The Planning and Forecasting Challenges Faced by Modern Offices of Finance

Corporate financial departments are able to identify general trends in revenue and expenditure, but the information they evaluate often lacks granularity, consistency and timeliness.

That’s because the information collected from the various business units tends to be gathered in multiple formats and from numerous different sources. And these inconsistent and unconsolidated metrics pose a challenge for financial analysts. It’s difficult to make valid comparisons or derive meaningful insight from disparate and domain-specific data.

Furthermore, the offices of Finance are likely to be analysing that data using error-prone spreadsheet-based methods, along with painstaking manual customisation. The result is that Finance departments often find themselves unable to respond in an agile and dynamic manner to business change and disruption. They’re mired in out-dated practices, and their rigid annual approach to planning means their fixed budgets are frequently obsolete before the financial year even kicks off.

There has to be a better way.

For contemporary enterprises to become fully cognisant of their financial operations, they need reliable and consistent information that they can trust to support executive decision-making. They need to enhance their responsiveness, and to align their operations, processes and strategy with their standard Key Performance Indicators.

The demand for a capable financial analysis and planning platform has never been greater. In order to thrive in a volatile business environment, today’s organisations require systems that will deliver rich and timely insight into the performance of their operations. Finance offices need near-real-time access to operational data, along with a forecasting approach that drives superior decision-making.

IBM Cognos is one solution that can address this demand. Cognos delivers the analytical capability to convert an assortment of diverse financial and operational data into useful and actionable business insights.

Cognos Analytic Applications consists of four packaged components. Together these deliver a unified perspective of performance across the key functions and departments that exist in every organisation. The applications discover and model critical business data, translating it into strategic information that can be analysed, reported on, and used to guide executive decisions.

The Cognos Adaptive Analytic Framework empowers Finance departments to measure and monitor performance within individual business units, or cross-functionally. And the adaptive nature of the model lets enterprises refine their reporting platform to cope with evolving business requirements, thus ensuring the analytic content always remains relevant.

In our next article, we’ll discuss each of the four Cognos applications in more details, and show you how businesses can optimise their performance by using these elements to synchronise their financial and operational data.