Financial Performance Management
Transforming public sector budgeting and management
State and local governments are contending with a confluence of issues as the American economy continues to recover from the 2008 financial crisis. While tax revenues remain under pressure, taxpayers are demanding increased investment in infrastructure, schools, and social programs. More effective budgeting processes are needed to help states target spending more effectively, reduce wasteful spending, and improve decision making at all levels.
Financial Performance Management (FPM) is a framework to increase the delivered value for a given taxpayer dollar. FPM goes beyond budget planning to incorporate performance management and outsourcing, strategy management, financial consolidation, and financial and management reporting and disclosure. It is the vision of a strategic, organization-wide budget, built from the ground up through interdepartmental collaboration, and achieving full transparency to taxpayers and other stakeholders.
FPM is an ambitious undertaking that requires fundamental changes to traditional state budgeting paradigms–far more than just deploying a new software application. FPM can challenge even the most sophisticated state finance organizations because no single “formula for success” exists.
Each state needs to assess its current environment, reengineer affected processes, redesign the finance organization, and implement new (or adapt existing) supporting technology. As such, FPM requires an intricately woven combination of process design, organizational change management, technological partnership, and public-private insight.
Today, the budgeting process needs to be addressed in its entirety, from forecast and analysis modeling through publishing, scorecarding, dashboarding, reporting, and data management.