ima_webinar_ppt_22jun16_final_2

Transform Your Spreadsheets to

Deliver Smarter Planning,

Budgeting, and Forecasting

Tony Levy

Sherri Liao

June 22, 2016

© 2016 Institute of Management Accountants. Inside Talk Webinar Series. All rights reserved. #InsideTalk

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Adam Larson, DES

Senior Manager of

Educational Technology Enablement

IMA

Moderator

6


Featured Presenter

Tony Levy

Business Unit Executive

Business Analytics

IBM Software Group

7


Featured Presenter

Sherri Liao

Performance Management & Business

Intelligence Advisory Practice Lead

The Hackett Group

8


Learning Objectives

Upon completing this webinar, you will be able to:

1. Explain best practices in enterprise performance

management

2. Understand how technology can embrace spreadsheets

to overcome limitations in traditional processes

3. Describe the next steps for moving forward

9


Sherri Liao

The Hackett Group

Trending in Enterprise Performance

Management (EPM)

© 2015 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion

thereof without prior written consent is prohibited

10


2016 Hackett Key Issues Study Finance is focused on enterprise information, cost structure, and focus on strategy

11

Minor Moderate Major Importance for 2016:

Focus Areas for Finance



Source: 2016 Hackett Key Issues Study

Building agility into the organization

Optimizing capital structure

Dealing with increased regulation

Identifying M&A opportunities

Building crisis management capabilities

Formulating strategy with business

Improving decision-making

Ensuring effective governance

Improving cash flow and balance sheet

Managing enterprise risk

Supporting innovation across the business

Achieving and maintaining a competitive cost structure

Integrating enterprise information




12

2016 Hackett Key Issues Study Transformation targeted on planning & performance management / business analysis continues to be the #1 area of transformation investment

Level of transformation activity planned in 2016

Source: 2016 Hackett Key Issues Study

Time Reporting & Payroll

General Accounting & External Reporting

Compliance Management

Revenue Cycle

Cash Disbursements

Treasury Management

Tax Management

Service, Process Improvement &

Function Management

Planning & Performance

Management/Business Analysis




13

Top Performance in EPM

Less costly EPM function and

service delivery

30% Average days to complete a

financial forecast post month

end close

<8 days

Average performance gap

between forecast accuracy

(sales, earnings, cash) of Top

Performers and Peers

1.6x Percent of Planning / Controlling

time spent analyzing data to

provide business insight

58%

Source: Hackett EPM Top Performance Study


Companies that are highly automated or have rationalized

their applications yield higher benefits and return



14

Overall, high automation led to more time on business strategy;

nearly 3X that of peers

On-Line Budgeting

month less to

complete the plan

On-line

Reporting

Distribution

almost 20% less

compilation &

collection

88

120

High All Others

47% 56%

High All Others

Finance Cost as a % of Revenue Rationalized Finance Applications

Low High

1.80%

.82% Total finance

costs

< 50%

Source: Hackett Finance Benchmark Database


Polling Question 1

a) Fully implemented

b) Implemented at corporate level to consolidate divisional /

business unit / regional budgets; staff at divisional /

business unit / regional level load spreadsheet templates

into the system

c) Implemented at corporate level only; no interaction with

the system at divisional / business unit / regional level

To what degree does each part of your finance

organization involved in financial planning and

forecasting use the primary technology platform?

15


Polling Question 1 Results (Placeholder)

16


Top Performers are 4x more likely to have fully implemented

their primary platform fully for Financial Planning & Forecasting

17 © 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion


19%

67%

14%

78%

22%

Fully implemented Implemented at Corporate level to consolidate Divisional /Business Unit / Regional budgets; staff at Divisional /

Business Unit / Regional level load spreadsheet templatesinto the system

Implemented at Corporate level only; no interaction with thesystem at Divisional / Business Unit / Regional level

Peer Top Performer

Primary Technology Platform: Financial Planning And Forecasting


Q2.13 To what degree does each part of your finance organization involved in financial planning and forecasting use the primary technology platform?


Excel spreadsheets remain the most important tool used in

annual planning / budgeting



Systems / Tools Used for Annual Planning / Budgeting

Best

Practice

Best

Practice



Where is World Class Moving Towards?



1 Moving Beyond Finance

2 Focusing on Master Data Management

3 Mobile / Cloud Based Information Sharing

4 Embracing a Rolling Forecast


Polling Question 2

a) Financial statement views only

b) Financial statement views with some linkages to

operations (i.e. supply chain, sales, marketing, etc.)

c) Financial statement views with integrated views to

operations (i.e. supply chain, sales, marketing, etc.)

What types of information does your Finance

organization provide today to support performance

reporting?

20



21


Moving Beyond Finance Emerging Views of Performance Reporting



Effective reporting is moving beyond just Finance and becoming of

cross-functional importance within organizations

Pipeline Analysis

Triangulated Forecasting

Sales Team Effectiveness

Up-sell / Cross-sell

Cycle Time Analysis

Lead Conversion

Sales

Campaign Scorecard

Response Rates

Product Propensity

Loyalty and Attrition

Market Basket Analysis

Campaign ROI

Marketing

Order Linearity

Orders vs. Available

Inventory

Cycle Time Analysis

Backlog Analysis

Fulfillment Status

Customer Receivables

Order Mgmt

& Fulfillment

Supplier Performance

Spend Analysis

Procurement Cycle Times

Inventory Availability

Employee Expenses

BOM Analysis

Supply Chain

A/R & A/P Analysis

GL / Balance Sheet Analysis

Customer & Product Profitability

P&L Analysis

Expense

Management

Cash Flow Analysis

Financials

Churn Propensity

Customer Satisfaction

Resolution Rates

Service Rep Effectiveness

Service Cost Analysis

Service Trends

Service &

Contact Center

Employee Productivity

Compensation Analysis

HR Compliance Reporting

Workforce Profile

Turnover Trends

Return on Human Capital

Human

Resources


23



Focusing on Master Data Management Addressing foundational building blocks for information strategy

Roles & Joint

Stewardship

Technology

Process




Mobile / Cloud Based Information Sharing Delivering decision support faster, real-time

SECURE MOBILE ANALYTICS

TABLET BASED DASHBOARDING

CLOUD BASED DEPLOYMENT

REAL-TIME DATA REFRESH


Software as a Service Deployment Plans (next 2-3 years):



Source: Hackett SaaS

Quick Poll

61% 65%

86% 89%

17% 18% 7% 6% 6%

28%

12% 14% 11%

Financial Management andAccounting

Supply Chain Management BI / Analytics / Reporting Manufacturing andOperations

No SaaS deployment plans

Replace existing applications with SaaS alternative from different vendor

Migrate existing applications to a SaaS version of the same application

Implementation of SaaS applications for new requirements

22%

35%

44%

56%

44%

24% 22%

6% 6% 12% 11%

6%

28%

41%

17%

28%

Human Capital Management Customer RelationshipManagement

Procurement eCommerce




Embracing a Rolling Forecast Abandoning the “old way” of planning

Abandoning traditional budgeting: At the core of most organizations’ planning process is the

budget – an annual and fixed target that’s typically irrelevant by the time it’s approved. As a result,

more organizations are moving toward a continuous rolling process and abandoning the annual budget.

RIP

“too detailed,

takes too long

and adds little

value”

RIP

“drains time

and energy

from the

team”

RIP

“provides the

illusion of

control”

RIP

“reporting is

subject to

spin and

manipulation”


Top Performers are better Business Partners, use shared

services, standardize and automate information production



Business

Value

Information

Service

Placement

Process

Sourcing

Process

Design

Enabling

Technology

Skills &

Talent

Governance &

Organization

Less effort in producing more valuable information

for more strategic Business Partnering

Rationalize activities with

greater usage of shared

services and centers of

excellence

Limited outsourcing

Clear process purpose

Better defined, integrated, less

iterative, processes

Replace spreadsheets with

more scalable, specialized

integrated technology

Smaller, higher impact

Controlling/ FP&A

communities

Higher level of process

governance for

producing information

28 © 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and information that is sensitive, proprietary, and confidential to The Hackett Group the disclosure of

which would provide a competitive advantage to others. As a result, the information contained herein, including, information relating to

The Hackett Group’s data, equipment, apparatus, programs, software, security keys, specifications, drawings, business informa tion, pricing,

tools, taxonomy, questionnaires, deliverables, including without limitation any benchmark reports, and the data and calculations contained

therein, may not be duplicated or otherwise distributed without The Hackett Group Inc.’s express written approval.

www.thehackettgroup.com


Smarter Planning, Budgeting,

and Forecasting

Tony Levy

IBM Software Group

29


Replace the spreadsheet in the middle

30 © 2015 IBM Corporation

MarketWatch Nov. 9, 2005

SAN FRANCISCO

(MarketWatch) - The hefty

$11 million severance

error was traced to a

faulty spreadsheet....


Speed | Integrated Excel user interface


• Explore and analyze data from a variety of different sources—including ERP/GL, OLAP, and BI

• Perform flexible analysis and solve business problems using familiar spreadsheet tools and techniques


Speed | Cloud delivers instant, self-service workspace

© 2015 IBM Corporation

Revenue Plan

Planning

Analytics Book

Profitability

Blueprint

Planning

Analytics Book

Revenue by

Product

Planning

Analytics View

Revenue by

Region

Top 10 Product

Lines

Planning Analytics

View

Planning

Analytics View

Hi Christopher, Welcome!

Looking for a quick way to get

started with Planning Analytics?

Model

Model your business for

planning and analysis

Explore and

Predict Ask questions, discover

patterns and find insights

Report

Build dashboards and

distribute results

Refine

Refine and enrich your

data

32


Agility | Engage users, drive alignment and execution



Agility | In-memory, multi-dimensional planning and analytic engine


Fast Data Loading

Multi-Dimensional Analysis

Flexible Model Definitions

Performance

Real Time

Forms Based Interface Design

Platform for managing

volatility, providing

real-time responses to

complex questions.

• High volume contribution

• What-if analysis

• Meta-data changes

• Data refresh

34


Agility | Continuously align financial plans with corporate

objectives linked to operating plans and market events


Demand Planning

Stock-outs

Throughput analysis

SALES & MKTG HR IT OPERATIONS

F I N A N C I A L

O P E R A T I O N A L

Sales Forecasting

Qualification/close

Promotions planning

Headcount Planning

Attrition rate

Resource effectiveness

analysis

IT Portfolio Planning

ROI/TCO Analysis

Shared Services

Planning

Strategic

Planning

Target

Setting

Operational

Planning

Financial

Planning Reporting Forecasting

Corporate Planning

EPS, market share,

quality, growth…

Corporate Reporting

and Analysis

Weather data, social media, econometric data, IoT, etc.

Predictive Analytics

35


Foresight | Predictive insights automatically from data


Predictive analysis and discovery

Collaborate and share Tell a story

Natural language and guided discovery

Easy access to external data

36


Polling Question 3

a) Currently no

b) Currently no, but plan to

c) Yes, to a limited extent

d) Yes, to a significant extent

To what extent do you use statistical modeling techniques to improve planning & forecasting?

37



38


Foresight | Examples > insight from data


Analyze customer data to identify which customers are likely to leave

and why and predicts the effect on

revenue. Justin can then determine

which customer investments will lead

to more profitable growth.

Analyze accounts receivables to create a predictive profile of

customers—from least likely to most

likely to pay. Prioritize outreach and

communication based on these

profiles for more efficient collections.

39


IBM Planning Analytics Fast, easy, flexible and complete planning and analytics cloud solution


Drive efficiency

Deliver foresight

Dynamically align and adapt

Speed Agility

•Start instantly and grow quickly

•Get ease of use without complexity

•Automate plans, analyses and reports

•Quickly align financial plans, corporate objectives, operational tactics and market events

•Easily adapt systems to changing business strategies and realities

•Make analytics easy for everyone to infer trends, explore drivers, model scenarios and visualize impact

•Leverage external data to anticipate the future

Foresight

40


IBM Planning Analytics Fast, easy, flexible and complete planning and analytics cloud solution


Drive efficiency

Deliver foresight

Dynamically align and adapt

Speed Agility

•Start instantly and grow quickly

•Get ease of use without complexity

•Automate plans, analyses and reports

•Quickly align financial plans, corporate objectives, operational tactics and market events

•Easily adapt systems to changing business strategies and realities

•Make analytics easy for everyone to infer trends, explore drivers, model scenarios and visualize impact

•Leverage external data to anticipate the future

Foresight

41

• Cloud workspace for production reporting, analysis, and planning

• Excel as window to data

• Agility of business structures and relationships

• Finance & operations, strategy & execution

• Solution catalog

• Predictive analysis

• Internal data, external data

• Structured data, unstructured data


Free Trial – Try it!


ibm.com/planning

42


Polling Question 4

43

a) Initiative already underway

b) Improve our process

c) Redesign process and software

d) Nothing

Based on what you have heard what do you believe that your organization should now do?



44


Important notes

45

© Copyright IBM Corporation 2016

IBM Corporation

Insert Division Name

Route 100

Somers, NY 10589

Produced in the United States of America

Month year

IBM, the IBM logo, ibm.com, are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide.

Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the

Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml

This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available

in every country in which IBM operates.

THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED,

INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY

WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the

agreements under

which they are provided.

http://www.ibm.com/legal/copytrade.shtml


Questions & Answers

Use the Q & A Panel to send your questions to our panelists.

Tony Levy Business Unit Executive

Business Analytics

IBM Software Group

Sherri Liao Performance Management

& Business Intelligence

Advisory Practice Lead

The Hackett Group

Adam Larson, DES Senior Manager of

Educational Technology Enablement

IMA

46


Thank You to Our Presenters!

Tony Levy Business Unit Executive

Business Analytics

IBM Software Group

Sherri Liao Performance Management & Business

Intelligence Advisory Practice Lead

The Hackett Group

47


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Final Reminders

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Notification of Future Webinar Schedules

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