2021-06-16-Gartner-The_High_Price_of_Slow_Decision_Making_7页_291kb

Report Summary: Finance’s New Role in Business Performance Management

1. Performance Issues: An Urgent Challenge

The report underscores that all organizations face pressure to respond faster to business changes. Performance issues, which can be revenue or cost-related, require prompt action but are often delayed. Data shows:

• Only 13% of organizations detect issues before financial impacts.
• 81% take too long to remediate, with average time 34% higher than ideal, costing $5 million annually per issue when slow, versus $2.9 million savings with quick action.

2. Conventional Approach

Finance typically focuses on early issue identification using leading indicators to anticipate problems. However, this method is ineffective—only 13% can anticipate issues, and even fewer (18%) act on thresholds. Reasons include:

• Few organizations link indicators to outcomes.
• Anticipation doesn’t necessarily speed recognition or response due to data limitations and resource constraints.

3. The Better Way Forward

The recommended approach is process compression, focusing on faster recognition and response rather than earlier anticipation. Key strategies include:

• Quickly validate issue materiality to gain business confidence.
• Remove resource constraints to expedite remediation.
  This leads to timely fixes and better financial outcomes.

4. Gartner’s Support

Gartner offers guidance, tools, and benchmarks to help finance leaders:

• Accelerate issue resolution by shortening the time from identification to solution.
• Include best practices, KPIs, and metrics for effective performance management.

5. Key Takeaways

Business performance management requires finance to shift from predictive to action-oriented processes. Organizations can save significant costs by implementing compressed processes and leveraging expert advice.