannot even be viewed until the month-end close and the consolidation process is complete. That also means any forward-looking decisions must wait. The end result is that those delays lead to decisions being taken too late, leading to missed opportunities. In a world where financial services organisations have to stay ahead of customer needs – and their competitors – operating this way simply isn’t efficient or effective.
Unfortunately, the concept of closing the books every day and instantly sharing consolidated financial results with stakeholders is not feasible for most financial services organisations. Doing so is especially infeasible when the transactional data is sitting in multiple GL/ERP, CRM, HCM, and other systems.
An effective EPM solution helps decision-makers access key data on revenue, costs, customer orders, and working capital on a weekly or even daily basis in the form of “financial signals”. This level of analysis can provide much earlier visibility into actionable insights to drive performance and remove unnecessary and costly delays while waiting for the financial close to complete.
The Benefits of EPM
Gaining the benefits offered by an Enterprise Performance Management solution is a little more complex than just implementing the software. The solution must enable full integration with multiple data sources and have rigorous validation and control. This helps ensure that the organisation can leverage the intelligence that’s immediately available without building from scratch.
In addition to integrating large volumes of transactional data from a variety of sources, the EPM solution should align that data with book-of-record financial data and the dimensional structures understood by business users. This should be made available for analysis by controllers, executives, line-of-business managers, and analysts through interactive dashboards and other data visualisation and analysis tools.
Financial services companies have much to gain from ERP systems, including multi-dimensional insightwhich allows for timely, fact-based decisions through ready access to historical, real-time, and predictive data. However, in a fast-paced, innovation-driven market, it’s not just about making the right decisions. It’s about continuously re-evaluating those decisions based on empirical feedback and then quickly making adjustments—whether it’s a bit of fine-tuning or a wholesale change in strategy. In addition to delivering rich insight, EPM solutions can enable speed and frequency of change.
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