What Are the Benefits of a Financial Management Information System?
The ability to reconcile business requirements and IT capabilities is more critical than ever. By doing so effectively, data can be transformed into insights that leaders need to manage a company. Today, corporate business intelligence and the applications, processes and practices that make that data available are key to executive decision-making.
Without appropriate systems, data would flow through companies, but it would be impossible for executives to collect and aggregate the right data to make sound decisions. Instead, it’s likely that valuable data would be as it once was, stashed in organizational silos or lost in transit.
What’s more, critical data might be bypassed by ill-trained personnel tasked with finding and summarizing time-sensitive data. Worse still, data might be made available, but in an inappropriate format. Consequently, executives would be overwhelmed by the struggle to find needed information.
A financial management information system (FMIS) that's designed to help management access the pertinent data they need is a technology that solves these problems. These systems support the achievement of a company’s financial management objectives, including decision-making by financial leadership. Thus, the benefits of financial management information systems are many.
A financial management information system generates data that recipients find to be relevant to their decision-making and reporting processes. The numbers the systems produce for business units relate to business operations or the products they produce. Also, that information is precise and supportive of comparisons.
Another of the many advantages of financial management systems is that, at their best, financial management information systems' designs support not only standard and custom analysis, but also the production of output in a variety of formats.
The system’s front-end interface supports the review of key performance indicators (KPIs), so the chief information officer becomes self-sufficient, rather than rely on analysts to comb through the figures to create an analysis.
Another benefit of a financial management information system is that it's designed to meet the needs of C-level executives and employees alike, which decreases reporting costs.
Leaders play a role in the design and configuration of the FMIS, so personnel tend to extract greater value from the data that’s made available to them.
An FMIS system does away with data structure inconsistencies and varied semantics between multiple systems, which hobble an employee’s efforts to maximize data value. Also, the FMIS aggregates data for decision-making purposes.
Tackling data inconsistencies by standardizing the FMIS leads to the creation of groupwide or business-wide financial KPIs, such as burn rate and operating cash flow. These measures of how well a company is generating revenue are accessible via a dashboard.
KPIs allow leaders to immediately determine if a company is meeting its financial goals.
The FMIS design is analytics-friendly. The system is a flexible one whereby users create reports using the formats they prefer. Consequently, data ownership arguments between fiefdoms are minimized.
As a key executive information system, the FMIS can deliver reports with different detail levels, rather than just top-line data. Also, these systems can break out data from a summary level so users can understand the detail behind any summation.
Beyond cutting costs in procurement and external services, a financial management information system is one way a CIO can consolidate systems, rationalize applications and processes, and lower development, operations and maintenance costs.
One way to support the needs of management and individual employees alike is a financial management information system, which gets a company’s financial information in order. Whether an employee must track costs related to lost freight or a manager needs visibility into revenue streams, a FMIS provides much-needed support.