If you’re a typical finance professional, only about 30% of your productive work is carried out using your accounting software. This means there are a whole lot of emails, phone calls, spreadsheet work and other tasks that are taking up most of your time and energy. Not great.
In my role I talk to a lot of finance professionals, mostly discussing IT systems. Invariably many of them tell me they really want to spend less time crunching the numbers and more time providing analysis, generating insights and delivering a service that brings real value to the business.
The important thing to know is that your finance and accounting system will never be able to do all the things you need to do to achieve your goals. It may be hard to believe but the core technology tool used by finance professionals throughout the world is not up to the job.
Finance staff spend most of their time immersed in spreadsheets, creating models, extracting data, doing v-lookups and the like. It is no surprise that finance professionals are some of the most proficient users of Microsoft Excel of all the business domains. However, for a CFO it’s not a comfortable feeling to go into a board meeting relying solely on these spreadsheets.
One of the problems is that many finance teams still see themselves as separate from the business. However, these days we live in an interconnected world, and it is now more important than ever that Finance understand the business, its culture, its systems and processes and its broad strategic goals. Without a strong grasp of the ways in which Finance relates to and impacts on other areas of the business, the role of Finance will forever be limited. Much to the organisation’s detriment.
This is where corporate performance management (CPM) tools come in. These tools are becoming mainstream (and highly valued) within finance departments, particularly with those that are struggling with information overload. CPM applications are in effect decision support tools. The chances are if you haven’t heard of CPM, you are being left behind.
Ideally your current CV will show that you have implemented, and have gained proficiency with, CPM tools. In your next job interview, simply declaring that you are really good with Excel is not going to cut it.
If properly implemented, your CPM will enable you to provide instant feedback whether at a board meeting, providing feedback on why a variance has occurred or giving the rationale for making decisions. It will provide an auditable single source of truth for accuracy and control across the whole organisation improving data integrity and subsequent budgeting and forecast reliability.
In terms of your CPM investment, how much should you spend? A rule of thumb is to spend at least as much as you did on your accounting system. This may sound extreme, but keep in mind that this system is covering the huge whitespace outside your accounting system where real value is realised.
Don’t wait till you are last on the bus. The time to explore CPM is now.
You can read more about Professional Advantage and CPM here.
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