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© Host Analytics Confidential and Proprietary – Slide 1
R
Trends in EPM:
Re-Uniting Financial and
Operational Planning
Argyle CFO Forum
The Princeton Club, NYC
11/6/14
Revision 1.5
Dave Kellogg, CEO
650 830 0332
www.kellblog.com
http://twitter.com/kellblog
© Host Analytics Confidential and Proprietary – Slide 2
The Enterprise Performance Management Process
While (1=1) {
Plan
Close
Report
Analyze
}
© Host Analytics Confidential and Proprietary – Slide 3
We’ve Improved the Wheel Over the Years
• Automation
– Enterprise performance management (EPM) suites automate the process
• Template-driven, automated reporting
– Eliminates Excel cut-and-paste errors and drudgery
• Driver-based planning
– Sophisticated models driven by a core set of key levers
– X-rays of the business
• Rolling forecasts
– Avoids cliff problems at end of year
© Host Analytics Confidential and Proprietary – Slide 4
And We’re Increasingly Taking It to the Cloud
Standard “Cloud 101” Benefits
Faster time to value
Lower total cost of ownership Superior user adoption
Increased autonomy Pace of innovation
© Host Analytics Confidential and Proprietary – Slide 5
But We Never Really Got Outside of Finance
• Wanted to engage the organization in planning
– The software didn’t cooperate
– The deployment model didn’t cooperate
• Planning system as centralized collection point
– Detail in departmental spreadsheets
• Two results
– Opaque buckets-of-money effect
– Over-the-shoulder effect
© Host Analytics Confidential and Proprietary – Slide 6
And We Often Ended Up Making Budgets, Not Plans
Budget Plan
Trended Bottom-up
Built by finance Built by operations
“Theirs” “Ours”
Buckets of money Departmental detail
TBH TBD TBH Job Title
1-2 iterations Highly iterated
Lot of work Lot of thought
All about approval All about resource allocation
Ends up in a drawer Living document
© Host Analytics Confidential and Proprietary – Slide 7
Along Came Big Data
• Unprecedented ability to track and measure
– Sales pipeline
– Marketing funnel
– Product usage
– Customer interactions
– Supply chain
• Desire to leverage in finance as well as operations
– EPS impact of high pipeline coverage?
– Opex increase to avoid raising expectations?
– Revised sales forecast based on product usage?
Plastics.
No, wait. Big data!
© Host Analytics Confidential and Proprietary – Slide 8
And Changed the Conversation
20 Years Ago Today
How are you
feeling about the
quarter, Joe?
Good.
Waterline pipeline
coverage is at 2.2x. The
week 7 rep-level forecast
implies a result of 102%
of plan. The stage- and
category-weighted
forecasts predict 99% and
104% respectively.
So, good.
© Host Analytics Confidential and Proprietary – Slide 9
Resulting in the Creation of a New Role
Commander Data
• Territories
• Commissions
• Capacity modeling
• Planning
• Forecasting
• Pipeline analysis
• Discounting
• Reporting
• Analysis
SVP Sales
VP Salesops
CEO
© Host Analytics Confidential and Proprietary – Slide 10
The Same Thing Happened in Other Departments
CEO
Support
SupportOps
… Services
ServicesOps
Marketing
MktngOps
Sales
SalesOps
The rise of the “ops” person
© Host Analytics Confidential and Proprietary – Slide 11
CFO’s Noticed The Change
“Hey, wait a minute. I spend more time talking to the VP of
SalesOps than I do to my Controller.”
– Anonymous CFO
© Host Analytics Confidential and Proprietary – Slide 12
And Asked Who Are These People Anyway?
• Planning
• Budgeting
• Modeling
• Reporting
• Analysis
FP &A
© Host Analytics Confidential and Proprietary – Slide 13
There’s Good News and Bad News
Good
• Organizations are more
analytical, metrics-driven, and
data-driven in their decision
making than ever before
Bad
• A lot of this activity is
happening outside of finance
• And disconnected from it
© Host Analytics Confidential and Proprietary – Slide 14
Quick Question
“What’s the impact on the board plan Q2 2015 GAAP EPS if
we hire 10 extra salespeople in Europe?”
(If you need to make a phone call to answer, you’re disconnected)
© Host Analytics Confidential and Proprietary – Slide 15
Host Analytics Vision
• Cloud-disrupt the EPM market
– Faster
– Cheaper
– Better
• Re-unite financial and operational planning
– Restore the EPM vision
– New solutions
– Advanced modeling engine
Sales
Finance
Mkting
SC
Services
Integrated
Plan
© Host Analytics Confidential and Proprietary – Slide 16
Sales Forecasting for Fast Growing Companies
• Mid-market cloud GL had limited reporting
• Excel not scaling for a busy FP&A team
• Sales forecasting challenging to manage
across Salesforce.com and Excel
• Weekly sales forecasts disconnected from
quarterly corporate plan and budget
BEFORE AFTER
• Host Analytics Planning Cloud with Sales
Planning
• Clear picture of weekly sales forecast,
integrated to corporate plan and budget
TubeMogul is a video advertising platform. It has 340 employees, is expanding
globally and recently went public.
© Host Analytics Confidential and Proprietary – Slide 17
Sales Planning Starts with Trend Reports
iCIMS, Inc. provides Software-as-a-Service talent management platforms.
Privately-held, profitable 300+ employees, 1,900+ small to Fortune 500
customers worldwide.
• Key Marketing and Sales Leading Indicators
not tied to sales forecast
• Website unique visitors
• Free trials
• Inbound leads
• Sales forecast not tightly linked to corporate
plan
BEFORE AFTER
• Clear view of leading indicators with driver-
based model to predict
• Overall sales forecast
• Rep-level quota attainment
• Commission expense
• Ability to rapidly adjust elements of corporate
plan (i.e. hiring in Sales, Services) based on
leading Indicators
© Host Analytics Confidential and Proprietary – Slide 18
FP&A, Accounting, and Sales on the Same Page
• Disparate ERP, CRM, BI and Excel systems
• FP&A was the bottleneck for data
• Accounting had limited planning and reporting
from mid-market cloud GL
• Sales Ops in Excel hell and struggling to model
commission impacts
BEFORE AFTER
• Host Analytics Cloud EPM Suite with Sales
Planning on top of existing systems and
replacing Excel
• FP&A empowers other teams with data,
models and tools
• Accounting gets multi-dimensional and
presentation-quality reporting
• Sales able to model commission impacts, tie
to corporate plan
Genesys Telecommunications Laboratories, Inc. provides contact center solutions
for mid-sized to large enterprises. 2K employees. $750M revenue. Pre-IPO. Use
NetSuite, Salesforce, Cloud9.
© Host Analytics Confidential and Proprietary – Slide 19
About Host Analytics
Location Silicon Valley (Redwood City, Calif.)
Ownership Private, VC-backed
First Financing 2008
Total Financing $50M+
CEO Dave Kellogg (Salesforce, BusinessObjects, MarkLogic)
Employees ~200
Customers >400
Example
Customers
Abbott, Acciona, Align Tech, Earthlink, Evernote, GoPro, Groupon, Lindt,
Marketo, NEC, Peet’s Coffee, Republic Airways, Sanmina, Sharp, Splunk,
Sprouts, Stryker, Thule, True Religion, Vitamin Shoppe, Zep
Positioning Up-market cloud-based EPM leader (the Hyperion of the cloud)
Growth Fastest-growing company in the space