Stay ahead of unpredictable markets with performance management
Finance experts agree: reliable data is indispensable to effective strategizing and profitability. If there is a disconnect between financial planning and performance, that gap can lead to higher costs and profit loss.
A recent CFO Magazine study shows that only 18 per cent of financial experts surveyed believe their organization produces reliable risk data, while less than 10 per cent of financial leaders feel “very satisfied” with the way their organizations report and analyze results. And a staggering 90 per cent say they could be doing more to incorporate data into the decision-making process.
CONNECTING PERFORMANCE MANAGEMENT, DATA AND PLANNING
Performance management (PM) is a strategy for closing the gaps identified by financial experts. Facilitated by cloud technology, PM involves the frequent collection and sharing of accurate data from all branches of an organization, such as finance, HR and operations.
Because data collection is ongoing and not limited to yearly reports and reviews, it provides the most up-to-date, reliable and holistic data. Financial experts can then use these measurements to make long-term decisions. At the same time, they have the flexibility to tweak their strategy as continuously updated data present new challenges and opportunities.
There are three characteristics of PM that give organizations agility and control over future profitability, even during uncertain economic times:
- accurate and speedy reporting of data across the organization
- comprehensive planning for future trends and opportunities
- transparent cost and profit analysis
AGILITY AND WORLD-CLASS PERFORMANCE
Unfortunately, even the best-laid plans falter when they’re too rigid or not adaptable to new circumstances. And some external environmental changes happen faster than strategy can be executed.
A recent study found that IKEA, Toyota and Volvo, three corporations singled out for their track record of high performance, share one key characteristic: the agility to hit the ground running in situations of sudden change.
ROLLING QUARTERLY FORECASTS
To be truly agile, operations and finance must collaborate to refresh corporate forecasts on a regular basis, which facilitates a more flexible response to fluctuations in business.
For many organizations, the traditional annual budget can no longer keep up with today’s volatile market. On its own, it isn’t enough to drive an organization’s agility or competitive edge.
That’s why rolling quarterly forecasts have become an increasingly popular alternative for companies that want to embed agility into their budget and forecasting process. This shift away from traditional measurements is a game-changer.
PERFORMANCE MANAGEMENT FOR THE CPA
Performance management can help CPAs remain agile and competitive in a business environment where the ground is always shifting.
With meaningful data and environmental analysis, strategic PM offers you the right tools to better forecast, analyze and control future outcomes for your organization while remaining flexible and responsive to change.
Learn more about how to enhance your organization’s bottom line and sharpen your skills in performance management in our new program:
Certificate in Driving Organizational Profit and Performance
Online and in-person learning | CPD: 40 hours
Final capstone session offered in multiple cities