Step One: Gather Data that Informs your Future Planning, not Data that Justifies it.
If you are like most CFOs, predicting the future is one of your biggest concerns. According to a study by CFO Research, in collaboration with SAP, not being able to anticipate future outcomes because of ever-changing business complexities was a top obstacle to strong financial management. But it’s often hard to sort out what data is critical to the future and how it can guide long-term planning.
RAMP Consulting, a SAP Enterprise Performance Management consulting company, believes that the key to smart management of your financial EPM (Enterprise Performance Management) software is identifying the best data points to inform business actions that are driven by a balance between corporate strategy and business unit objectives.
RAMP Consulting’s experience with clients from Fortune 100s to mid-sized companies gives them unique insight into how to effectively customize an EPM financial solution to fit any business. They employ a four-step process that helps clients gain greater enterprise-wide control through maximizing the value of EPM applications.
- Unveiling answers that provides future direction
- Gathering the right data
- Aligning corporate strategy with business unit objectives
- Adapting systems to rapid change
I don’t need more data, I’m swimming in information. What I really want is faster access to the right information that will help illuminate our biggest business opportunities.
Director of Finance – Health Services Firm
Unveiling Answers that Provide Direction
The smartest CFOs don’t use financial data to justify plans, they use it to guide direction. If you want to create EPM reports that unveil opportunities, not just confirm intentions, it’s important to begin with a baseline of future data gathering needs and an open mind.
Being free to explore possibilities often creates new areas of opportunity that many businesses don’t see coming because they are too busy handling day-to-day management and putting out today’s fires. The lack of informed long-term planning is the quickest way to get overrun by competition that is quietly carving out a future while effectively managing the present.
RAMP Consulting believes this balance is critical to implementing smart EPM financial solutions. Their partner, SAP, identified four key business benefits that can result from a well-researched, well-planned approach to implementing EPM financial solutions:
- Greater strategic alignment through synchronizing goals with initiatives and processes to access the information needed to improve performance.
- Improved visibility because all stakeholders own, maintain, and share information in context and in real time so they can identify areas for improvement
- Increased agility with improved business processes to speed performance management cycles and accelerate every stakeholder’s ability to execute on a commonly understood plan of action
- More confident actions thanks to consistent, trusted data for decision making and management reporting
TAKE THE FIRST STEP
The most important first step you should take in data gathering is a full, enterprise-wide evaluation of data that informs future opportunities. Engage management at all levels to think outside the box and envision what the company could look like in 5-10 years. At this early stage, encourage your business units to “play in the sandbox” because this exercise is not about meeting immediate informational needs to manage day-to-day operations or quarterly objectives, it’s about creating a vision for the future based on what you can uncover and start tracking today.
Ask corporate and senior management to imagine the company in 2020. Explore answers to the following questions, and then determine what data today will help enlighten answers in the future:
- What will our classic customer profile look like? Will it be different from the profile we service today?
- What new business disciplines might be in place that address customer concerns in 2020?
- What new products or services might we be offering?
- Will our revenue pie be sliced differently than it is today?
- Will new compliance requirements require different data reporting?
- Where will our next decade (2020 – 2030) of business growth come from?
In other blog postings, RAMP Consulting examines all the steps needed to create an effective EPM financial system that informs your present day success and future opportunities. If you want to learn more about those steps, click here. While many of these steps overlap on the metrics they provide, together they define the various components that determine the effectiveness of your financial EPM software solution.
If you want to learn more about the overall importance of smart data gathering for your organization and effective ways to maximize your financial EPM investment, download RAMP Consulting’s latest white paper, Smart Integrated Planning Starts with Smart Information Gathering.