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Surviving in difficult times


Johannesburg, 27 Feb 2009

The financial markets are distinctly unhappy and recession is a given in the world's major markets. It's time for businesses of all sizes to prepare for the worst and hope they survive the downturn.

However, as bleak as things certainly are in many markets and industries, businesses must realise they are still in control of their own futures and with a little effort will be able to weather the recession, emerging stronger than ever. One area in which all businesses can improve their operations is in the intelligent use of their financial information.

“Surviving a downturn is possible if companies focus on increasing turnover while decreasing costs,” says Marc Scheepbouwer, MD of Intellient. “This is never an easy task, but it is impossible if the business does not have absolutely correct information at its finger tips.”

To lower costs and increase turnover, business leaders need information from their financial records that accurately inform them what their cost prices are, current net profit levels, industry net profit standards, how fixed costs are amortised across products to ensure net profitability and so forth. With this data at hand, it is easier to determine where costs can be saved. Moreover, when the most up-to-date data is available, the data on variances from the corporate budget can further be analysed to improve the company's spending patterns.

The utility of accurate financial data is finding an audience internationally. A survey by the Economist Intelligence Unit of 286 senior executives in America, Europe and Asia on the role of the finance function indicated some key management priorities. One of these was the fact that fast collecting, analysing and reporting financial information has become a critical function to most executives. The survey also indicated that planning, budgeting and forecasting, as well as management reporting are activities most will be focusing on improving in the short- to medium-term.

“Every business has an accountant and these professionals are responsible for the management and accuracy of the company's financials,” adds Scheepbouwer. “Management makes decisions according to these financial figures, although they are usually 30 days or more in arrears and much could have changed by then. This is where the concept of the 'Fast Close' comes into its own.”

By definition, Fast Close is the accelerated financial and management reporting system in pursuit of business value creation. This is achieved through the design and implementation of a stable and focused closing cycle, supported by the optimal use of technology. The result is a solution that provides management with key financial information in as short a time as possible, as little as six days, to enable proactive management decision-making and action.

“Fast Close combines working smarter throughout the month and at month-end, with technology enhancements, in order to close sooner and with less overtime,” explains Scheepbouwer. “It focuses on improving discipline in the finance area and on standardising as many of the pre-close, close, consolidation and reporting processes as possible, across the various business units and operating entities within every company.

“Put simply, it is a process methodology making intelligent use of current best-practice financial, close, consolidation and reporting theory. Fast Close does not mean simply closing the period off earlier in the month.”

The benefits of Fast Close play directly into the trend to more effective performance management in business today in that it drives faster, more accurate business decisions by making accurate information available quickly. It also reduces costs and saves time in the finance department as well as reducing reliance on ad hoc reporting.

Using the correct tools will also see companies doing away with enormous, uncontrolled spreadsheets that contain different information depending on which department or even which person is managing them. It implements strict processes and consolidated packages that meet the needs of all parties as well as the overall corporate goal.

The resultant availability of accurate information for business intelligence purposes will provide management with a clear understanding of the current state of their business units and razor-sharp insight into areas that can be improved. Therefore, in a recession, faster access to accurate financial information is the first step in ensuring the company survives and is in pole position to thrive when the market turns for the better.

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Intellient

As a member of the EOH Group of companies, Intellient (Pty) Ltd is the exclusive local software partner for the Oracle Hyperion EPM solution set that integrates financial management and business intelligence for sustained enterprise performance management.

We provide business intelligence and enterprise performance management (EPM) solutions to mid and large size organisations that require support for their management cycle. Oracle I Hyperion software is used by more than 12 000 customers globally, and over 80 companies locally. Intellient provides dedicated implementation, consulting and training through a team of over 50 Oracle I Hyperion experts. Having completed approximately 400 projects within the Intellient customer base, we offer specialist EPM professional services capabilities.

Editorial contacts

Cecile Doubell-Fourie
Trinitas Consulting
(011) 566 2110
cecile@trinitas.co.za