The Prophix One Platform Supports a More Effective Finance Department

Prophix launched its Prophix One platform earlier this year. CFOs of midsize enterprises should take a look at it because it supports a more effective approach to finance and accounting operations in growing companies. It facilitates the transition of organizations that can no longer make do with work-arounds of existing systems to those with formal, controlled core processes that can be completed faster with reduced risk. The platform performs financial consolidation, account reconciliation and intercompany financial operations, as well as enterprise-wide financial planning, budgeting and analysis and reporting. Prophix One has a data store that automatically integrates data from multiple systems of record to provide a single authoritative source of timely and consistent data for use across multiple processes. This type of data store is essential for supporting artificial intelligence (AI) and machine learning (ML), which are growing in importance as a means of automating foundational analytical tasks, giving financial analysts more time to go deeper into the numbers to provide insights based on their experience and business knowledge. The software brings financial management into the 21st century, enabling the application of continuous accounting concepts as well as integrated business planning (IBP) to enhance staff productivity and contribute to better performance across an enterprise, all in an affordable package for most midsize enterprises.

Companies are discovering the value of rapid planning and budgeting cycles to support critical decision-making in an uncertain environment. These days, expectations for the future can change significantly on a daily or weekly basis, so companies can benefit from making their planning and budgeting processes faster, easier, more relevant, more strategic, more agile and more accurate. Executives and managers must be able to quickly explore different scenarios and outcomes to adapt quickly when opportunities and challenges arise. Decades ago, I coined the term “integrated business planning” to describe a high-participation, collaborative, action-oriented approach to planning and budgeting that allows each business unit to plan their operations and finances in a way that best suits their needs while giving executives an immediate unified view of the entire enterprise. IBP software enables executives to manage ahead of any future event, connecting the tactical trees to the strategic forest.

Prophix was among the first to offer a cloud budgeting and planning platform that enables midsize organizations to connect all their planning activities to simplify the process of collecting and consolidating data from different business units into a company-wide view. Our Business Planning Benchmark Research shows that 66% of companies that directly link planning information have planning processes that work well or very well. By comparison, only 40% of companies that copy data from individual plans, and only 25% where there is little or no connection between plans, say their processes work well or very well. IBP uses technologies such as a unified data environment, workflows and advanced analytic technologies to make planning and budgeting processes more agile and increase their business value. And IBP can make budgeting easier for business unit managers while providing better insight into their operating performance. The software makes updating forecasts and plans faster and easier, and can generate pro-forma balance sheets and cash flow forecasts to provide better financial intelligence to senior executives and boards of directors.

Closing the books is the process of finalizing and summarizing the financial activities of a business for a specific accounting period. It involves completing various tasks to ensure that all revenue, expenses, and other financial transactions are properly recorded, accounts are balanced, and financial statements are prepared. Finance executives have focused on using technology to enhance the productivity (not just the efficiency) of their staff to address the need for resiliency and to deal with a shortage of skilled accountants. This shortage is causing executives to take a fresh look at software that manages the full close-consolidate-report cycle end to end. Prophix also enables enhanced collaboration between staff working remotely and across multiple locations. One important objective is to manage this portion of the accounting calendar as a controlled, repeatable process, which allows enterprises to finish sooner. ISG Research asserts that by 2027, two-thirds of finance and accounting departments will improve their use of readily available technology to close quarterly books within six business days, up from one-half that can do it today.

Prophix’s consolidation system is designed specifically for midsize companies that have evolved to the point where they can no longer rely on manual, spreadsheet-based financial processes. The increased complexities of their operations and financial systems demand the more sophisticated capabilities of dedicated software. These include multi-currency management, journal entry creation, data validation and support for sub-consolidation routines. The application creates fully customizable, detailed audit reports to promote transparency and expedite internal and external audit work. Extensive reporting facilities speed the creation of financial statements at any level of detail.

In addition, the platform automates the intercompany reconciliations process, enabling enterprises to replace manual transaction-level matching of intercompany sales and purchases. Automation makes the staff more productive, enhances governance, control and auditability of this process and can contribute to shortening the accounting close.

A key requirement for a finance and accounting software platform is having a dedicated data store that automatically collects data from all systems and sources needed to support planning, budgeting, consolidation, close management and reporting. In addition to all of an enterprise’s ERP systems, data might be collected from CRM, sales and operations software. This does away with the need for analysts to repeatedly perform data extraction, enrichment or transformation motions from the required source systems, and all but eliminates the substantial amount of time they currently spend on data preparation. Our Analytics and Data Benchmark Research finds that individuals devote a considerable portion of their time preparing data for analysis and reviewing it for quality and consistency issues, activities that are no longer necessary when a platform data store is available. Such a repository also supports the ML necessary for training AI models, especially those used for forecasting and predictive analytics. The need to support ML will increase significantly over the next three years as all providers of software designed for finance organizations will have incorporated some AI capabilities to reduce workloads and improve performance.

Other features of the platform include support for Microsoft Power BI, which gives enterprises with related existing skills and systems a connector that allows them to easily obtain the advantages of this business intelligence (BI) system. The Microsoft 365 add-in speeds the creation of board books and highly formatted PowerPoint presentations that include up-to-the-minute data. Version control is often an issue, as organizations typically go through multiple updates and revisions in preparing periodic reports. Prophix One ensures that people are working with the current version that incorporates up-to-date live data while having the ability to compare with earlier ones. In addition, those who are most productive in Excel are able to create and link controlled spreadsheet models with the platform to perform sophisticated analyses. The add-in also allows organizations that prefer budget contributions in spreadsheets to continue using them for that purpose while also connecting them to a dedicated IBP application.

I recommend that CFOs, controllers and heads of financial planning and analysis in midsize companies assess their current operations to identify opportunities to improve the productivity and working environment for their staff. Both are necessary for attracting and retaining the best talent, especially in a tight market for accountants and analysts. Our research has consistently shown that software is essential to achieving better performance in the department. As they go through the process of identifying potential application providers, I recommend that they include Prophix One in their assessment.

Regards, 

Robert Kugel