Management Information as Catalyst for Financial Awareness and Ownership (Pt. 2)

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Affordable Innovation

The attention for Performance Management tools has taken off in the past five years. Previously, companies were dependent on monolithic, expensive and laborious tools from mostly large software suppliers. More innovative tools, often coming from new vendors, entered the market around 2010. These tools not only have higher ratings in user surveys, but are also cheaper. The favourable price-value ratio of these tools is not only related to the purchase value. We also take into consideration the implementation time and ease to manage the solution. They are based on the latest technological developments and made much more accessible for business users. While in the past it was necessary to request programming work from the IT department, now business users can perform the design of activities themselves. Due to this self-service approach, the provision of information has also become less dependent on a smooth cooperation of the business department with the IT department and / or external parties.

Impact

With the current generation of Performance Management tools, every organization can increase its strength and impact. In addition to insight into realization figures (BI), these tools can contribute to a more effective and measurable implementation of the strategy. Thinking about the future and making informed statements is hereby anchored in the organization. It increases consciousness. And all of this without huge investments in long-term IT processes, which were not uncommon in the past.

Case Study: Management Information at Burg Groep

Millions of households in Europe use the Burg Group products on a daily basis. This internationally operating family business produces, among other things, vinegar, lemonade syrups, cleaning agents, including cleaning vinegar, and liquids for use in and around the car.

Investments in buildings, machines, and the design of the manufacturing process are of great importance for the execution of Burg Group’s growth strategy. Partly because of this, the need for a reliable, detailed, long-term plan for the allocation and control of investment budgets has increased sharply in recent years.

Insight and Control on Investments

Burg Group uses a Performance Management solution based on Jedox technology for insight and management of investments. Via a web application, various employees and disciplines contribute to ongoing and future investment projects for the CAPEX planning.

Who can do what?

Role based security determines who can see and/or enter certain information. Think of purchase prices, lease options, and schedules. The workflow determines who is responsible for the input and who ultimately approves the release of a project. This can be the supervisory board, the management board, or a lower decision level. All involved employees of a project have an ‘inbox’ with an overview of all workflow tasks and by when they need to be completed.

Central Database

All data input is registered centrally and used for numerous reports, analyses, and dashboards. The same fast, central database also contains realization figures that are automatically extracted from the financial ERP package. Thereby, a rolling forecast can be created (latest estimate) with up-to-date realization figures at hand – in different currencies and applying ‘frozen’ versions.

The Right Choice at the Right Time

CFO Arjen Pauzenga of Burg Group: “Deviations in relation to budget can be identified immediately. Our business managers are now able to fine-tune and optimize their five to ten-year investment plans, and maintaining an overview of all planned projects. Employing Performance Management technology increases the control on all our investments and future cash flow. In the short term, we achieve control over our investments, but in the long term we see opportunities to employ Performance Management also for the overall financial performance of Burg Group. Making the right choices at the right time, can further accelerate our growth plans. Family businesses pursue continuity in the long term, but they also consider a good return to be important. We can reinforce profitability consciousness, by applying Performance Management systems.”


This is Part 2 in a two-part series on Enterprise Performance Management – click here to read pt. 1. (Original article published in Dutch Finance journal CM in November 2017)

By | 2017-12-04T14:49:39+00:00 December 12th, 2017|Trends|
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About the Author:

As founder and owner of Jedox partner Celcus it is Steven’s goal to increase the accessibility of business intelligence & performance management solutions and establish Celcus as the alternative in the market.