15 Business Performance Management Capabilities for Better Compliance
A new study, Improving Compliance Sustainability with Business Performance Management, from Cartesis and Robert Frances Group, proposes that organizations seeking sustainable financial reporting and regulatory compliance shift their focus to business performance management (BPM) technologies. The study also identifies 15 critical BPM capabilities for compliance.
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“Compliance does not come cheaply,” John Van Decker, Sr. Vice President & Principal Research Fellow at Robert Frances Group, said in announcing the new study on Wednesday. “Many firms have gone through a SOX 404 audit and are frustrated at the significant spending for its preparation and little derived business value or improvement.”
Smaller businesses, not yet subject to SOX, will also benefit from the 15 BPM capabilities, which include:
- Comprehensive “built-in” financial controls;
- Global compliance metrics;
- Integration of Financial results with process assessment;
- Role-based Security;
- Automated validation of reporting packages;
- Ability to drill-down to all levels of details;
- Data aggregation functions;
- Transparency and traceability;
- Automation of legacy and manual processes;
- Process monitoring and disclosure speed;
- Single integrated data model;
- Data categories;
- eXtensible Business Reporting Language (XBRL)
“Good compliance is good business and many medium and small businesses are taking steps to put in place internal controls like the larger businesses, even though they are not required to,” Trevor Walker, Vice-President of Product Marketing at Cartesis, told AccountingWEB. “With this foundation in place, it provides better trust and timeliness of data that can be used by everyone across the organization for decision-making. This is just as important to SMB as it is for larger organizations.”
Robert Frances Group found that enterprises are devoting between $1 million and $3 million, per billion dollars of revenue, on consulting services. Yet many have failed to invest in software systems that would reduce the burden of compliance in the future. Savvy firms are now turning their attention to technology frameworks, especially BPM, to reduce some incremental costs incurred in year one of SOX or IFRS and to help sustain compliance.
“What is most critical to smaller clients is the speed and lower cost of implementation without sacrificing compliance,” Walker told AccountingWEB. “Normally this kind of capability is reserved for bigger companies with more money to throw at the problem. We have an SMB offering that can bring all these compliance benefits to any size clients and has accelerators to increase the time to success and brings all our services domain expertise to help companies of any size to benefit. These accelerators bring benefits in.”
The ultimate goal of BPM is to tie together metrics, consolidation, reporting strategy mapping and planning, budgeting and forecasting into a consistent framework. The Right BPM software can ensure the information being reported fairly represents the company’s financial condition by making it easier to access detailed reports, reducing reconciliation processing time by an average of 15 days, integrating seamlessly with a firm’s preferred consolidation system and enabling reconciliation at both balance and invoice levels.