Most businesspeople would agree that increased financial visibility is a good thing, implying that it's easier to understand a business's financial position, performance and prospects. It allows companies to monitor business conditions on an ongoing basis and respond to new opportunities and challenges in order to improve their overall performance.
Financial visibility is critical, not only to the inner workings of a company: It is also important to a company's stakeholders and the marketplace in which it operates. But if you ask how much a company should invest in financial analytics to achieve greater visibility and how much return it can expect from its investment, the answers start to get fuzzy.
Most mid-size to large businesses already have spent astonishing amounts of money on enterprise resource planning (ERP) systems with little or no understanding of what the return on investment (ROI) is or should be.
Too often, little scrutiny is given to ERP expenditures. The decision to buy and implement the technology is often based on necessity rather than calculated benefit. After going through a long and involved implementation process, businesses often find that their performance has not noticeably improved and that there is little to no increase in financial visibility for key stakeholders. So, when companies turn to an existing report writer or a bandaged-together set of spreadsheets, they often find that they have piles of data but no tangible way to make sense of it.
Other problems created by a more traditional approach to financial visibility include wasted time and a higher potential for error when gathering, inputting and cleaning up financial data across disparate systems. Also, access to the information "an be complicated and cumbersome to control and monitor. And, ensuring that this sensitive information is shared with adequate security is a top priority.
Increase ROI With a New Approach
Perhaps it's time to take a different approach -- beginning with financial analytics. By putting a greater emphasis on financial analytics, a company can use its existing ERP investment to achieve financial...
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