Corporate performance management (CPM) applications are designed to support specific finance processes such as planning, forecasting, financial close and consolidation, financial and management reporting and a broad range of analytics. What makes purpose-built software applications so valuable in supporting these processes is what’s known in the industry as “financial intelligence.” Why is this important? Because having built-in financial intelligence speeds the implementation process, reduces costs, and ensures the accuracy of the results produced by the application.
Spreadsheets and general purpose relational or multi-dimensional databases may appear attractive in supporting financial processes due to their implied flexibility – but they don’t have pre-built financial intelligence. Ironically, some CPM applications also don’t have pre-built financial intelligence. With these solutions the financial intelligence must be built during the implementation process. When this is the case, the implementation process will typically be longer and more expensive. And, when used in practice, an application that requires custom building of financial intelligence has a higher risk of producing inaccurate results and can be more difficult and expensive to upgrade and maintain. Read on to learn what to look for when assessing CPM applications and the level of financial intelligence that’s included in the solution.
Eight Key Elements of Financial Intelligence
Let’s look at the eight key elements of financial intelligence that should be available out of the box in a CPM software application or platform being evaluated to replace spreadsheets or outdated legacy applications.
A purpose-built financial consolidation engine will perform these steps efficiently and accurately with a significant amount of automation built-in. Solutions built on standard aggregation engines will require workarounds and custom development of capabilities that are inherent in a consolidation engine. Aggregation engines will struggle in completing these steps efficiently and accurately across multiple hierarchies.
In summary, the eight key elements highlighted above, are critical must-haves for purpose-built software applications supporting the financial close and consolidation, planning, forecasting and reporting requirements of sophisticated enterprises.
OneStream Goes Above and Beyond
OneStream’s unified Intelligent Finance Platform (figure 1) is an example of a purpose-built application designed to support core CPM processes such as financial close and consolidation, financial planning and forecasting, and account reconciliations as well as operational planning and analytics as well as AI-powered forecasting and automation. From the start it was designed with a high degree of financial intelligence, suited to meeting the requirements of accurately and efficiently executing these processes in a large, complex enterprise.
In addition to providing out of the box support for the key elements of financial intelligence mentioned above, the OneStream platform provides several unique advantages that other solutions don’t offer:
Extensible Dimensionality – this is the unique capability of OneStream to support corporate standards while allowing users to add the level of detail required for planning and reporting at operations levels. This capability is what allows customers to replace multiple legacy applications with a single instance of OneStream.
Integrated Financial Data Quality – with OneStream, Financial Data Quality is not a module or separate product, but part of the core platform. When it comes to financial reporting, speed and accuracy are of paramount importance. OneStream’s Financial Data Quality Management provides strict controls to deliver confidence and reliability in the quality of financial results.
Data Blending – not all data belongs in a cube, so OneStream provides the ability for customers to capture and blend detailed transactional data, relational data and multi-dimensional data in a single platform. This allows users to perform detailed driver-based planning, or comprehensive analysis and data visualization with high performance, all within a single application.
Solution Exchange – the OneStream Solution Exchange provides over 75 pre-built solutions customers can download, configure and deploy to address additional requirements without adding technical complexity to the application.
Financial consolidation, reporting, planning, budgeting and forecasting are specific processes that require speed and accuracy to perform effectively. Any organization that attempts to use spreadsheets, relational or multi-dimensional databases, or packaged CPM applications that don’t have built-in financial intelligence to support these processes will need to custom-develop these capabilities into the platform. This adds time and cost to the implementation, as well as complexity to the upgrade process. And if these elements are not designed correctly, they could yield inaccurate results.
OneStream’s Intelligent Finance Platform includes the eight key elements of financial intelligence described in this article, as well as the additional capabilities highlighted in order to support the needs of the world’s largest and most complex enterprises. To learn more, check out our Intelligent Finance Video or contact us if you are ready to replace spreadsheets, point solutions or legacy CPM applications with an intelligent finance platform built for the future.