Financial Performance Management Boosts Charity MissionFinancial Performance Management Boosts Charity Mission

Faster and deeper analysis and reporting breeds better corporate financial performance, but in the case of Opportunity International, these benefits actually make a difference in people's lives. As a charity that specializes in microlending to the world's poor, Opportunity has to make the most of its capital, and better decisions about where and how to lend have helped it extend its reach to 1.1 million aspiring poor people in 28 countries around the world.

Opportunity loans start at as little as $50, and its average outstanding balance is just $150. Conventional financial institutions shun such small-scale lending, as well as the clientele that Opportunity serves, but even small amounts can help a poor person with an entrepreneurial spirit invest in crops, livestock, a retail stall, a sewing machine, a potting wheel or the seed of another type of small business that can lead to financial stability.

Because laws and regulations vary from country to country, Opportunity works through 45 different partners, some structured as banks or savings and loans, and some as non-bank finance companies. Some partners are majority- or minority-owned by Opportunity while others work under contract.

"We have to be flexible and sensitive to the local environment," explains Tim Head, Opportunity's Management Information and Performance Reporting Manager. "The challenge this presents is that we have to deal with 45 different charts of accounts and 15 to 20 different languages."

Until a few years ago, Opportunity relied on manual methods to collect quarterly financial statements and portfolio activity reports from its partners. The reports were stored in Microsoft Excel, and all 45 had to be manually transformed and mapped to a common format and centralized chart of accounts.

"It was a very inflexible and inefficient approach," Head admits. "We knew we had a tremendous amount of information, but we didn't have the tools to make business use of it."

In 2005, Opportunity implemented Hyperion Essbase in order to deliver much more flexible and sophisticated reports and analyses. In place of its old "one-size-fits-all" reports limited to about 20 financial performance measures, Opportunity can now slice and dice current and historical data and deliver much more targeted insight, says Head. "We can produce a dashboard-level report for a CFO focused on financial measures, and a different report for the operations manager that is much more focused on local performance," he explains. "We can also calculate much more sophisticated ratios. For example, sometimes we work in hyper-inflationary countries, and we can now calculate inflation-adjusted return on equity."

The non-for-profit is also doing more trend reporting, looking at two to three years' worth of performance data on client retention, for example, so it can adjust products and underlying financial performance. And instead of looking at partners only through a geographic hierarchy — the only approach previously practical — Opportunity can now look across countries and regions to compare organizations that have similar business structures or that are at similar stages of development; this helps central managers plan and local operational managers gauge where they stand versus current and historical benchmarks.

Better reporting helps meet external as well as internal requirements, according to Don Ingle, vice president of public relations. "When you get a grant from an organization such as the Gates Foundation, USAID or large individual donors, you have to satisfy that those grants are being properly administered," he says. "Internally, we have to make decisions about which countries and which NGOs deserve new funding so they can expand into opening bank branches.

While deeper analysis has been a boon to the charity, it still had the problem of getting data from disparate partner source systems into the Essbase database. In early 2007, Opportunity began implementing Hyperion FDM (Financial Data Quality Management) to enable partners and central administrators to gather and normalize data without all the manual, intermediary steps previously required.

"Once a partner migrates to FDM, we no longer have people filling out Excel spreadsheets, emailing them in and then people on our end checking for errors and loading them into Essbase," says Head. "FDM imports and transforms the data, but it also has a sophisticated account map so we can map our partner source accounts into our centralized chart of accounts." The software has also improved data quality because it has greatly reduced manual data entry.

In the old approach, it took partners two days to issue quarterly reports, but using FDM, about half of the charity's partners are now reporting on a monthly basis, and each report takes less than half a day. At headquarters, Opportunity has also moved to monthly reporting, and turnaround time has been cut from 45 days down to just 20 days.

"It used to be if something happened on July 1, we wouldn't have that reported to us until November 15," says Head. "Now we learn about that by August 20, so we can respond to shifts in local economies or problems emerging at partners or branches."

In 2008, Opportunity plans to move all remaining partners to Hyperion FDM, and it's also moving into predictive analysis. "As we've moved into taking deposits and lending that money back out, we have to be very aware of the patterns of when people might be withdrawing money," Head explains. "You have to be aware of season, agricultural cycles, so we're trying to model some of those patterns and predict cash flow."

Oracle's acquisition of Hyperion last year has had little impact on the customer-vendor relationship, according to the charity. "When we first started with Hyperion, much of this software was donated, and they also donated their time and consulting on an ongoing basis," says Ingle. "That has continued since the Oracle acquisition, which we have certainly appreciated."

In fact, Opportunity plans to expand its deployment to Hyperion Analyzer in 2008 so it can develop online dashboards, and Head says Oracle is donating the software and helping with training to ensure that the deployment is a success.