The Challenge: Disconnected Systems and Processes
Stumbling Blocks to Successful BPM
The premise of Business Performance Management (BPM) is simple: companies can optimize performance by setting goals, monitoring progress against those goals, and quickly reacting to change. Companies that embrace BPM are able to consistently
achieve ambitious objectives, easily identify unexpected trends, and respond advantageously to outpace their competitors.
What are the keys to achieving such performance?
The processes at the heart of BPM are well-known—they are the standard processes managed by most ﬁnance organizations. Budgeting establishes the goals, reporting and variance analyses monitor progress and detect change, what-if scenario analyses evaluate potential actions, and re-forecasting begins the cycle again by establishing new goals.
If the premise and processes are so straightforward, why are most companies unable to achieve exceptional performance?
Most companies engage in all the appropriate steps—they budget, report on a monthly or quarterly basis, perform variance and what-if analysis, and periodically reforecast. However, many companies have not linked these steps together into an integrated, uniﬁed ﬁnancial management process.
Each process—budgeting, reporting, analysis, forecasting—is conducted by a separate group, with independent spreadsheet-based models that pull data from diﬀerent back-end systems.
Consequently, the majority of companies face signiﬁcant inefﬁciencies and redundancies in their ﬁnancial processes, resulting in long cycle times, high error rates, unnecessary expenses, and suboptimal decision making.