Artificial intelligence (AI) and machine learning (ML) have revolutionized many industries, but the field of financial planning & analysis (FP&A) has been slow to adopt this technology.  Despite the numerous benefits AI – and more specifically, ML – can bring to Finance (e.g., increased efficiency, accuracy and strategic insights), many organizations still hesitate to implement either in their FP&A processes.  What’s holding FP&A back from reaping the vast benefits of ML?

To answer this question and more, this blog will explore some of the challenges holding FP&A back from fully embracing ML and how those challenges can be overcome.

Market Appetite for ML

While not yet as widely accepted as the move to the cloud for the financial close and planning processes, ML adoption is already increasing, according to the 2022 Data Science and Machine Learning Market Study by Dresner Advisory Services.  In 2016, less than 40% of responding organizations reported using or actively exploring ML.  That same metric was about 70% in 2022 (see Figure 1), showing a steady increase over the last seven years.  On the surface, that progression underscores the AI hype and excitement for the potential benefits of using AI for FP&A.

But what happens if the data gets broken down by function?  A bit of a different reality emerges for the Office of Finance and FP&A.

In fact, the study shows that only 20% (see Figure 2) of Finance organizations are currently using AI and ML, and Finance actuals lag most functions, despite all the buzz and chatter out there.

What’s Holding FP&A Back?

With so much buzz yet low adoption, what key barriers are holding FP&A and Operations teams back from mainstream adoption of ML solutions?  Figure 3 depicts the barriers.

Below, the details about these key barriers show why they’re preventing widespread implementation of cutting-edge ML technologies:

Lack of Expertise

• FP&A teams can struggle to deploy ML in enterprise planning processes, such as rolling forecasting or demand planning, due to lacking the required expertise in ML and machine learning modeling techniques.  Without dedicated business analysts and data science engineers, teams cannot realize the full potential of ML in planning processes.  
• A lack of expertise is especially relevant for organizations with existing ML investments, where the lack of specialized resources hinders the ability of FP&A teams to effectively utilize ML in their work.  Without dedicated expertise or resources, FP&A teams are severely limited in their ability to take advantage of AI and ML.

Lack of Scale

• For organizations with existing data science teams, creating repeatable and systematized ML processes and infrastructure across the enterprise is expensive.  Additionally, most ML capabilities within CPM tools today are only capable of producing a single forecast (target) at a time.  Why does that matter?
• FP&A’s role is to lead and drive effective planning processes across lines of business and functions (e.g., HR, Sales and Operations).  And if unable to empower the organization to forecast at scale, FP&A is not executing as a strategic business partner.  AI solutions for FP&A that cannot scale are no different and will never reach mass adoption, causing the solutions to ultimately fail.

Lack of Business Intuition & Transparency

• Traditional ML modeling processes within CPM tools are often a “black box” to FP&A teams (see Figure 4).  Why does this matter?  Well, ML modes aren’t complete without material business “intuition” and/or offer users only limited visibility or traceability into model inputs and results.  Such limitations can result in a lack of trust or confidence in the results.

As a strategic business partner, FP&A must instill confidence in forecasting processes.  And while leveraging AI and ML is likely to increase forecast accuracy, P&L owners cannot assess the drivers that comprise forecasts – P&L leaders who can’t will never own their forecasts.

And if P&L owners don’t own their forecasts, forecasting processes break down and fail altogether.  That means FP&A has failed too.

Fragmented & Disconnected Processes

• Current AI and ML solutions within CPM typically require data movement and reconciliation between fragmented systems and Finance processes.  Those requirements increase the technical debt and limit the ability for advanced analytics to scale across the organization.
• The fragmented software and technical processes needed for connected planning create added technical complexity and administrative burden for FP&A teams.  This burden includes constantly moving and reconciling data, monitoring data latency, and managing security between fragmented products or models.  Collectively, the burden dilutes the ability of strategic FP&A teams to focus on driving performance and supporting critical decision-making.

Conclusion

Despite these challenges, ML has the potential to significantly improve Finance operations and outcomes.  By automating manual processes, ML can help Finance professionals save time and improve accuracy, which can lead to more effective decision-making.  Additionally, ML can provide real-time insights into financial performance.  Those insights can then help Finance professionals identify trends and make informed decisions.

As AI and ML for FP&A enter the mainstream, organizations will undoubtedly have several choices to consider.  On one spectrum, solution vendors for AI (see Figure 5) are offering everything from AI infrastructure solutions to data science toolkits and complete AI platforms to create and deploy ML models.  While these are powerful tools addressing varying use cases, the tools aren’t designed for FP&A teams.

Corporate performance management vendors are also investing in AI capabilities to support extended planning & analysis (xP&A) processes such as demand planning and sales planning.  As Figure 5 illustrates well for AI vendors, CPM vendors will also solve their customers’ AI needs in different ways.

So then, what’s the lesson in all this?

Don’t let AI hype cloud the evaluation process.  Start with a clear understanding of “what” business outcomes the FP&A team is trying to achieve with ML.  Identify “who” is using the solution and “how” the solution is unified into existing planning processes.

And with answers to these questions in mind, use the evaluation process to “get under the hood” to learn whether the solution will unleash the organization from the key barriers holding FP&A back from moving beyond the hype.

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Want to learn more about how FP&A teams are moving beyond the AI hype?  Stay tuned for additional posts from our blog series, or download our interactive e-book here.

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Organisations face an abundance of varied regulations across the globe.  Exactly which ones apply depends greatly on the size or type of the organisations and the location or industry in which they operate.  In the area of accounting compliance, the focus is on ensuring accurate transaction processing and reporting of financial results, and complying with regulatory guidelines, such as Sarbanes Oxley (SOX), European Union (EU) and other regulatory guidelines.  The compliance aspect relies on having a high degree of controls, the segregation of duties and detailed audit trails.

Here’s the simplest definition: Compliance ensures an organisation discloses how well it is or is not complying with the relevant regulations.  To demonstrate full compliance, organisations must build and maintain reports that can be produced during audits.  Plus, organisations must not only publish statements to that effect in annual financial reports but also avoid violating any regulations at any given moment.

Failing to comply with the industry standards, laws, rules and regulations set by regulatory bodies and government bodies can result in hefty penalties, reputational losses and expensive legal actions.  Even worse, non-compliance can even cause organisations to fail or be shuttered.

Why Do Compliance Reports Need To Be Effective?

What does effective compliance reporting look like for enterprise performance management (EPM)?  Well, let’s start with defining exactly what effective means.  What does ‘effective’ mean?  The thesaurus definition states that effective = being successful in producing a desired or intended result.

In the context of EPM and financial and operational reporting, I would suggest that effective means the reports demonstrate compliance with all the regulations relevant to the organisation in the industry and geographies in which the organisation operates.

Effective compliance reporting should have the following characteristics:

1. Meaningful: Effective compliance reporting must deliver meaningful reports.  Importantly, many compliance reports go to senior executives, board directors and external stakeholders.  While they might understand the concepts for regulatory compliance, these groups won’t necessarily know all the lingo or terms that might be used within the organisation.
2. Timely: Effective compliance reporting must be generated in a short timeframe and be as automated as possible.  The quality of the data is especially important – meaning controls, auditability and traceability all help ensure effectiveness.  The manual creation of compliance reports is ineffective, expensive, painstaking and highly prone to error, which is a big reason EPM software is widely used for compliance reporting.
3. Purposeful: Customers can often require compliance reports.  For example, a customer might want to understand an organisation’s cybersecurity, anti-corruption programs or ESG performance – before agreeing to do business with the organisation.  Effective compliance reporting can address customer questions in those areas.  (And as the business landscape keeps marching towards a world of high regulatory and ethical expectations, those demands from customers will only get more insistent.)

Important Factors to Achieve Effective Compliance

To achieve effective compliance reporting requires fully reviewing the existing systems and processes and then taking steps to eradicate manual activities by replacing spreadsheets and manual data uploads.  Only by fully automating key financial processes and reporting within a unified, governed and flexible EPM platform can organisations achieve an effective and streamlined reporting process.

A effective unified EPM platform should have financial data quality management (FDQM) at its core.  This capability is critical for organisations to drive effective transformation across the Finance function and the Lines of Business.  In FDQM, a key requirement is 100% visibility from reports to sources – all financial and operational data must be clearly visible and easily accessible.

The solution should also include guided workflows to protect business users from complexity.  How?  By uniquely guiding them through all data management, verification, analysis, certification and locking processes.

Strict process controls are vital, and the system should include the following:

• Data and process certification and sign off
• Audit trails from 10K/10Q to GL source account and GL trial balance
• Support for SOX 302 and 404 certification questionnaires to identify financial process weaknesses

Importantly, the unified platform should support all reporting requirements with standard, defined and repeatable processes for financial data collection and consolidation.  The ability to produce financial statements that meet GAAP, IFRS and local statutory accounting requirements is paramount to effective compliance that meets all reporting requirements.

What You Need to Know

Effective compliance can bring opportunities to any organisation – including those listed below.

• Reduce costs: Doing the right thing is more important now than ever since reputations are key to attracting and retaining talent.  Why?  People are attracted to organisations who visibly operate in a responsible way.  The result?  Lower costs stemming from organisations being able to keep the top talent they recruit for longer, which ultimately helps the bottom line.
• Attract investment: Investment is increasingly driving towards organisations with a focus on the surrounding environment.  Roughly $35 trillion is now flowing into ‘sustainable’ mutual funds and ETFs.  By doing the right thing (i.e., being compliant), organisations can be more attractive to investors, which brings new opportunities for growth.
• Increase revenue: Customers are increasingly interested in the organisations behind products purchased.  And thanks to social media and other digital means of communication, consumers are more aware than ever.  Attracting more customers will bring more demand and therefore more revenue.

Organisations can enjoy all the above benefits – and others! – by taking the high road on compliance and ensuring the systems and processes in place can deliver meaningful, timely and purposeful compliance reporting.

Case Studies

Toll Group, part of Japan Post, is a logistics, distribution and freight forwarding business with dual headquarters in Melbourne and Singapore.

Toll’s objective in implementing OneStream was to have a single group team in a single system handle the statutory consolidation and reporting process for all legal entities.  This capability would improve the group governance and oversight on compliance activities and results analysis.  At the same time, the divisional team resources would be free to focus on internal budgeting and forecasting, performance reporting and local ledger reporting development.

By meeting Toll’s needs, OneStream has enabled a significant improvement in the accuracy and timeliness of reporting.  Group governance has also improved, with increased oversight on compliance activities and results analysis.  OneStream’s automation of data loads and improved data quality has ultimately allowed the Group to eliminate a massive amount of manual data handling in Excel®.

Johnson Outdoors is a leading global outdoor recreation company that turns ideas into adventure with innovative, top-quality products.

Johnson Outdoors was looking to maximize a single investment in a global Finance platform.  They needed to improve multiple Finance processes (e.g., consolidation, reporting, SOX, budgeting, data submission process, audit support and cash flow reporting) – and they needed the platform to be fully owned by Corporate Finance.

The OneStream platform now allows Johnson Outdoors to deliver global financial consolidation, management reporting, guided workflows and a robust planning solution, all in one product and one application.  The improvements in data collection, workflow, submission approvals and full audit capabilities back to data sources and the JDE data warehouse have transformed Johnson Outdoor’s compliance processes.

Conclusion

Ultimately, both internal and external stakeholders need to know the information they read about an organisation in reports can be trusted.  The reports must also be easy to read and instill confidence in every reader.  For organisations who can meet those requirements and take compliance to the highest level by having robust systems and processes in place, opportunities abound to reduce costs, retain talent, attract investment and increase revenue.  And the first step to reaping the rewards of those opportunities is putting the right foundational layer in place for effective compliance reporting by implementing a single unified EPM platform, such as OneStream.

Learn More

If your organisation needs to improve the effectiveness of its compliance reporting, maybe it’s time to evaluate your internal systems and processes.  To learn more, download our ebook on Reporting & Analytics.

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Managing the reporting requirements for a conglomerate company can be a daunting and overwhelming task, as there are many moving and ever-changing factors. It is essential that conglomerate companies incorporate modern financial applications so that Group Finance can produce effective and accurate work and keep all independent businesses operating smoothly.

Wesfarmers comprises some of Australia’s most notable retailers such as Target, Bunnings, and Kmart, who each have their own form of self-governance and enterprise reporting methods. The company’s existing financial management system, could not efficiently manage their enterprise reporting, which encouraged their Finance team to heavily rely on offline spreadsheets. A change to their financial reporting system was prioritized, and the company’s leadership knew that the sooner it found a solution for Group Finance, the quicker the Finance team could optimize the software to their needs. Read on to learn about Wesfarmers’ finance transformation journey and the successes they have seen by replacing their existing finance management system and offline spreadsheets with OneStream.

Founded in 1914 and headquartered in Perth, Australia, Wesfarmers has operated Australian businesses that sell merchandise such as office supplies, fertilizer, and energy. Wesfarmers is known as one of the most successful and influential businesses to come out of Australia, ranking at 195 on the Fortune Global 500 and having over 100,000 employees. It has also had ample financial success, as its 2021 annual revenue was 33.94 billion Australian dollars, an increase of 43.5% from the previous year.

A Modern CPM Solution is Realized

Wesfarmers needed a solution for Group Finance that would be capable of handling non-standardised data outputs and inputs, streamlining data collection, managing complex consolidations, and handling advanced group reporting. Wesfarmers utilized Oracle’s Hyperion Financial Management (HFM) suite as part of the financial reporting process, but frequent reporting requirement changes were often through offline spreadsheets. Further, the situation became even more problematic when it was announced by Oracle that the version of HFM they were using would cease to be supported after December 2021.

Therefore, Wesfarmers sought a new system for Group Finance, prioritizing reliability, safety, and utility in their search. Representatives engaged in discourse with possible candidates such as CCH Tagetik, and Oracle. Still, they became mainly intrigued with OneStream’s Intelligent Finance platform after learning about it from consultants at Taysols, a prominent Australian service provider and partner of OneStream. OneStream’s platform provided a solid foundation against which the financial reporting process was significantly improved, as it allows conglomerate companies to efficiently address group reporting and monitor group performance data. After coming to an agreement with Wesfarmers, Taysols aided in the company’s transition from their Oracle HFM system to OneStream.

All-in-one Financial Solution

Wesfarmers immediately recognized benefits from partnering with OneStream, as group reporting became mainly automated, consolidation processes were significantly improved and their group reporting pipeline was modernized. The demand for spreadsheets diminished.

Following the implementation of OneStream, Wesfarmers’ senior executives could receive answers to their questions in minutes, rather than days. The outdated approach to the presentation of information was also replaced with modern and streamlined dashboards and reports.

OneStream provided Wesfarmers staff with detailed monthly progress reports concerning its subsidiaries. Previously, Wesfarmers’ subsidiary reports were audited in hundreds of offline spreadsheets; reports under OneStream are audited in the cloud.

Partnering with OneStream armed Wesfarmers with an all-in-one financial solution. Tedious manual processes became automated, data management became more organized, financial analytics were presented with more intricate details, and subsidiary performance reporting was simplified. Group Finance has never been easier for company leaders under OneStream.

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To learn more about Wesfarmers’ unique OneStream journey, we invite you to read their Customer Success Story. And if your organization is ready to begin your finance transformation journey, contact OneStream today!

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Financial reporting is an essential function of any Finance organization.  It provides stakeholders with a snapshot of the financial results and financial position of the enterprise.  You may think that financial reporting is mainly a function of the Accounting group within the Office of Finance, however financial reporting and the related analysis of financial results is an important function of most Financial Planning & Analysis (FP&A) departments.  Financial reporting capabilities are also an important feature to evaluate when selecting a software package to support FP&A as well as the Accounting team.  Read on to learn more.

What is Financial Reporting?

Financial reporting refers to processes and practices that provide stakeholders an accurate depiction of the finances of an enterprise, including its revenues, expenses, profits, capital, and cash flow. The enterprise could be a private or public company, non-profit, government agency, higher education institution, or other organization.

The primary financial statements that are produced through the financial reporting process include the following:

• Balance Sheet – Provides a consolidated view of the assets, liabilities, and capital of the enterprise at a specific point in time.  The balance sheet is typically produced at month-end, quarter-end, and year-end.
• Income Statement – Also known as profit and loss, an income statement is a financial report that summarizes the enterprise’s income, expenses, and profits or losses over a specific period of time. Income statements are typically produced for a specific month, quarter, full year, or on a year-to-date basis.
• Cash Flow Statement – The cash flow statement summarizes the amount of cash that the enterprise has generated (sources) and how the cash is being spent (uses).  It contains elements of both the income statement and the balance sheet, and it is critical to the successful financial management of an enterprise.

Key Stakeholders and Their Requirements

Financial reporting needs to inform and serve the needs of a variety of stakeholders.  This can include external stakeholders such as investors, owners, bankers, public markets, regulators, and boards of directors – who all need to understand the financial performance of the enterprise to guide investment decisions, levy taxes, ensure compliance, and provide advice to executive management.

External stakeholders are typically most interested in the key financial statements mentioned in the prior section, as well as supporting details, schedules, and commentary (e.g., management discussion and analysis) about the financial performance of the enterprise.

Financial reports are also essential tools for informing internal stakeholders about the financial performance of the enterprise.  This can include the CEO, CFO, and senior management team, as well as managers across the enterprise who need to understand how their particular subsidiary, department, business unit, or function is performing in relation to the overall enterprise.  Internal stakeholders are typically most interested in the consolidated income statement of the enterprise, as well as profit and loss reports for their specific area of responsibility.  This is where financial reporting expands to include financial analysis.  This financial analysis delivered as part of internal management reporting may include the following:

• Comparisons of the financial results to the original budget for the period showing positive and negative variances that should be analyzed.
• Comparisons against prior period performance (e.g., prior quarter or same quarter in the prior year)
• Comparisons of revenue, expenses, and profit or loss across subsidiaries, business units, departments, or product lines.

The form these internal financial management reports may take can vary based on the preferences of the internal stakeholders.  Some may prefer printed financial reports or books of reports.  Some may prefer electronic access to financial reports via email delivery, while others may prefer to review financial results through an interactive dashboard (see figure 1), with the ability to drill into key performance indicators (KPIs) or values on financial reports. Financial and operational analysts may prefer to have access to financial and operational results via an Excel spreadsheet so they can slice and dice the data and perform scenario analysis as needed.

The Financial Reporting Gap

Given the demanding requirements of internal stakeholders when it comes to financial reporting and analysis, you might be wondering how well enterprises are doing in meeting the needs of this audience.  Unfortunately, despite the explosion of data across organizations, many organizations still struggle to meet the information requirements of executives and managers because they just don’t have the right tools for the job.

In fact, according to the FSN Future of Analytics in the Finance Function survey from 2020, only 14% of Finance leaders consider their reporting and analytics insightful.  That means 86% of reporting and analytic effort is missing the mark.  Why is this?  Because most enterprises are relying on fragmented silos of spreadsheets, legacy ERP and corporate performance management (CPM) software, data lakes, and BI tool for their reporting needs, which force Finance teams to build disjointed processes around their technology and are not organized in a way they understand.

Reporting and Analytics in CPM Software

Today’s modern CPM software solutions offer a number of advantages over legacy CPM solutions.  They are most often deployed in the cloud enabling faster time to benefit.  They offer specific functionality designed to address the financial close, consolidation, planning, reporting, and analysis needs of enterprises.  And most include robust, built-in reporting and analysis capabilities.  If this isn’t part of the CPM solution you are selecting, then you’ll need to augment the solution with 3rd party BI and reporting tools.

For example, with a broad range of reporting and analytics capabilities, OneStream helps reduce reliance on spreadsheets and fragmented reporting tools to increase the speed, scope, and accuracy of reporting across the organization. OneStream’s Intelligent Finance Platform (see figure 2) unifies finance processes across the office of the CFO while enabling the organization with self-service, easy-to-use financial reporting software for a variety of stakeholder groups. OneStream’s reporting and analysis capabilities include the following:

• Guided Reporting for rapid creation of financial statements
• Production Reporting for pixel-perfect operational reporting
• Interactive Dashboards with sophisticated data visualizations
• Analytic Blend engine which combines detailed operational data with summarized financial data so managers can identify daily and weekly trends and financial signals
• Microsoft Excel® integration for data entry, reporting, and analysis
• Microsoft Office® integration including Word and PowerPoint

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Financial reporting is an essential function for both Accounting and FP&A functions, and these capabilities are an important factor to consider when enterprises are evaluating CPM solutions for financial close, consolidation, planning, and forecasting.

Over 1,000 enterprises have chosen OneStream’s unified Intelligent Finance platform to support their financial close, consolidation, planning, reporting, and analysis requirements and to deliver timely, accurate financial and operational results to internal and external stakeholders.  To learn more, check out our interactive eBook and contact OneStream if we can be of assistance.

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Today, confidence in data quality is needed more than ever.  Executives must constantly respond to a multitude of changes and be provided with accurate and timely data to make the right decisions on what actions to take.  It’s, therefore, more critical than ever that organisations have a clear strategy for ongoing financial data quality management (FDQM).  Why?  Well, better outcomes result from better decisions.  And high-quality data gives organisations the confidence needed to get it right.  This confidence in data then ultimately drives better performance and reduces risk.

Why Is Data Quality Important?

Data quality matters for several key reasons, as shown by research.  According to Gartner,[1] poor data quality costs organisations an average of $12.9 million annually.  Those costs accumulate not only from the wasted resource time in financial and operational processes but also – and even more importantly – from missed revenue opportunities.

As organisations turn to better technology to help drive better future direction, the emphasis placed on financial data quality management in enterprise systems has only increased.  Gartner also predicted that, by 2022, 70% of organisations would rigorously track data quality levels via metrics, improving quality by 60% to significantly reduce operational risks and costs.

In a report on closing the data–value gap, Accenture[2] said that “without trust in data, organisations can’t build a strong data foundation”.  Only one-third of firms, according to the report, trust their data enough to use it effectively and derive value from it.

In short, the importance of data quality is becoming increasingly clearer to many organisations – creating a compelling case for a change in financial reporting software evaluations.  There’s now real momentum to break down the historic barriers and move forward with renewed confidence.

Breaking Down the Barriers to Data Quality

Financial data quality management has been difficult, if not virtually impossible to achieve for many organisations.  Why?  Well, in many cases, legacy corporate performance management (CPM) and ERP systems were simply not built to work together naturally and instead tended to remain separate as siloed applications, each with their own purpose.  Little or no connectivity exists between the systems, so users are often forced to resort to manually retrieving data from one system, manually transforming the data, and then loading it into another system – which requires significant time and risks lower quality data.

There’s also often a lack of front-office controls that leads to a host of issues:

• Poor data input and limited validation.
• Inefficient data architecture with multiple legacy IT systems.
• Lack of business support for the value of data transformation.
• Inadequate executive-level attention prevents an organisation from laying the effective building blocks to financial data quality.

All of that contributes to significant barriers to ensuring good data quality.  Here are the top 3 barriers:

1. Multiple disconnected systems – Multiple systems and siloed applications make it difficult to merge, aggregate, and standardise data in a timely manner.  Individual systems are added at different times, often using different technology and different dimensional structures.
2. Poor quality data – Data in source systems is often incomplete, inconsistent, or out of date.  Plus, many integration methods simply copy data complete with any existing errors – lacking any validations or governance.
3. Executive buy-in – Failing to get executive buy-in could be due to perception or approach.  After all, an effective data quality strategy requires focus and investment.  With so many competing projects in any organisation, the case for a strategy must be compelling and effectively demonstrate the value that data quality can deliver.

Yet even when such barriers are acknowledged, getting the Finance and Operations teams to give up their financial reporting software tools and traditional ways of working can be extremely challenging.  The barriers, however, are often not as difficult to surmount as some believe.

The solution may be as simple as demonstrating how much time can be saved by transitioning to newer tools and technology.  Via such transitions, reducing the time investment can result in a dramatic improvement in the quality of the data through effective integration with both validation and control built into the system itself.

The Solution

There are some who believe Pareto’s law applies to data quality: Typically, 20% of data enables 80% of use cases.  It is therefore critical that an organisation follows these 3 steps before embarking on any project to improve financial data quality:

1. Define quality – Determine what quality means to the organisation, agree on the definition, and set metrics to achieve the level with which everyone will feel confident.
2. Streamline collection of data – Ensure the number of disparate systems is minimised and the integrations use world-class technology with consistency to the data collection processes.
3. Identify the importance of data – Know which data is the most critical for the organisation and start there – with the 20%.  Then move on when the organisation is ready.

At its core, a fully integrated CPM software platform with built-in financial data quality (see Figure 1) is critical for organisations to drive effective transformation across Finance and Lines of Business.  A key requirement is providing 100% visibility from reports to data sources – meaning all financial and operational data must be clearly visible and easily accessible.  Key financial processes should be automated and using a single interface would mean the enterprise can utilise its core financial and operational data with full integration to all ERPs and other systems.

The solution should also include guided workflows to protect business users from complexity by guiding them uniquely through all data management, verification, analysis, certification, and locking processes.

OneStream offers all of that and more.  With a strong foundation in financial data quality, OneStream allows organisations to integrate and validate data from multiple sources and make confident decisions based on accurate financial and operating results.  OneStream’s financial data quality management is not a module or separate product but built into the core of the OneStream platform — providing strict controls to deliver the confidence and reliability needed to ensure quality data.

In our e-book on Financial Data Quality Management, we shared the following 3 goals for effective financial data quality management with CPM:

1. Simplify data integration – Direct integration to any open GL/ERP system and empower users to drill-back and drill-through to source data.
2. Improve data integrity – Powerful pre-data and post-data loading validations and confirmations ensure the right data is available at every step in the process.
3. Increase transparency – 100% transparency and audit trails for data, metadata, and process change visibility from report to source.

Delivering 100% Customer Success

Here’s one example of an organization that has streamlined data collection and improved data quality in the financial close, consolidation, and reporting process leveraging OneStream’s unified platform.

MEC Holding GmbH – headquartered in Bad Soden, Germany – manufactures and supplies industrial welding consumables and services, cutting systems, and medical instruments for OEMs in Germany and internationally.  The company operates through three units: Castolin Eutectic Systems, Messer Cutting Systems, and BIT Analytical Instruments.

MEC has 36 countries reporting monthly, including over 70 entities and 15 local currencies, so the financial consolidation and reporting process includes a high volume of intercompany activity.  With OneStream, data collection is now much easier with Guided Workflows leading users through their tasks.  Users upload trial balances on their own vs. sending to corporate, which speeds the process and ensures data quality.  Plus, the new system was very easy for users to learn and adopt with limited training.

MEC found that the confidence from having ‘one version of the truth’ is entirely possible with OneStream.

Learn More

If your Finance organisation is being hindered from unleashing its true value, maybe it’s time to evaluate your internal systems and processes and start identifying areas for improvement.  To learn how read our whitepaper on Conquering Complexity in the Financial Close.

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In a previous blog article, I highlighted the increasing buzz in the market in the past 12 months around the topic of environmental, social, and governance (ESG) reporting and why CFOs and Finance teams are paying more attention to it.  In this article, I’ll highlight why a growing number of organizations are leveraging OneStream to align their ESG reporting with their financial reporting and broader corporate performance management (CPM) processes, and the value that delivers.

ESG Reporting in Focus for CFOs

ESG reporting (a.k.a. Sustainability Reporting) refers to the disclosure of data covering a company’s operations in three areas: environmental, social, and corporate governance. It provides a snapshot of the business’s impact in these three areas for investors, customers, and wider stakeholders. The value of ESG reporting is that it ensures organizations consider their impacts on sustainability issues and enables them to be transparent about the risks and opportunities they face.

For many years, ESG reporting was an annual, voluntary disclosure by public and private companies to their stakeholders about the impacts of their enterprise on the environment and society and how they are managing these programs.  With an increasing amount of capital (now roughly $35 Trillion) flowing into “sustainable” mutual funds and ETFs, there is increasing stakeholder interest in ESG reporting and increasing demand for more detailed and frequent disclosures from public and private enterprises.

As a result, corporate sustainability and climate change efforts are fast transitioning from voluntary to mandatory in many countries, and even the US SEC is moving towards defining clear disclosure guidelines for public companies.  Based on this inertia, there is a clear driver for companies to develop robust sustainability and ESG strategies with transparent reporting to stakeholders.  And this is one of the primary reasons ESG reporting is becoming a hot topic for CFOs and Finance teams.

Aligning ESG Reporting with Financial Reporting

As ESG reporting transitions from voluntary to mandatory it will require the same level of governance, control, accuracy, and auditability as financial reporting.  And since CFOs and Finance teams fully understand how to drive control and accuracy in financial reporting, they are best suited to overseeing the collection, consolidation, and reporting of ESG and data alongside financial results.

While ESG reporting is quickly becoming mandatory, meeting an organization’s sustainability objectives will require a management process that’s similar to the corporate performance management (CPM) process that Finance teams employ to help them meet their financial objectives.  This process includes goal setting, planning, monitoring and reporting, and analyzing results to track progress and make adjustments as needed to stay on track.

As stated by Accenture in a recent survey report on ESG reporting, “Meeting demands for sustainability data will be integral to company performance.  Making a CFO responsible for sustainability is essential for ensuring a company meets its ESG goals.  Companies are much more likely to extensively embed ESG in core management processes when the CFO has accountability for ESG metrics.”

Aligning ESG with Financial Reporting and CPM

While many organizations manage ESG reporting via spreadsheets or point applications, both of these approaches create a data collection, consolidation, and reporting process that’s separate from the financial reporting process. And if ESG metrics need to be reported alongside financial metrics, wouldn’t it be better if this data was collected in the same system and processed as financial data?

The answer is yes, and that’s why a growing number of OneStream customers are extending the usage of our unified, CPM software platform to support their ESG reporting and management requirements.  OneStream’s platform provides several key capabilities that make it a great fit for ESG reporting.  These include the following:

Financial Data Quality:  OneStream can load and validate large volumes of financial and non-financial data such as GHG emissions, water and electricity usage with validations and out-of-the-box drill-down and drill-back capabilities to source data providing ultimate auditability.  OneStream can connect to any source of ESG data as required such as ERP, CRM, HR systems, and internal data warehouses.   The platform can also collect data via flat files, spreadsheets, or data entry forms.

Guided Workflow: OneStream allows customers to design the user experience around the process and apply controls, validation, and governance on ESG data collection, managing the monthly, quarterly, and yearly tasks together.  Customers can also leverage the OneStream Task Manager solution to manage and orchestrate the process further and enable email notifications.

Financial Consolidation:  OneStream can aggregate and consolidate ESG data and textual commentary quickly to provide company-wide results.  With OneStream, your ESG data is consolidated according to the same principles as your financial data, and with the same level of control, governance, and audit trails.  Complex ESG data conversions are supported, along with eliminations and partial ownership calculations. Customers can future-proof their CPM solution to support new standards with unlimited configurable dimensions and hierarchies – supporting GRI, SASB, and other frameworks as required.

Reporting & Analytics:  In addition to financial and management reports, configurable dashboard visualizations (see figure 1) can provide deep analysis of ESG data and turn it into valuable information and insights.  OneStream also supports ad hoc analysis via Microsoft Excel integration, a built-in spreadsheet component, and pivot grids.  Integration with MS Office products enables users to produce and distribute PowerPoint decks, Word Docs, and PDFs with ease.  Data Blending supports reporting and analysis on high volumes of non-financial data.

Planning and Forecasting:  Customers can plan and forecast on ESG with confidence and without compromise. They can set ESG goals and objectives, track Actuals v Target, and provide variance analysis & commentary.  Users can perform what-if scenario modeling to understand the impact of ESG policies on financial results and business value. OneStream supports unlimited extensible data models for any ESG planning process.

Based on these capabilities, OneStream’s platform is well-suited to supporting the collection, consolidation and reporting of ESG data and commentary for internal and external reporting. Much of the emissions data can be found in the local ERP systems and sub-ledgers. For example, energy bills, water consumption, fuel usage is all available on the invoices in the ERP data.  But the formatting, units, etc., are likely all different and there are many other offline or manual data collection processes that need to happen to bring everything together and holistically report on ESG initiatives.

Customers Leading the Way

OneStream has several customers that are already using our platform to collect, consolidate and report ESG data.  One example is a CPG holding company that has grown organically and via acquisitions of many food providers.  When they acquire companies, they let them keep their existing ERP systems as they are all manufacturing companies.  As a result, they have over 50 different GL/ERPs at 100+ locations.

This organization had been collecting data for financial and ESG reporting via spreadsheets and email, so it was highly manual, time-consuming, and prone to errors. They selected OneStream (see figure 2) to collect, consolidate and report their financial and non-financial/ESG data.

 

With OneStream the organization now has one system for actuals, budgets, quarterly forecasts, ESG reporting, weekly operations data, and M&A analysis. Having a single system and process saves time and reduces redundancy in data collection.  Subsidiaries provide a single submission for financial and ESG reporting.  The company has eliminated errors in data collection by using data entry forms with validation checks for key environmental and social metrics.

Conclusion

ESG and Sustainability reporting is rapidly moving from a voluntary to mandatory process.  CFOs and Finance teams need to get engaged to ensure the accuracy and integrity of ESG and sustainability reporting to a variety of stakeholders.  Aligning ESG reporting with the financial reporting and performance management process and system can eliminate duplication, increase accuracy, ensure compliance and improve the overall management of ESG initiatives.

To learn more, check out our white paper titled “The New CFO Imperative: Unifying ESG & Financial Reporting”, or contact OneStream if your organization is ready to align ESG reporting with financial reporting and get ahead of upcoming disclosure mandates.

Download the White Paper

When it comes to corporate performance management (CPM), distilled down to the simplest terms, Finance has three basic roles to fulfill in its support for the organisation:

1. Looking backward with processes such as the financial close and consolidation to produce an accurate book-of-record income statement and balance sheet to represent an organisation’s financial position.
2. Looking forward to planning and forecasting to empower decision-makers with insights to support faster and more informed decision-making for the next month, quarter, and beyond.
3. Providing right-time guidance for daily and weekly financial and operational decisions across the enterprise to drive organisational performance before month- or quarter-end.

Binding all three roles together, of course, facilitates effective financial reporting and operational management reporting.  Why does this matter?  Well, for all the reporting and analysis to be impactful and well understood, it first must be communicated to stakeholders in a timely, clear and actionable format.

Organisations now need to move forward with their finance and operational reporting to drive the increasing levels of agile decision-making expected.  It is time to kick old, inefficient processes to the curb.  Move away from the limitations of fragmented tools and truly deliver effective reporting from a unified, intelligent finance platform.

Limitations of Fragmented Reporting Tools

Many Finance teams struggle to meet varying stakeholder reporting needs.  Why?  Mainly it’s because such Finance teams rely on a fragmented mix of reporting tools – such as siloed spreadsheets, legacy CPM software, and stand-alone BI tools.  Doing so means Finance teams must invest an inordinate amount of time and manual effort to not only copy and paste data but also then reconcile and format reports.

Ad-hoc reporting is also frustrating for Finance and Line-of-Business (LOB) managers who require accurate information to make effective business decisions.  Finance teams must often choose whether to provide business partners with the training and access to yet another fragmented tool or to take the time to produce new reports on an as-needed basis.

Either way, the burden falls on Finance.

Effective Performance Reporting

To realise their full potential as strategic business partners, Finance leaders of sophisticated organisations require reporting capabilities that are aligned with their CPM processes but address the variety of stakeholder reporting needs.  OneStream achieves all of that – empowering Finance to lead at speed with a single lens across the organisation while providing a single source of the truth and a high level of financial data quality for more effective and streamlined financial, statutory, and management reporting.

Why Is Effective Reporting Important?

OneStream simplifies both financial reporting and operational reporting by allowing users to focus on the quality and content of their data rather than constantly working through the mechanics of building reports.  Here are just a few additional benefits OneStream offers for financial reporting and analysis:

• Unifies Financial & Operational Data: OneStream brings detailed operational insights to Finance and non-Finance users with built-in financial signaling.  It intelligently aligns detailed data from multiple sources (e.g., CRM, HCM, or data warehouses) with financial data to produce the weekly and daily signals that drive performance.
• Streamlines Reporting & Increase Controls: OneStream eliminates reliance on Excel®, rogue databases, and manual processes for data gathering, reconciling financial data, and creating reports.  Users can create reports with 100% accuracy through a unified platform for analytics and reporting.
• Automates Report Creation & Distribution: OneStream standardises reports for varying stakeholder groups with over 50 predefined report types.  It automates report creation and distribution with the Parcel Service solution from the OneStream Marketplace.
• Creates Self-Service Visualisation: OneStream enables LOB and functional business partners to tell the story with easy-to-use, self-service visualisations.  Users can further extend insights by blending operational and financial data in a unified dashboard.

OneStream Customer Success

OneStream’s unified, Intelligent Finance Platform (see Figure 1) with built-in reporting and analytics eliminates the complexity of fragmented reporting tools.  Through built-in advanced reporting and analytic capabilities, OneStream empowers sophisticated organisations by offering a unified solution for financial close, consolidation, budgeting, planning, forecasting, reporting, analytics, and financial data quality.

By intelligently aligning detailed operational and financial data, OneStream’s flexible reporting and analysis capabilities eliminate the need for Finance teams to waste time manually copying data and creating reports.  In other words, OneStream unleashes Finance teams to focus on providing insights and analysis to better support key decisions.

Below are details about how two OneStream customers achieved significant benefits from the reporting and analytics available within our unified platform.

Crane Worldwide Logistics – Crane’s goal to remain lean and provide meaningful business insight to management was well supported by OneStream.  From a more efficient close cycle and dynamic reporting — including automated cash flow – to drastically reducing the days in the planning cycle, Crane realised a big return on their investment.  Crane is now well suited to acquire new sites or create legal entities with full confidence in OneStream’s ability to handle the integration and deliver results.

Management can rely on OneStream to deliver quick results and make real-time decisions accordingly.  “The nice thing about OneStream is that the platform has proven that our data is now correct”, said Katrina Celestine, Financial Reporting Manager at Crane.  “Everything from reconciliations to cube views, to custom reporting has been huge.  Best of all has been the drill-down functionality.  When someone asks a question about an amount, I can drill into the detail and see exactly what’s pulling into it and provide support.  With OneStream, the answer is always at your fingertips, which I really like”.

Sasfin – By implementing OneStream, Sasfin has achieved full data integration across the organisation – creating a single view of the truth.  This integration is much more than mere automation.  Rather, the integration unifies and streamlines financial processes so that the data is consistent and reliable at all times.  Because processes are more efficient, Finance teams are released to add higher value to the whole organisation.

This paradigm shift in the role of the Finance function has been the greatest benefit to Sasfin.  Where they previously poured resources into generating reports each month, the company is now empowered to apply their brainpower to analyze the information coming through the reports.

Drive Performance with Built-in Reporting & Analytics

The Finance organisation’s historical credibility in controlling financial data, metrics, analysis, and reporting gives it a unique voice of authority and trust among business leaders.  That’s why OneStream’s Intelligent Finance Platform was designed to help the Office of the CFO drive performance with a wide range of solutions across Accounting, Finance, and Operations business partners.  With OneStream, companies get built-in reporting and analytics, financial consolidation, and planning all within one unified solution.

As a result, OneStream is giving Finance leaders across the globe the ability to finally harness their data with the speed, scale, and control required to guide decision-making and drive performance —with a seamless user experience that doesn’t force Finance teams to compromise on business processes or technology.

Learn More

If your Finance organisation is being hindered from unleashing its true value, maybe it’s time to evaluate your internal systems and reporting processes and start identifying areas for improvement.  To learn more, download our e-book on Reporting & Analytics today.

Download the e-Book

For most of us, watching sci-fi films like the Avengers or the Matrix has given us a potential insight into what the future might look like.  We can, therefore, imagine what’s possible and impossible for the next generations. But, we’re also seeing big shifts in what’s possible right now.

With analytics, for instance, we’re now reaching a stage where the technology available today can examine the vast amounts of data within an organisation and begin to predict what will happen next – with high degrees of accuracy.

Advanced analytics have been around for more than 20 years.  What’s new, then?  Why are analytic tools becoming increasingly more common today? Well, the changes in technology and the ability to integrate ever-larger volumes of data into day-to-day business processes are driving increasing interest and the desire to turn the vision of advanced analytics into reality.

Advanced analytics deliver deeper data knowledge and more granular insights.  Accordingly, many more business functions now have a legitimate interest in this capability to help foster better decision-making and improved business outcomes.

Gartner describes advanced analytics across four main types of capabilities (see Figure 1), which are illustrated below:

The questions in Gartner’s model (Figure 1) can be a helpful guide to understanding exactly where your organisation stands regarding the adoption of these capabilities.  Most organisations have mastered the first two questions, allowing organisations to understand what happened and why.  However, many organisations do not have the capabilities in place to predict what will happen.

Is there proof of this?  Yes.  According to the Dresner Advisory 2021 Data Science and Machine Learning Market Study, only 39% of Finance teams are deploying the kind of technologies that enable predictions about future or otherwise unknown events today.  The number of organisations that can then use those technologies to help decide what to do next is much lower.

The Power of Advanced Analytics for Finance

With the sheer volume of data available and advancements in CPM software, Finance teams now (finally) have the capability to interact with advanced analytics.  And do it at scale.

How?  Instead of taking on the burden of building models, Finance teams can rely on purpose-built software to help supplement analysis, reporting, and planning processes with not only high-volume operational and financial signals but also statistically significant, predictive forecasts.

The following advanced analytics use cases can be found across organisations:

• Corporate FP&A – Create daily or weekly financial signals on sales, gross margin, and working capital drivers
• Sales Finance – Seed S&OP processes with predictive forecasts
• Operations Finance – Analyse future labour and material costs with predictive models
• Brand Finance – Extend predictive forecasting by store, brand, department, product category

Through data mining, machine learning (ML), statistical modeling, and other methods, advanced analytics are making industries everywhere more competitive.

Benefits of Advanced Analytics

Advanced analytics offer Finance teams a new way to drive performance – and lead at speed.  If Finance teams spend all their time moving data, reconciling data and building reports, they’ll have no time to leverage the data to guide key decisions.  But by leveraging technology to automate the hard work, Finance teams can shift a larger portion of their time to value-driving activities, such as forecasting cash or evaluating key capital investment decisions.

Advanced analytics tools offer a more accurate and reliable means of looking into the future than many previous tools could provide.  How can that insight help organisations gain a monetary benefit?  Well, retailers can use predictive models to forecast inventory requirements.  Hotels, restaurants and other hospitality organisations can use the capability to forecast the number of guests on any given night to maximise occupancy and revenue.  Airlines frequently use predictive analytics to set ticket prices that reflect past travel trends or account for major events.

Whatever the industry, attracting and retaining customers is important to any organisation, but advanced analytics can bring the opportunity to optimise marketing campaigns to nurture customers.  In turn, new purchasing opportunities can be surfaced to deliver continuous value.

OneStream Delivers Advanced Analytics

OneStream unleashes the power of Finance by unifying planning, financial close & consolidation, reporting, and analytics through a single, extensible solution.  We empower the enterprise with financial and operational insights to support faster and more informed decision-making – all in a platform designed to continually evolve and scale with the organisation.

OneStream’s comprehensive corporate performance management (CPM) software platform helps Finance teams access, maintain, validate and visualise data – all within a seamless and unified experience.  And in doing so on both governed financial and high-velocity operational data, OneStream provides a foundation for Finance-owned transactional analysis, reporting and sharing predictive insights.  Those insights then allow organisations to find new ways to ask ‘why’.

OneStream’s advanced analytics strategy includes key capabilities to enable Finance and business leaders.  Here are a few of those capabilities:

Analytic Blend

OneStream provides a unique ability to ‘blend’ validated financial data, highly dimensional operational data, and detailed transactional data in one platform for comprehensive, controlled, and consumable analysis and visualisation.  Easily combine financial, operational, and transactional data in a single dashboard for comprehensive visualisation and analysis.  With Analytic Blend (See Figure 2), Finance maintains one source of the truth for data, extending access to line-of-business managers and executives while eliminating data latency and the unnecessary replication of financial data for analysis.

Predictive Analytics

OneStream empowers Finance teams to lead at speed by unifying predictive analytics with core CPM processes: planning, budgeting, and forecasting; financial consolidation; reporting; and financial data quality.  And with built-in predictive analytics (see figure 3), OneStream is unleashing Finance transformation to take budgeting, planning, and forecasting processes even further – allowing teams to plan, analyse and predict with confidence.

Machine Learning

OneStream’s sensible ML solution will provide Finance teams with the power to leverage ML models without extensive work by data scientists.  This solution will take users through a step-by-step process for each part of the ML model-building and deployment process. Including feature engineering through advanced algorithm configuration, training, and deployment.

Creating value from advanced analytics in Finance and beyond could make a significant difference to your organisation’s performance.  What if you had the power to incorporate advanced analytics directly into your day-to-day business processes?  What if you could conquer the complexity of gathering and organising financial and operational data? Or creating and maintaining predictive forecast models?  Let the right technology help you to view the possible and impossible for the future of your organisation.

Learn More

If your Finance organisation is being hindered from unleashing its true value, maybe it’s time to evaluate your internal reporting & analytics and start identifying areas for improvement.  To learn more, view the OneStream advanced analytics interactive e-book.

Read the e-Book

Anyone leading Finance in a complex organisation today is likely facing increasing pressure to focus their efforts on value creation rather than just routine accounting, control, and compliance.  And as the requirement increases for accurate and timely data to inform key decision-making, the traditional month-end financial reporting cycle is clearly a material barrier to driving performance.  According to Accounting Web in 2021, 30% of survey respondents reported taking as many as 16-19 working days to close the books.  Many Finance teams are now moving backward as data volumes increase within their organisations.  Without change, more organisations could find themselves missing reporting deadlines and suffering from late filing penalties.

Why are so many organisations struggling to report in a timely manner?

The reason is simple:  they’re relying on fragmented silos of spreadsheets, legacy corporate performance management (CPM) software, data lakes, and BI tools for their reporting needs – forcing Finance teams to build disjointed processes around disparate technology tools.  Many of these tools are not optimally implemented or organised.  When every departmental and corporate application or model must be connected or integrated, it adds significant risks, costs, and complexities to already-taxed Finance teams.

Want proof?  Just think about how much time you and your team spend manually copying and pasting information between fragmented sources and tools as opposed to analysing results and helping your business partners take action.  Does this drawn-out process sound familiar?

The good news is that there is another option.  Unifying these multiple processes and tools can provide more automation, remove the complexities of the past and meet the diverse requirements of even the most complex organisation, both today and well into the future.

A Unified CPM Solution

Having a unified CPM platform such as OneStream (see Figure 1) is now a prerequisite to streamlining year-end reporting and unleashing the value of Finance.  And to make that possible, a platform that unifies key Finance processes and provides purpose-built functionality for financial consolidation, reporting, planning, forecasting, and analysis is necessary.  A unified CPM platform integrates financial and operational data from multiple sources and provides a single version of the truth for actuals, budgets, plans, forecasts, and analytical data.

Along with using a unified CPM platform, here are 3 steps you can take to streamline your year-end financial reporting:

1. Automate data load with built-in financial data quality management
2. Remove bottlenecks in the key financial close processes
3. Automate the production and distribution of financial reporting

1.   Automate data loading with built-in financial data quality management

Collecting and integrating data from multiple GL/ERP systems into a financial consolidation system can be a laborious task.  In many organisations, this data collection process is handled via flat files or spreadsheets being sent from remote locations to corporate accounting for loading into the consolidation system.  This manual process lends itself to errors that often require multiple emails or phone calls to resolve when the incoming data is incomplete or doesn’t map to the corporate chart of accounts.

By creating a direct connection between the financial consolidation system and the GL/ERP data sources, the enterprise can automate and streamline the data collection process, with exceptions being flagged and addressed quickly.

The unified CPM platform should have financial data quality management (FDQM) at its core.  This capability is critical for organisations to drive effective transformation across Finance and lines of business.  A key requirement in FDQM is 100% visibility from reports to sources – all financial and operational data must be clearly visible and easily accessible.  Key financial processes should be automated, and using a single interface means the enterprise can utilise its core financial and operational data with full integration to all ERPs and other systems.

2.  Remove bottlenecks in the key financial close processes

To truly become a strategic business partner, the Finance function must dramatically reduce its transactional workload within financial close processes.  Unleashing the true value of Finance requires minimising manual tasks to ensure efficiency in the following key processes (and others):

• Intercompany eliminations – When this critical task is done manually, it often adds extra days to the close process as corporate Finance staff spends too much time trying to reconcile intercompany balances and getting divisional and regional accountants to correct intercompany accounts.  With a unified CPM platform, however, the responsibility for communicating and confirming intercompany charges and balances between divisions or regions can be pushed down to the operating levels, with intercompany eliminations being automated and only minor exceptions needing the attention of corporate Finance.
• Allocations – Performing cost allocations required during the close process can be tedious when using spreadsheets, given the iterative nature of the process.  With a unified CPM platform, however, cost allocations can be automated and updated as the financial results are updated over the course of the financial close cycle.
• Account reconciliations – Finance teams in mid-sized to large enterprises can have hundreds to thousands of account reconciliations that must be performed before the financial results can be finalised at period-end, adding extra days to the close process.  With a modern account reconciliations solution that integrates seamlessly with the financial consolidation software, however, the account reconciliations process can be more automated and significantly streamlined.

3.  Automate the production and distribution of financial and operational reports

While collecting and consolidating results often consumes most of the monthly close process, generating reports for management and external stakeholders can also consume a lot of Finance time, especially when using spreadsheets.  With a unified financial consolidation solution that includes integrated and Finance-friendly reporting tools, however, the production and distribution of management and financial reports can be largely automated.  In return, delivery is accelerated, and more time is provided for Finance to perform value-added analysis.

Having a broad range of reporting and analytics capabilities helps reduce reliance on spreadsheets and fragmented reporting tools to increase the speed, scope, and accuracy of reporting across the organisation.  It is important to unify Finance processes across the Office of the CFO while enabling the organisation with self-service, easy-to-use reporting solutions for a variety of stakeholder groups.

Streamlined Year-End Reporting Success

Organisations that replace spreadsheets, manual uploads, and automate key financial processes and reporting within OneStream’s unified, governed, and flexible CPM platform can achieve a streamlined year-end reporting process. These organisations can truly lead at speed by delivering the right information, in the right format, at the right time to drive performance and bring value.

Learn More

If your Finance organisation is being hindered from unleashing its true value, maybe it’s time to evaluate your internal systems and processes and start identifying areas for improvement.  To learn more, download our e-book on Reporting & Analytics today.

Read the e-Book

Every year, data inconsistencies cost organizations time and money as they chase the truth to support financial and operational reporting.  Aside from the immediate impact on revenue, poor data quality over the long term leads to risk from decision-making based on inaccurate data and a lack of confidence in eXtended Planning & Analysis (xP&A) processes.  Why?  Because data inconsistencies confuse people, erode trust, cause angst and lead employees to seek “answers” in the data silos they know and love.

Of course, poor financial data quality leads to more than just poor decisions and risks in financial reporting.  It also causes organizations to waste resources, miss opportunities, and spend far too much time fixing data – time that could be better spent on other areas of the business.  And all of these impacts translate into increased costs.  In fact, according to Gartner [1], poor data quality costs an organization $12.8 million per year, on average.  Even worse?  That figure doesn’t even consider the downstream implications of poor decision-making.

With the overall exponential growth of data – especially amid the rise in xP&A – the cost of poor data quality will also grow exponentially if not addressed quickly.

Understanding Why Data Consistency Matters for Financial and Operational Reporting

Whereas data redundancy occurs when the same piece of data exists in multiple places, data inconsistency occurs in different formats in various systems, which leaves an organization with the unreliable and meaningless information. Most organizations traditionally created workarounds to reduce the impact of data inconsistencies but Finance can longer support these short-sighted solutions as it transforms itself into the core entity of xP&A – providing the financial intelligence required for corporate planning, reporting, and flexible operational planning (see Figure 1).  Data consistency must therefore be maintained across the enterprise to support xP&A.

Figure 1: Source – Gartner: Market Guide for Cloud xP&A Solutions, July 2021

Most FP&A leaders agree that having valid, accurate, and usable data for financial and operational reporting is critical.  The reality, however, is that many leaders spend more time chasing data inconsistencies instead of fixing the root causes, causing a lack of trust in the data.

Here are a few real-world examples of how data inconsistencies impact xP&A processes:

• Demand Planning.  Balancing customer needs for products while minimizing excessive inventory and avoiding supply chain disruptions is challenging, even in the most optimal environments.  The current environment of supply chain shortages has negatively impacted growth for many companies, and some have had additional challenges of imperfect data due to inconsistencies.
• Workforce Planning.  Aligning talent to ensure an organization has the right people – with the right skills in the right places at the right time – requires vast amounts of financial and operational data.  Planners pulling data from multiple silos across a dis-connected planning environment must take extra steps to validate the same slices of data.  Why?  Because planners don’t fully trust the data – nor should they!
• Sales Planning.  Organizations invest a tremendous amount of time and resources to define and support the process to create territory and incentive plans to align revenue and financial goals.  Unfortunately, many sales operations teams are forced to work in fragmented tools with inconsistent data, causing multiple versions of the truth and time spent on reconciling data vs. analyzing the business and driving revenue.

Conquering Data Complexity in Financial  Operational Reporting

A fully unified corporate performance management (CPM) platform (see Figure 2) with built-in Financial Data Quality Management (FDQM) is critical for organizations to align adequate financial and operational reporting across the enterprise.  An essential requirement for any CPM software platform is 100% visibility from reports to sources – all financial and operational data must be clearly visible, accessible, traceable, and consistent.

Figure 2: OneStream’s Intelligent Financial Platform

Using Guided Workflow Drives Data Quality

An organization can achieve effective data consistency through standardized and simplified data collection and analysis processes with reports available at every step in the workflow.  The workflows must be guided to provide standard, defined, and repeatable processes for maximum confidence and reliability in a business-user-driven process.

In-context guided workflows protect business users from complexity by guiding them uniquely through all data management, verification, analysis, certification, and locking processes.  Here are just a few examples of how OneStream’s Guided Workflows can improve an organizations performance:

• Intelligent analytics are delivered within each workflow step
• Separate input channels for data protection and transparency
• Phased workflow processes for all data collections
• User and process-aware
• 100% reliable process status delivered by a unified workflow

Conclusion

Deploying a program to enable data consistency is not an easy task, but the rewards are enormous.  Establishing a disciplined approach to managing data as an important enterprise asset will better position the organization to improve staff productivity and better serve customers.

With the rise of xP&A, the days of “dealing with” data inconsistencies are no longer an option, particularly in today’s volatile climate with ongoing global disruptions.  Finance leaders and analysts who want to move forward must once again have confidence their data is accurate without compromising ease of use.

With OneStream, data is consistent across all relevant business units leveraging our unified platform – reducing the drag that data inconsistencies impose on organizational performance.  Policies and technology are thus aligned, letting financial and operational leaders finally make better decisions to maximize profitability, without the fear of being blindsided by erroneous data.

Learn More

To learn more about how the unrivaled power of OneStream’s Intelligent Finance Platform can help keep your data consistent, download our Financial Data Quality Management ebook.  And don’t forget to tune in for additional posts from our Rise of xP&A blog series.

[1] Cost Optimization is Crucial for Modern Data Management Programs, Ankush Jain, Guidi De Simoni, Eric Thoo, Adam Ronthal, Melody Chien, Donald Feinberg, Ehtisham Zaidi, Sally Parker, Simon Walker, Malcolm Hawker, June 20, 2020

When put under strain, human bones have the ability to adapt to stress by rapidly deteriorating in size over time. The same could be said for organizations struggling with legacy performance management tools. Stress brought on by outdated finance applications can be felt not only by Finance teams but enterprise-wide through massive declines in process efficiency.

The leading provider of solutions for orthopedic implant procedures, Orchid Orthopedics needed to recover from the injury caused within their own Finance organization from years of using Infor and Excel®. These fragmented applications were impeding Orchid Orthopedics’ progress toward stronger financial consolidation and planning processes. Luckily, they knew that the earlier a modern finance platform was implemented, the sooner the healing process would begin, and the faster and more efficient their organization would be. Read on to learn about Orchid Orthopedics’ finance transformation journey and the successes they have seen by replacing Infor and Excel® with OneStream.

Delivering Leading Medical Device Services

Headquartered in Mason, MI, Orchid Orthopedic Solutions (Orchid) has been providing solutions for orthopedic implant procedures since 2005. Orchid is now a worldwide leader in orthopedic medical device solutions, delivering design and manufacturing services globally. Specializing in implants, single-use instruments, and innovative technologies within joint reconstruction, hips, knees, spine, trauma, extremities, and dental, Orchid holds the highest quality standards in the industry. Orchid employs approximately 2,000 employees and generating over $350M in annual revenue.

Orchid’s Pain Points

Orchid needed a platform that would provide greater visibility and optimization to support the company’s rapid development. Orchid was utilizing Infor CPM for financial consolidations and Microsoft Excel® for financial planning but was experiencing many limitations and challenges. To consolidate actuals and forecasts in Infor, the Finance team was spending nearly two hours rendering the system which, caused delays in their close and budgeting processes. The Excel® add-in feature of Infor required too much manual effort to perform ad hoc analysis and new report building was highly inefficient. On the FP&A side, the design of their system did not allow Orchid to utilize functionality for improved forecasting such as people planning, CAPEX planning, what-if scenarios, and more.

So, Orchid began their search for a new CPM solution, that was innovative and practical. Orchid was most impressed by the capabilities of OneStream’s Intelligent Finance platform and the company’s well-rounded Gartner Magic Quadrant leadership placement in both financial consolidation and financial planning. OneStream’s customer references helped the Orchid team solidify their decision and they made switch from Infor to OneStream.

Finance Implants a Modern Solution

By converting to OneStream, Orchid is now equipped with a unified platform for financial consolidation, reporting, budgeting, and forecasting. Unlike Infor’s version, OneStream’s Excel® add-in function allows Orchid to easily execute ad-hoc analysis on actual data on a recurrent basis, while Guided Workflows provide enhanced visibility into the closing process.

With OneStream, Orchid is benefitting from faster consolidation times, a streamlined close process, and quicker access to results. In fact, Orchid has shortened the monthly close process by 20%-. The Orchid team now has a better understanding of monthly performance and has reduced the time it takes to compile month-end results for the management team and board by 2-3 days.

Orchid has even extended its OneStream platform to include Account Reconciliations, Task Manager, and People Planning solutions from the OneStream MarketPlace™. The Task Manager feature has provided better visibility into the status of the month-end closing process by updating owners of the process. In addition, People Planning automates the forecasting of labor costs, allowing Orchid to better manage their largest expense.

Learn More

To learn more about Orchid Orthopedics’ unique OneStream journey, we invite you to read their Customer Success Story. And if your organization is ready to begin your finance transformation journey, contact OneStream today!

In today’s volatile and disruptive economic environment, CFOs and Finance organisations must lead organisational decision-making processes with insight, speed and confidence.  Yet many Finance organisations are still bogged down by inefficiencies in routine processes within the period-end financial close and reporting cycle.  And that makes it difficult to shift time to value-added analysis and decision support.

Organisations that do successfully adopt modern, cloud-based solutions for financial close, consolidation and reporting have been more successful in streamlining back-office processes and driving financial performance.  And perhaps most importantly, such organisations have gained the agility required to lead at speed and adapt quickly to changing business and industry requirements.

To get there, your organisation must tackle the six key challenges which we have identified in this 2nd post of our Re-Imagining the Close blog Series.

The 6 Key Challenges for Financial Close & Reporting

Unfortunately, many close processes are simply run from memory and out of habit, often with no solid desire to improve or change the status quo.  Some organizations don’t realize there’s a better way.

Today’s post highlights the 6 key challenges many organisations face as they look to transform the financial close process.

Now is the time to identify and address each of the following 6 challenges to set your organisation on a path to real change and reimagine your financial close.

1. Ageing, Fragmented & Incomplete CPM Systems

Corporate performance management (CPM) processes supported by spreadsheets and a complex patchwork of other software can actually slow down Finance and may result in significant duplication and rework.  How?  Well, this fragmented approach to supporting close processes creates added technical complexity and administrative burden on the Finance team.  That burden includes moving and reconciling data, constantly managing metadata in multiple systems, monitoring data and managing security between fragmented products or models (see Figure 1).

All of these aspects dilute the ability of Finance teams to focus on driving performance and supporting critical decision-making.  These problems are only further compounded when there is a lack of key functionality to deal effectively with complex requirements, such as consolidating and eliminating inter-company balances automatically, without rules, or effectively handling alternate hierarchies without data duplication.

2. Increasingly More and More Complex Regulatory and Internal Requirements

Complexity increases the moment an organisation becomes international.  Why?  Well, the immediate requirement to handle complex ownership structures, multiple currencies, inter-company trading and other aspects across geographies and with different tax treatments can really explode the work of a Finance team.

Plus, the regulations governing how organisations report their results and comply with relevant local and industry rules only continue to increase in complexity once an organisation expands internationally.  Add to that the short filing timeframes given to organisations, and it becomes clear that robust and efficient systems and processes are the order of the day.  In the US, for example, Section 409 of the Sarbanes-Oxley (SOX) Act requires that public companies report any material events that result in a change in the company’s financial condition within four days of the event.  The deadline for the filing of the 10-Q (quarterly report) was also recently amended to 40 days after quarter end from 45 days.

Such regulatory requirements are pushing the office of the CFO towards not only faster closing and reporting but also the injection of more regular insights into financial results.

3. The Right Information at the Right Time

Why is getting the ‘right information at the right time’ so difficult?  It comes down to the effectiveness of the Finance processes.  The biggest issue is not having a single version of the truth and continuing to run a fragmented close process that requires trying to keep everything glued together.  That creates a less-than-ideal situation, and there’s entirely too much time being wasted to integrate, reconcile and validate data – causing unnecessary delays to key decisions.

An Accenture research report from December 2020 surveyed 450 CFOs and other Finance leaders at companies with at least $1B in annual revenue.  A key finding especially stood out: while nearly all (see Figure 2) respondents believe operating with real-time data is critical to navigating disruptions, such as the recent pandemic or the threat of a recession, just 16% of respondents are being informed by such data at the scale that’s needed.

These challenges are not limited to financial consolidation and close processes.  For many companies, financial processes are too manual and not yet automated or standardised, leading to time-consuming data entry (and re-entry) for reconciliations, reclassifications, and adjustments.

4. Too Many Manual Steps in Processes – Limited Automation

Are manual steps in Finance processes really that bad?  It’s true that some level of manual processes in small to mid-sized organisations may not be a huge problem.  It really all comes down to manageability.  As organisations grow or become more complex, manual processes add unnecessary risk, costs and time delays – all of which can accumulate over time and be very damaging.

Manual steps can result in the following pitfalls:

• An inconsistent closing calendar and checklist – creating different versions of the truth and a lack of common understanding of when actions are taking place
• A lack of quality validated data from underlying sources or ineffective data aggregation – resulting in reporting errors and poor decision-making
• A high level of manual journal entries in the close process – causing delays that can result in late filing
• Ineffective procedures for validating results – potentially sharing incorrect data in reports and with stakeholders
• Intercompany accounting and reconciliations are overly time-consuming – resulting in complexity that becomes too much and that often cannot be reconciled in the time available

All of these potential pitfalls only emphasise why automation is the way forward.  And today, the most successful organisations are embracing automation by using financial close software to better equip their people and to ensure they have agile and effective processes.

5. Limited Inter-Period Reporting Capabilities

Most organisations focus considerable time and resources on monthly, quarterly and annual reporting requirements.  So why do very few organisations use ‘inter-period’ (i.e., daily or weekly) reports?  The reason is very often because, historically, Finance processes and technology did not allow for inter-period reporting.  Finance teams had a lot of manual tasks just to complete the existing reporting cadences, which left little or no time to consider any additional regular data points or insights.

Now organisations are discovering they have vast amounts of valuable information that’s collected every day in ERP, CRM, HCM, Supply Chain and other systems (See Figure 3) – information that has not typically been leveraged to support daily and weekly operating decisions.  The organisations that can harness these large volumes of operational, and often, transactional data to identify key trends and ‘signals’ can move to support daily and weekly decisions.  Such decisions can positively impact month-end financial results and therefore the performance of the overall organisation.

6. Lack of Transparency, Auditability & Controls

Many legacy CPM and/or connected Finance applications provide file-based integration with source systems, but key advantages come with having full, direct integration between CPM and GL/ERP and other systems.  Why are those advantages so important?  Well, a lack of robust data integration capabilities creates a multitude of problems, including cumbersome manual steps, wasted resources and time, risk of errors, poor financial data quality, lack of traceability and lack of auditability.  Thus, the effectiveness of the financial close and reporting processes is fully dependent on getting timely and accurate data from GL/ERP, HCM, CRM and other systems.

The loading, mapping and transforming of data from source systems to CPM solutions can be especially cumbersome and fragmented without highly connected and business-user-managed tools.  Not to mention, data movement may be reliant on IT resources that are not knowledgeable on both the CPM model and the transformation and validations that must occur. This issue is even more problematic without the transparency and controls needed by the business to support compliance

How to Overcome the Challenges – A Strategy for Moving Forward

Many legacy Finance teams operate in the form of a conveyor belt production line.  Each person has specific tasks to complete during the close process to generate the required financial reporting – but only once production is complete at the end of the line.

For organisations looking to move away from this production-line approach, now is the perfect time to reimagine the close and effectively address these challenges with the key steps below:

• Define a close calendar to orchestrate and monitor the process on a day-by-day basis.
• Eliminate risk by reducing manual movements of data and automating data feeds/validations.
• Provide clear audit trails and visibility so that there is no question about accuracy and consistency.
• Take advantage of built-in financial intelligence to handle complex financial consolidation (e.g., intercompany eliminations, foreign currency exchange [FX], accounting for partial ownerships).
• Eliminate errors, and drive standardisation by automating reporting.
• Consider further automation opportunities for back-office processes, such as account reconciliations.

At OneStream, we call this Intelligent Finance.

Learn More

To learn more about how organisations are reimagining the financial close, click here to access  OneStream’s Reimagining the Close whitepaper.