By Alok Ajmera, President and Chief Operating Officer, Prophix Software
Half a century ago, the first electronic spreadsheet – LANPAR – was introduced to replace paper-based bookkeeping ledgers and make business management more efficient and effective. It was a great tool at the time, but 50 years later more than two-thirds of companies still use a clunky spreadsheet-based approach to corporate performance management (CPM) that is painfully inadequate for today’s complex real-time business operations, sophisticated financial processes and onerous planning needs.
Besides Woodstock’s Summer of love, 1969 gave us the first microprocessor, the UNIX operating system, the first ATM, the birth of ARPANET, the debut of the 747-jumbo jet, the first test flight of the Concorde and a baby named Jennifer Aniston. She’s still around but the Concorde and 747 are retired, and the Internet, microchip and UNIX are unrecognizable from their humble origins. The world has moved on and so must corporate performance management.
Modern software tools that incorporate machine learning and analytics enable financial professionals to move beyond spreadsheets and into a new level of operational sophistication. They accelerate and streamline budget management, automatically pulling in data in real time data from a myriad of systems, enabling the creation of comprehensive, insightful forecasts and plans.
Streamlining Financial Data Results
Automating these CPM processes frees finance teams from the tedious, time-consuming and error-prone tasks of manually collecting data and moving it from spreadsheet to spreadsheet, workbook to workbook in order to generate actionable insights. With data collection and report generation automated, finance teams become value generators rather than number crunchers. They can focus on applying the insights their data provides to business operations, increasing competitiveness, improving profitability, minimizing risk and driving results.
For example, with meaningful access to data in real time, finance professionals can build dashboards that provide comprehensive, easy-to-understand holistic views of performance. This is the Holy Grail of one true picture of the company. What is working, what isn’t working, and what will and won’t work in limitless what-if scenarios?
This one true picture is essential to simplify analytics, streamline workflows, and ensure optimal data governance across the organization, which is of course essential to financial teams in meeting compliance requirements.
Automating and integrating the planning process can eliminate the back-and-forth hunt for numbers and reduce the time to generate plans from months to days. Integrated financial planning also serves to break down silos and fosters collaboration, giving financial teams a more complete and uniform picture of the organization, which enables management to make smarter decisions. Where will more resources create a better return, and where would they be non-productive?
But despite the clear cost-benefit and enhanced profitability that automated CPM provides, most businesses continue to slog along in a spreadsheet world, consigning finance professionals to what is essentially non-strategic busy work. Often, by the time data is collected, scrubbed and combined, and reports are generated, the opportunities and risks that management needed to address are long gone. Consequently, leadership teams are stuck in a “good-enough” cycle. As long as the company isn’t in the red, financial performance is good enough. By re-thinking the approach to enterprise performance management – investing a little time and effort to update that process — financial officers can provide an extensive new level of insight into the health of the company.
Driving Business Decisions through Trusted Insights
Data is the key to unlocking hidden value and risk in customer relationships, but the data most firms use to manage their own performance is often locked in kludgy home-grown systems. But it’s not enough to collect the data. You have to be able to do something useful with it. For most companies, it’s difficult if not impossible to collect and synthesize their data into meaningful business insights in time to do anything about them. As a result, the relatively small percentage of firms that have automated CPM have a huge competitive advantage. This is true whether data operations are on-premise, in the cloud or a hybrid of both.
Different companies have different choke points. By automating CPM, business leaders can identify those choke points in real time and make better decisions about managing their operations faster to create better results. Adapting CPM to operations gives management operational information and analysis much faster, enabling to cut costs and increase effectiveness by managing staffing levels better, reducing administrative burden, closing the books earlier and getting more useful information to sales teams.
Now apply that capability to the financial planning process. Instead of starting to collect guestimates several months in advance, automating financial planning with a modernized approach and sophisticated software tools, gives organizations greater insight into their company performance – a shared picture across the whole organization that leads to reduced risk and better business results.
The business environment is constantly evolving. Businesses that fail to adapt are flying noisy, fuel-gulping 50-year-old 747s while their more-nimble competitors are winning today’s race with the equivalent of super-sophisticated 787-Dreamliners.
FIVE REASONS WHY YOUR BUSINESS’ PROCUREMENT TEAM SHOULD BE USING A CONTRACT MANAGEMENT SYSTEM
By Daniel Ball, business development director at Wax Digital
Even in today’s digital-first environment some businesses are still storing documents, such as contracts, in filing cabinets making it labour intensive to retrieve, manage and even identify important paperwork. In fact, it is calculated that poor contract management practices are costing companies an average of nine percent of their annual revenues.
Moving to a contract management system online can speed up the retrieval process and help decrease the amount of time and resources required to manage contracts. Using a CMS companies can create an online database to centralise information and store documents. Not only does this help ensure contracts are well managed and kept up-to-date, but it can also help businesses save up to 20 percent of overall costs per year.
From legal departments overseeing regulation compliance to finance teams ensuring payment deadlines are met, contract management technology benefits many areas of an organisation. So, how can a good CMS help your procurement team?
How will a good CMS help your procurement team?
The number of suppliers your procurement team must oversee varies depending on the size of your business. It’s not uncommon for large enterprises to be working with thousands of suppliers at one time. A CMS will use automation to record, manage and streamline data, providing procurement teams with important contract details including time and location information, as well as real time alerts such as contract breaches.
Here are five reasons why your business should be using an online contract management platform:
- Increased spend visibility
Using a CMS can give procurement professionals full visibility of suppliers, including the company name and location of where a product is coming from and in what quantity. This transparency will also help contribute to the risk management strategy of your business as it enables you to spot vendors who may be prone to environmental, economic and political uncertainty. In the current environment, for example, suppliers’ may have decreased or ceased production due to COVID-19 or could have been heavily impacted by the negative price of oil, making visibility increasingly important for businesses.
- Eliminates maverick spend
Centralising and streamlining contract documents will ensure that buyers can instantly access up-to-date information to see if a contract already exists. This helps buyers avoid simple and common mistakes that often occur when using manual filing systems, such as onboarding new vendors when existing agreements are in place with another supplier.
- Keeps track of contract renewals
It’s easy to forget about contract renewals or sign up for another term without ending an existing agreement, especially when using a traditional filing system. Businesses using an online CMS can set up renewal alerts in advance, allowing buyers sufficient time to source new vendors or negotiate better prices.
- Improves spend management
A centralised database means that all negotiated prices, contract conditions and other important transactions can be accessed in one place, making it easier to analyse spend. A CMS can help identify discrepancies, find where contract violations have occurred and deal with any associated problems.
- Adhering to regulatory and legislative compliance
It’s important to ensure that all suppliers are meeting the terms of their contracts. A CMS will automatically audit supplier information, meaning that any failures are immediately raised to procurement teams. The platform will also provide notifications if any new data is required or updates need to be made, avoiding potential legal issues.
It’s clear that using an online CMS will benefit your business and procurement teams by increasing spend visibility, enabling access to up to date information, ensuring contracts are closely monitored while contributing to the reduction of unnecessary spend. So, now’s the time to stop relying on those dusty old filing cabinets and start using a CMS.
PROTECTING YOURSELF AGAINST A RECESSION
James Turner, Director at Turner Little
The coronavirus outbreak has spread to businesses, leaving many around the world counting costs. Notoriously, known as the Great Lockdown, it’s been affecting the world economy since early this year. The predicted recession is considered to be the steepest economic downturn since the Great Depression.
So, what does that mean for you? James Turner, Director at company formation specialists, Turner Little, suggests “While there’s no fool proof way to ‘recession-proof’ your finances, establishing a solid base now will put you in a better position to weather the storm.”
“Whilst the future of the global economic landscape is simply too complex to predict, it’s not hard to spot imbalances that have built up, as central banks and governments around the world talk about introducing further fiscal stimulus and monetary expansion, the consequences could be significant,” adds James.
A good wealth management agent will recommend starting by saving a substantial cash emergency fund in a high-yield savings account, understanding your spending habits and where you could cut back if you needed to, and establishing your long-term investing strategy now, so you can stick to it.
If you were to solely invest based on the inevitability of a recession, you are likely to miss returns that are immediately available. If you truly want to recession-proof your assets, the best thing to do is develop a long-term strategy and invest wisely.
Diversification still matters
It’s dangerous to pile all your investments into a single sector, including consumer staples. Diversification is especially important during a recession when particular companies and industries can get hammered. Creating a diversified portfolio of assets blended across asset classes—such as fixed income and commodities, in addition to equities, sectors, geographies and strategies—can also act as a check on portfolio losses.
Build a reserve
To keep your money protected before, during and after a recession, it’s recommended to have an income generation conversation with a financial advisor. This will cover a lot of different topics, but one of the most important is the emergency fund. You’ve likely heard many times that it’s good to have between three and six months’ worth of living expenses set aside in the event of a job loss, health crisis, or other unforeseen circumstance.
Protect your assets
If you’re interested in talking about protecting your assets and your investment portfolio, do get in touch. We specialise in creating bespoke solutions for individuals and businesses of all sizes. The knowledge and expertise of our specialists will be able to assist with any enquires, no matter how complex.
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