Sharing the Whole Picture

If a company's decision-makers don't look at textual information at the same time they're reviewing the numbers, they don't have a clear view of either the process or the key information and assumptions that underlie the numbers. In fact, creating truly collaborative planning and reporting processes requires the marriage of the numerical collaboration capabilities of financial applications with the democratic, user-oriented textual collaboration enabled by new Web 2.0 applications. But the key is that the Web 2.0 applications need to be woven into the business process — they need to have the same management controls and security that users demand throughout enterprise applications.

Here's what that could look like: Imagine finance and executive teams regularly communicating their perspectives on corporate strategy and performance results to the rest of the company via online postings (a blog). Picture teams using shared online work spaces to collaborate on documentation associated with planning and reporting, such as strategic plans, budget explanations, variance analyses, and commentary surrounding rolling forecasts. Imagine people throughout the organization using discussion forums to interact with the finance team, and with people in other departments, as they complete their budgets, forecasts, or monthly or quarterly reporting cycles. All of this would centralize and make transparent discussions that otherwise would be hidden in e-mail, where they would be fragmented, impermanent, and unavailable to most of the company.

Current Web 2.0 technologies would also make it simple for users of such a discussion forum to upload all of the supporting Word documents, PowerPoint presentations, and spreadsheets associated with a specific budget, plan, forecast, or reporting cycle. These could then be locked down and archived, so that the company maintained a permanent, fully-searchable repository of institutional knowledge associated with monthly reports, forecasts, and annual budgets. Compared with the alternative — having a centralized plan, but with fragmented supporting documentation stored (or lost) on people's hard drives throughout the company — Web 2.0 technologies offer a clear benefit not only for making decisions, but also for addressing compliance and other regulatory issues.

Project management is another capability that is sometimes included in Web 2.0 solutions. These technologies' lightweight project management features can be used to drive the budgeting, forecasting, and reporting processes themselves, making sure that everyone's on the same page in terms of ownership, deliverables, and due dates. More strategically, project management can also help define and monitor the objectives and milestones required to hit the business's plan. Wouldn't it be great to finally have strategic plans, operating plans, financial plans, and organizational objectives completely aligned and interlocked? Web 2.0 principles can make this a reality.

Performance management systems that leverage the widely recognized strength of BPM software for numeric collaboration, as well as Web 2.0 principles for textual collaboration, can dramatically improve a company's financial management. The resulting feature set can enable more people within a company to participate in the financial planning process with greater transparency, which can result in faster and superior decisions.

As Web 2.0 collaboration evolves, it's logical to imagine extending a finance-based collaboration initiative beyond a company to a broader community, enabling finance professionals across many companies to come together and share best practices, see relevant news and industry content, and access previously unavailable data that allows them to better compare themselves against their peers.

Enabling Strategic Value

Experts agree that effective budgeting, forecasting, and reporting are top prerequisites for a successful company. Yet only a minority of finance professionals have moved away from spreadsheets toward more efficient software applications. Planning and reporting processes have remained largely unchanged for decades. We are now entering an era of efficient, cost-effective tools that promise to improve on those processes by facilitating collaboration among those involved in the processes. In addition, enterprise applications are becoming more affordable, faster to implement, and easier to use, putting them within reach of far more companies than could previously afford enterprise software suites.

By combining collaborative new processes with new tools, companies can truly tap into managers' wisdom across all relevant departments — vastly improving financial management, making it far more strategically valuable, and driving a true competitive advantage.

William A. Soward is the president and CEO of BPM software-as-a-service vendor Adaptive Planning.