Is your data integrated - and under your control?

• Author: Ricciardi, Lucy R.
• Position: Management Strategy

If you're not sure if you should commit the resources to re-engineering your finance department, think about how integrating your firm's financial management systems may change forever the way you use information.

Do you feel you're working harder than you did say five years ago, trying to keep up with requests from your colleagues for good financial information? It's no revelation that increased competition has placed an extraordinary burden on CFOs today because so many business decisions are based on financial data. However, the demands for accurate, consistent and timely information stretch the limits of what conventional systems can supply.

Corporate finance departments that have traditionally used a variety of systems to handle each of their many functions -- transaction processing, data collection, financial consolidation, management reporting and information access -- no longer can. The new CFO recognizes that this patchwork approach simply can't keep up with the needs of a forward-looking company and that he or she must lead the drive to implement a more integrated approach to provide useful information.

Today's most successful companies are beginning to recognize the long-term benefits of redesigning their entire financial management process. And now CFOs have access to many tools necessary for making such a major change, thanks to the current revolution in computer technology. Incorporating these tools is often the first step in revamping the finance department, so it can directly contribute to the company's success. But technology upgrades alone won't always provide all the answers. You must re-engineer the financial management process, and this requires you -- indeed, your entire corporation -- to rethink your goals. Ultimately, the changes you make at every level should have one purpose: to make information more valuable for corporate decision-making.

ANALYZE DATA? WHO HAS TIME?

The 1980s' wave of corporate mergers and acquisitions left organizations with a variety of financial systems on disparate platforms. Take the month-end close activity: Typically, financial results are sent to headquarters at the month's end in a variety of media and formats, often requiring manual data re-entry. This process and subsequent reconciliations often take so long that month-end close activity never really ends. Many costs are associated with these outdated systems, not the least of which is the frustration felt by financial executives who...