Which companies outperform their peers and manage risk better? When IBM surveyed more than 1,200 CFOs in 79 countries, it found that the companies that fared best on those two criteria had something in common: a high level of integration.
That held true across a range of functions, from IT to procurement to marketing. But it was especially pronounced in finance, where companies with an enterprise-wide common chart of accounts, common data definitions, and common processes reported stronger results and had a better handle on risk management.
About one in seven companies can be deemed to have an “integrated finance organization,” or IFO, says IBM global leader for financial management Steven Lukens, which allows their CFOs to be “arbiters of the truth” because they possess the integrated systems that provide the proverbial “single version of the truth.”
While it might be expected that IBM would emphasize the need to drive an information integration strategy across the enterprise, at least one CFO says it’s not just a marketing hook. H. Glen Walker, CFO of the U.S. Postal Service, says his organization has a robust data warehouse that holds all of its financial information and a shared-services center that acts as a key administrative hub, both of which helped the USPS qualify as an IFO. “We haven’t used the term ‘IFO’ to drive our efforts,” he says, “but it is a useful concept or framework to help shape the finance organization.”
Of course, the USPS doesn’t have to worry about one of the key inhibitors to IFO status: frequent acquisitions that leave companies relying on a hodge-podge of systems and processes.