Business process reengineering (BPR) was a consulting fashion in the early 1990s that spurred many companies to purchase their first ERP systems. BPR proposes a fundamental redesign of core business processes to achieve substantial improvements in market and customer responsiveness, productivity, cycle times and quality. Those early ERP systems provided a platform to manage cross-functional business processes with much greater flexibility and efficiency than had been possible in the past, partly because it took advantage of the commercialization of relational database technology, the graphical user interface, client-server networks and event-driven programming. ERP and other digital systems support business process reengineering by guiding the step-by-step execution of the redesigned process to ensure that it is performed consistently. They also automate the handoffs between individuals and departments as well as manage approvals and exceptions to accelerate completion of that process and permit supervisory personnel to spend more time focusing on matters that require their judgement and experience and less time on administrivia.
Topics: Office of Finance, Business Planning, Financial Performance Management, ERP and Continuous Accounting, Revenue, robotic finance, Predictive Planning, lease and tax accounting
Ventana Research defines intercompany financial management as a discipline for structuring and handling transactions within a corporation and between its legal entities. IFM is designed to maximize staff efficiency and accounting accuracy while optimizing tax exposure, minimizing tax leakage and ensuring consistent tax and regulatory compliance. Today, IFM is an obscure topic, but I assert that by 2025, one-half of organizations with 10,000 or more employees will have implemented intercompany financial management to achieve tax, risk-management and financial close benefits.
Topics: Office of Finance, Business Planning, Financial Performance Management, ERP and Continuous Accounting, Revenue, robotic finance, lease and tax accounting
The objectives of zero-based budgeting are well aligned with what I call integrated business planning, a technology-enabled approach to managing the forward-looking activities of a corporation including forecasting, planning and budgeting. IBP enables every business unit to plan their business in a way that makes sense to them but also makes the numbers in those plans available for company-wide planning, budgeting analysis and reporting. IBP combines operational planning and financial budgeting using models constructed around the things that managers manage, translating those elements into a financial budget. This approach can compress the time required to create and update operating plans from days or weeks to hours or minutes. Our Next-Generation Business Planning Benchmark Research found that IBP is a superior approach.
Topics: Office of Finance, Business Planning, Financial Performance Management, robotic finance, Predictive Planning
Unit4’s Financial Planning and Analysis (formerly Prevero) is a planning and budgeting application designed for the requirements of midsize corporations and the public sector. These organizations are challenged in buying software because they have almost all the requirements of larger enterprises but have a smaller budget and limited technical resources.
Topics: Office of Finance, embedded analytics, Analytics, Business Intelligence, Business Planning, Financial Performance Management, Price and Revenue Management, Digital Technology, ERP and Continuous Accounting, AI and Machine Learning, collaborative computing
Financial consolidation software assists companies in executing their accounting close process - especially those that use multiple ERP systems or have multiple legal entities - and with other characteristics that can complicate the process such as keeping books in multiple currencies. Not every midsize company needs consolidation software because many find their ERP (or financial management) software satisfies their needs. Our Office of Finance research finds that just 5% of midsize companies (which we define as those with 100-999 employees) use consolidation software to manage the process while 30% use their ERP system and another 51% use desktop spreadsheets either completely or to a significant degree. Using consolidation software can help shorten the close, especially when it substantially reduces the use of spreadsheets. Consolidation software supports the management discipline of continuous accounting.
Topics: Financial Performance Management, ERP and Continuous Accounting