The following is an excerpt of Michael Cangemi’s article “The Real Benefits of Continuous Monitoring” published in the May 2012 issue of FEI Magazine. You can download the complete article by clicking here.

What does a major pharmaceutical com- pany do when its blockbuster product goes off patent? Actually, many things, all the while following the proven principle of business success: keeping costs in line. That is why Pfizer Inc. — while launching an innovative strategy to retain sales of its cholesterol giant Lipitor — also launched a continuous monitoring strategy to innovatively control expenditures, with big data analytics and business process optimization. According to Loretta Cangialosi, Pfizer’s controller — who serves as chair of Financial Executives International’s Committee on Corporate Reporting — “With continuous monitoring (CM) systems for our travel and entertainment process and three employees, we can review and act on discrepancies identified by continuously monitoring thousands of transactions in a way that would have required at least 30 employees using traditional auditing methods.” This is the era of big data, business analytics and high- speed computer processing. Big data refers to all possible information in or about an organization. CM systems use automated advanced analytics to sift through the large volumes of structured data, such as financial trans- actions, that comprise a large part of their big data. All of this is very similar to how IBM Corp.’s Watson computer sifts through reams of data to estimate and weigh correct answers that allowed it — a computer — to com- pete against television show Jeopardy’s human champions. So what is a business to do? Figure out how to deploy this foundation technology to run the business better, using the process widely known as BPO, the acronym for business process optimization. And not just for disbursement systems. Consider the tech company that uses monitoring of journal entries to avoid errors during the close and to assist with Sarbanes-Oxley certifications, or the wholesaler that monitors discounts resulting in a half-percent margin improvement. Including and beyond financial systems, financial executives can open up to big think- ing, such as how to address any problem area, or even improve customers’ satisfaction.
The most fun and success one can have in his or her career will come from changing the paradigms. To start, look back, and stay focused on the basic purpose of a business, or even a corporate function. Management guru Peter Drucker defined the base purpose of a business as creating a satisfied customer. How can CM help with this lofty goal? Consider this example, from a letter to the editor of The New York Times from a person heading to Mexico, where her cellphone would not work. She tucked it away in her luggage after making a few calls from the U.S. airport. On her return, she discovered she had actually lost the phone. Arriving home she received a bill for $2,000. Her letter to the Times asked: “When was my cellphone company going to realize the theft — my monthly bill has been in the range of $70 per month for years?”

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