Avartis

Best-in-Class Finance and Performance Management Capabilities

Organizations are under significantly increased pressure to respond to calls from investors and regulators for financial transparency and corporate governance. Yet while compliance with Sarbanes Oxley Acts and International Accounting Standards goes a long way to ensuring that there is transparency in the reported performance of a firm, these standards alone do not ensure that the firm's management team delivers improved overall business performance.

Investors are demanding that management teams demonstrate a higher level of consciousness about what drives shareholder value, and how to optimize the firms resources and capabilities to take advantage of market opportunities or quickly respond to market forces that erode value. Furthermore, investors do not like surprises and expect management teams to demonstrate a higher level of forecasting expertise and understanding of the evolution of industry dynamics and economic environment when making strategic decisions. Strategic decisions typically involve long-term commitments, so it is essential that such decisions are based on accurate forecasts of future performance rather than based on financial statements and other measures of current performance.

Organizations are responding by making substantial improvements to business analytics, performance management and forecasting and planning capabilities at the enterprise level and across specific operational business processes. Many of these are IT-led initiatives that start with implementing solid transaction and control platforms as a foundation for capturing, organizing data and then building an enterprise data warehouse as the centerpiece for decision making across the business. The next stage typically involves implementing software solutions - often with their own separately maintained data repositories - for business analytics, performance management and forecasting and planning.

While this approach may provide some benefit by equipping management teams with more sophisticated software tools and access to meaningful information to support decision making, such projects are likely to be sub-optimized because they fail to capture solid performance management techniques and metrics that allow management teams to really understand the impact of their decisions on the economic model of the firm.

Avartis has worked with many companies in multiple industries to construct performance management frameworks that reflect the current and future economic model of the firm and provide metrics that are closely aligned to financial results, decisions and behaviors across the organization. We recognize that an integrated approach is required that engages executives and employees across the organization, corporate culture and integrated technologies.