Maneesh Chhabra

The Future of Financial Management

Oracle Fusion Financials can meet the changing demands of finance institutions.

by Maneesh Chhabra, March 2013

In the financial services industry, chief financial officers are tasked with challenges such as coping with the tsunami of new regulations, scaling operations, aligning finance and risk functions, and delivering credible data to various stakeholders—all while reducing the cost of operations. However, current operations and the underlying IT ecosystem are inflexible and costly, and not configured to scale with the finance function's changing needs. 

An inefficient status quo

Traditionally, financial institutions have sourced and managed finance data in distinct, siloed pathways that span across front and back office systems. The ad-hoc nature of integration across these pathways and the lack of consistent accounting rules and data standards have resulted in a labyrinth-like IT ecosystem that is dotted by black-box custom code, spreadsheet data marts, and extensive manual effort. Drilling down to finance transaction and accessing granular data is a labor-intensive process that requires access to multiple systems and a reliance on people across different teams. Significant effort is spent on inter-company processing, reconciliations, manual journal entries, and managing multiple accounting representation of a single financial event.

Maintaining the current operating environment is very costly—even incremental changes require long lead times and a small fortune in IT dollars to unravel the spaghetti ecosystem. In addition, the lack of data synchronization and standard finance data models across the finance function results in the absence of a trusted, reconciled source of truth at various stages of the finance information supply chain. As a result, many highly paid employees spend inordinate amounts of time on sourcing, manipulating, and reconciling data for reporting purposes, and mitigating data integrity concerns.

The status quo IT environment is expensive to sustain and ineffective in parts, cannot scale with the emerging business environment, and focuses the organization's attention on managing transaction processing rather than the strategic needs of the business.

Enabling an integrated, end-to-end approach

Finance is increasingly recognizing the importance of these challenges and transitioning to a new operating environment with an integrated architecture, which enables consistent, straight-through processing of granular data for reporting and analytics. The integrated end-to-end approach should include the ability to capture granular data for financial events, the deploying of a common accounting rules engine, the implementation of master data management for data consistency, and near-real-time data visibility.

Oracle Fusion Financials, and Oracle’s complementary portfolio of products including Oracle Fusion Accounting Hub and Oracle Data Relationship Management, can enable this end-to-end approach. Oracle’s Fusion Financials platform offers the following capabilities:

  • Extensibility: Oracle Fusion applications and technology are built on 100-percent open standards such as Java and service-oriented architecture (SOA), are engineered to lower the cost of integrations by up to 50 percent, and offer extensive configurations with zero upgrade impact.

  • User experience: Role-based dashboards and extensive spreadsheet and imaging integration improve productivity for finance users.

  • Better, faster information: Embedded transactional intelligence and a multi-dimensional data model enable self-service access to a single source of finance data for instantaneous visibility.

  • Flexible deployment: Oracle Fusion offers multiple deployment options—on-premise, private and public cloud, or a hybrid of these options—to manage costs and risks.

Increased Productivity, Reduced Costs

Oracle Fusion Financials can help achieve meaningful reductions in costs while enabling finance to meet the challenges of the new business environment. The key benefits that financial institutions can garner from Oracle Fusion Financials include:

  1. Reductions in finance IT spend—driven by consolidation of siloed data pathways and custom systems, lower cost of reporting, integrations, and new projects and enhancements

  2. Enhanced productivity—across finance processes driven by features such as role-based dashboards, embedded intelligence, and configurable workflows

  3. Reduction in time spent on data processing and manipulation—across the board, driven by Oracle Fusion's reporting-related innovations such as multi-dimensional data modeling, Oracle Fusion Accounting Hub's data repository, and Oracle Data Relationship Management

Leading financial institutions are transitioning to the target state by selectively modernizing specific systems which support critical finance processes such as corporate general ledger, reporting, and consolidation. The Oracle Fusion platform’s co-existence capability and modular functionality make it easier for financial institutions to achieve the target state in a phased manner, all the while reducing the risk and costs associated with this transition. 

Maneesh Chhabra is a director of Insight and Customer Strategy at Oracle.