In today’s regulatory environment, timely, accurate and comprehensive information is more critical than ever. While traditional business intelligence (BI) solutions have dominated the corporate environment based on their ability to quickly query, access and then report on information, they often lack the processes and metrics needed to measure and manage business performance. As a result, business performance management (BPM) solutions are gaining momentum as a more complete way to address the need for financial transparency and provide users with a means to act on information.
“Companies are starting to realize that traditional business intelligence is not enough to improve business performance,” said Crispin Read, Chief Marketing Officer at Cartesis, the world’s leading specialist in finance and business performance management software. “BPM solutions are filling this gap, allowing companies to achieve faster, more flexible planning cycles and to gain deeper financial insight.”
BPM: A More Integrated Approach to BI
Business Intelligence solutions unlock critical management information and attempt to put that information in front of decision makers who need it to run the business. However, one of the challenges with BI tools has been that the data that they do unlock isn’t always consistent across the enterprise. For example, BI tools can’t add up revenue numbers in different currencies because they lack the financial intelligence to translate from one currency to the other.
Another area where business intelligence solutions have fallen short is in addressing the requirement for financial transparency, one reason some traditional BI vendors have acquired BPM vendors for financial and performance management capabilities. The need for such transparency is greatest within finance departments where specific challenges demand just one set of numbers and ideally one set of applications. Whereas a business user of a BI query tool is generally satisfied with the content he gets and how this helps him look into defining next week’s stock ordering, the group controller or CFO needs the most accurate, real-time information for mission-critical functions such as budgeting, planning, compliance with financial reporting regulations, and performance improvement.
BI infrastructures have also become increasingly complex and costly, with large corporations managing dozens of silos encompassing OLAP databases, data integration tools, reporting tools and query and reporting analysis tools.
Evolving perfectly to address these BI challenges is BPM with its more integrated, holistic approach.
“Performance management is sort of changing the mindset of BI and moving it away from the spot approach where five or six reporting tools are involved,” said John Van Decker, Senior Vice President and Principal Research Fellow at the Robert Frances Group, an IT research and advisory firm based in Westport, CT.
Accuracy and Control
Beyond transparency, BPM systems, such as the Cartesis 10 business performance management suite, ensure the consistency and accuracy of information that finance departments need to meet the requirements of external stakeholders and legal/regulatory bodies. Financial information can’t be used if it isn’t 100 percent accurate, and there is tremendous cost if it is inaccurate, including the potential for criminal charges against the CFO and other employees. And with so much riding on the accuracy of a company’s numbers, finance departments need greater control over the budgeting and reporting processes — and the ability to look deeper into the numbers.
“Companies have to report accurate numbers; if they don’t then they are in breach of a number of laws, and penalties will come down on the companies and the people who work for them,” Cartesis’ Read said. And accuracy is not only mission-critical for financial consolidation and statutory reporting applications but for planning, budgeting and forecasting, he said. “If you don’t know at the end of the month if you are over budget or under budget, then you are flying blind and you’ll crash the company.”
Once a corporation is certain it has accurate information, getting that information to key decision makers quickly is vital. Cartesis 10 employs a single data model that ensures one source of accurate, consistent data between applications, as well as between the people and business processes involved. The suite also provides auditing controls to allow the finance department to easily review and verify every accounting step from source to disclosure.