3 Steps to Improving Agility in Financial Budgeting and Planning

3 Steps to Improving Agility in Financial Budgeting and Planning

Financial agility is becoming a necessity in the business world, as the world of business continues to evolve and become even more dynamic.

Today, there is rarely an aspect to business that isn’t constantly fluctuating, evolving, and adapting to trends. Business tends to be one giant set of variables, and consistency is a rarity.

It’s on account of all these economic and industry variables that Finance teams require a high degree of agility. Whether the cost of oil is increasing or the demand for products is on the decline, Finance teams need to be able to respond immediately to ensure their budgets and plans reflect these shifting circumstances. Here are some tips for building more agility into your budgeting and planning process, so you can increase, adapt, and reallocate resources as needed.

Reduce Reliance on Spreadsheets and Manual Processes

The first step in improving agility is dispensing of the manual processes that are holding your team back. Spreadsheets, while a common method of tackling Finance, are notoriously cumbersome. Not only is all of the work conducted manually, requiring a significant time investment, but it becomes very difficult to scale and improve budgeting process over time. Instead, many organizations are adopting the budgeting and planning applications found in modern, cloud-based EPM software. These solutions can greatly automate the process, reducing manual work, while providing you with a centralized, cloud-based platform to store all financial data and budget variations. Then you can build your budget and compile reports more efficiently, while minimizing manual errors.  And with most of these solutions, users can continue to leverage Excel as a front-end to the application.

Adopt Dynamic Planning Techniques Like Rolling Forecasts

By this time next quarter, the price of oil could have doubled, the cost of imports and exports could rise, some of your customers may churn, and your business could have added yet another product to its offerings. Nothing about your business remains constant, so your budget can’t either. Basing all of your decisions on an annual budget means you’re operating on static assumptions that will soon become irrelevant, as the drivers of your business change.

A rolling forecast can solve these problems. The rolling forecast can extend to the end of the fiscal year, or beyond, and you can update it regularly to reflect any changes in your industry or business. This allows you to incorporate changes in business conditions as they occur, so your plans and resource allocations are consistently up to date and accurate. It’s with the help of dynamic planning techniques like rolling forecasts that businesses can truly gain the agility needed to respond rapidly to new trends and opportunities.

Move to the Cloud

Cloud-based applications can be important part of gaining complete financial agility, for small, medium and large enterprises. Finance has never been an isolated department. It relies very closely on the exchange of information from other departments across the enterprise. For the best results, your business needs to have the partnership of multiple departments within the company, exchanging data, collaborating on budgets and forecasts, and measuring performance. This can be made much more efficient with the cloud. Cloud-based applications offer both Finance and line of business managers the ability to access all of the data they need, and to update budgets and forecasts anytime, anywhere – in the office, on the road, or while working from home. 

Agile Planning and Budgeting

Agility is greatly needed in the world of Finance, and yet many businesses fail to achieve as much financial agility as they are capable of. This is partly due to the pervasive reliance on Excel for budgeting and planning which, despite offering low agility, is still a highly popular method in many organizations. With a cloud-based EPM software platform, your business can streamline the budgeting process, adopt more dynamic techniques such as rolling forecasts, perform what-if scenario modeling – all of which can greatly improve your financial team’s agility.

To learn more, read our white paper titled “Building the Business Case for Cloud-Based Planning and Reporting” and get ready to gain more agility in your 2017 budgeting and planning.

Download the Whitepaper

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What’s New in Finance Transformation?  EPM, Cloud, Big Data and More

What’s New in Finance Transformation?  EPM, Cloud, Big Data and More

The worlds of Finance and EPM are rapidly changing.  Finance teams are shifting their focus from counting and scorekeeping, to adding strategic value to the business,  They are freeing up time to help managers consider the possibilities and make better decisions that can impact future results.

To gain a better sense of the pulse of the market in 2016, earlier this year Planful sponsored a survey that was executed by Radius Global Research.  The survey was taken by roughly 250 Finance executives in North America.  The key areas of focus included the mission of Finance, key Finance and enterprise performance management (EPM) initiatives, and attitudes toward cloud-based EPM solutions.  Here’s what the results revealed.

MISSION OF FINANCE

Primary Mission of Finance

When asked about the primary mission of Finance, not surprisingly, the top response was to Maximize Company Value (25%).  This was followed by the traditional missions of delivering Timely and Accurate Financial Results (22%), and Allocation of Resources (19%).  But coming in a close #4 was becoming a Strategic Partner to the Business (17% overall, but 25% in large companies). 

Most Important Roles as Business Partner

bigstock-Two-men-discussing-laptop-pres-84887885.jpgThis notion of Finance as a better partner to the business has become an increasingly important role, so the survey included several questions on this topic.  For example, when asked, “What are the most important roles that Finance should play as business partner?” 22% of respondents (27% in large companies) said Improve Financial and Operational Planning.  This response was not surprising as many of our customers are placing a lot of focus on this area.  Other important roles included Identifying New Revenue Opportunities (19%), then Supporting Key Business Decisions (18%).    

What Prevents Finance from Being a Better Business Partner?

In this survey, we also wanted to understand what prevents Finance from being a better business partner.  Not surprisingly, the top response here was Lack of Systems and Tools at 50%.  This was followed closely by Difficulty Accessing the Necessary Data and Reports (48%), then Lack of Time (35%). 

In looking at the survey results by company size, a higher percentage of small and mid-sized companies cited Lack of Systems and Tools, while larger companies more often cited Difficulty Accessing the Necessary Data and Reports.

KEY FINANCE INITIATIVES

In the next section of the survey, we focused more tactically on key Finance initiatives. 

Top Finance Initiatives

Here, I was expecting Finance Transformation to be the top response, but was pleased to see Financial Modeling coming in as the top initiative at 49% of responses.  This was followed closely by Forecasting with Predictive Analytics (26%), then Financial Transformation (41%).  The next four responses broke down like this:

  • 32% – Scorecarding and Dashboards
  • 30% – Continual Planning Processes (rolling forecast)
  • 28% – Use of Big Data or Non-Financial Data
  • 25% – Zero Based Budgeting

Barriers to Achieving Top Finance Initiatives

roadblock.jpgWhen asked the question about the top barriers to achieving their top Finance initiatives, again, Lack of Systems or Technologies (22%) was the top answer, along with High Staff Turnover (22%).  In looking at the survey results by company size, the number of respondents indicating Lack of Systems was even higher in smaller companies. The third most common response was Difficulty Accessing the Necessary Data and Reports (21%).

EPM INITIATIVES

The next section of the survey was more tightly focused on EPM initiatives. 

Top EPM System Priorities

When asked about their top EPM system priorities, 55% of respondents indicated Planning and Budgeting.  This was followed closely by Financial Reporting and Disclosure (48%, but 56% in mid-sized companies), then Analytics (38%).  This response was consistent with what we’ve seen in other surveys and with what we’re seeing with customer demand.

Most Popular EPM Tools (Excel Still Dominates)

iheartspreadsheets_660.jpgWhen asked what software tools are being used for EPM, not surprisingly, the top response was Excelat 57%.  Respondents could select multiple answers to this question, so this use of Excel includes standalone usage and Excel alongside dedicated EPM solutions, as well as ERP systems.  We did see fairly high usage of Dedicated EPM Solutions as well, at 49% overall, and 71% in mid-sized companies. ERP (35%) and In House (32%) were also common responses.

Excel as Part of the EPM System (Excel Is Here to Stay)

It appears that Excel is here to stay.  When asked about the role of Excel alongside EPM systems, 43% of respondents said it plays a significant role today, and 46% said it would play a significant role over the next 3 – 5 years.  Another 36% of respondents see it as a desirable front-end.

Use of Big Data Increasing

According to this survey, the use of Big Data in planning and reporting is fairly low at 28%, but 71% of respondents indicated plans to leverage big data in these processes over the next 1-3 years.  In terms of what type of Big Data is most often used in financial planning, Sales data was ranked the highest at 73%, followed by Web data at 67% and Inventory data at 65%.

ADOPTION OF CLOUD-BASED EPM SOLUTIONS

In the last section of the survey, we took the pulse of the market in regard to usage and interest in cloud-based EPM solutions. 

Use of Cloud-Based EPM Solutions

When asked about the usage of cloud-based EPM software, a surprisingly high 41% of respondents indicated they were already using cloud-based solutions.  This was a bit higher than other market surveys, but very encouraging.  Another 29% said they were evaluating cloud solutions and 28% plan to move in the next 3 years.  This percentage was even higher in small companies – at 41%.

Attitude Toward Cloud in Past 2 – 3 Years

When asked about their attitude toward the cloud, 88% of respondents said they had become much more open (41%) or more open (47%) to cloud-based solutions in the past 2 – 3 years. Only 12% reported no change. This is another good sign of the increasing comfort with the cloud in the market.

Top Concerns about Cloud-Based EPM & Attitude Toward Cloud Security

data-security_2283310b.jpgWhen asked about their concerns with cloud, 63% cited Performance, and 61% cited Security.  However, when asked about their attitude toward Cloud Security, 88% said they had become more comfortable. Only 11% reported no change. The third and fourth cited concerns were Functionality (44%) and Integration (41%), respectively.

KEY TAKEAWAYS

Again, these results were encouraging and validated what we’re seeing in the market with increasing interest and adoption of cloud-based EPM solutions.  More and more Finance executives are getting over their fears of cloud security and seeing the benefits this approach delivers in terms of faster deployment, more Finance autonomy from IT, lower up-front costs, and lower ongoing cost of ownership.

In summary, the 2016 survey validated much of what we’re seeing in the market:

  • Planning/Budgeting is the #1 EPM priority for most companies
  • Excel is the most popular tool for EPM
  • Lack of systems and access to data are top barriers to effective EPM processes
  • Adoption of cloud-based EPM solutions is increasing

To learn more about the results of the Radius Global Research Survey, you can download an infographic that summarizes the results. 

Download the Infographic

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Improving Agility in Planning and Forecasting

In the recent webcast, How Finance Leaders Plan and Forecast with Agility, a survey highlighted that nearly 55 percent of respondents see planning and budgeting as their primary EPM priority.

Yet, despite that goal, an astounding 57 percent of respondents were still relying on Excel as their primary budgeting approach, even though it provides low agility and accuracy. In the webcast, the panelist dug deep to unearth the best tactics for achieving optimal agility in the planning and forecasting process.

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The Biggest Challenges in Budgeting and Planning

The budgeting and planning process is unique to each business, but there is scarcely a company that hasn’t faced at least some challenges. Janet Golla, the Vice President of Planning and Analysis at Capitol Petroleum Group, says the biggest challenge her team has faced pertains to the volatility of petroleum marketplace.

Since the petroleum industry is dependent on fuel for profit, and fuel prices fluctuate rapidly, it makes it incredibly difficult to accurately model their gross budget. Another challenge they had stemmed from the use of spreadsheets. In spreadsheets, their budget consolidation process took days to complete, requiring too much manual labor. Now they rely on a cloud-based Enterprise Performance Management (EPM) solution for their budgeting, which has streamlined the process considerably.

Best Practices for Shortening the Annual Budgeting Process

As Golla noted, the budgeting process can take much longer than needed, especially if a business is relying on spreadsheets alone. Fortunately, there are some best practices that can be implemented to streamline the process. Jim Perry, Senior Manager of Finance and Business Intelligence at iCIMS, outlined some of the best practices his company has found for speeding up the budgeting and planning process, while ensuring high levels of accuracy.

He says the most important thing to keep in mind is to “do your homework all term so you don’t need to cram for the final exam.” By ensuring periodic forecasts are carefully created and reviewed to ensure accuracy throughout the year, they can enjoy a much smoother budgeting process, as the budget can rely partially on past forecasts.

Performance management

Streamline Budgeting and Planning with Cloud-Based EPM

While all three panelists outlined an array of challenges with budgeting and planning, they all agreed cloud-based EPM has been a well-received solution at their companies. Cloud-based EPM can provide a lot of key functions, enabling businesses to gain greater accuracy and agility with finances, while streamlining and shortening the process.

At Capitol Petroleum Group, Golla says the asset management group has a very tight budget, so they utilize the EPM platform frequently. As a result, they’ve been able to increase the accessibility of information through the cloud-based platform. In turn, they experience greater agility that allows them to make more informed business decisions by having all the data they need immediately available to them.

Using Rolling Forecasts to Update Budget Assumptions

Rolling forecasts have the ability to substantially increase the agility of budgets by enabling the business to update the budget plan regularly. Perry at iCIMS says his team is fond of rolling forecasts, and they use them daily for various operational aspects. According to Perry, virtually as soon as a budget has been finalized, it’s no longer relevant because so much in the economy or business will have changed. As such, rolling forecasts are the most practical solution, as it enables his business to change assumptions on a whim to respond to economic or industry fluctuations.

Tools and Techniques to Handle What-If Scenario Modeling

What-if scenario modeling is an essential aspect of budgeting, but it can also be the most challenging. To simplify things, Derek Hazelwood, a financial analyst of Interactive Intelligence, says his team also relies on cloud-based EPM software. It has built-in scenario management functions that simplify the process. The software provides his team a framework for creating multiple scenarios, thus giving them the freedom to put unlimited imagination into their modeling.

Planning and forecasting is no easy process. Due to the innumerable financial variables that businesses face, achieving financial accuracy is a constant challenge. Yet, with the right cloud-based EPM software, businesses can reduce the burden of forecasting significantly, while increasing their agility and accuracy.

To learn more, watch the complete webcast, How Finance Leaders Plan and Forecast with Agility. Then take a moment to view a demo to see Planful at work. You can enjoy a modern approach to finance as you reduce reliance on spreadsheets and increase the efficiency and accuracy of planning and reporting.

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Enterprise performance management (EPM) processes – such as budgeting, planning, financial consolidation, reporting, and analysis – are clearly owned and managed by the CFO and Finance department and can be extended across the enterprise.

The systems used to support these processes are typically evaluated, selected, and maintained by Finance – especially in today’s market where Software as a Service (SaaS) or cloud-based EPM solutions are becoming the favored deployment approach.

However, the CIO and other Information Technology (IT) executives are also important stakeholders and are often asked to be part of the evaluation team.  And in organizations that rely heavily on IT for support of internal systems, the CIO may be asked to lead the evaluation and selection process for new EPM systems.  

In either case, if IT executives are participating in the evaluation and selection of a new EPM software solution, here are 6 key things they need to know about the advantages of cloud-based EPM software over on-premises systems.

6 Key Advantages of Cloud-Based EPM

1.  Reduce reliance on spreadsheets and manual processes – If the Finance organization is reliant on spreadsheets and email for managing corporate processes – such as budgeting, planning, forecasting, financial consolidation, and reporting – they are likely spending too much time on data collection and error tracking and not enough time on value-added analysis. Cloud-based EPM software can help streamline key processes, improve accuracy of plans and reports, and make Finance more productive and efficient.

2.  Provide Finance autonomy and control – In the era of complex, on-premises EPM software, Finance was often too reliant on IT for implementation support, ongoing maintenance, and upgrades of the software. Cloud-based EPM software provides Finance with more control and autonomy, and reduces the burden on IT to install and support these systems.

3.  Leverage investments in ERP and other systems – Cloud-based EPM software is a great complement to existing ERP systems, whether they are deployed on-premises or in the cloud. In fact, implementing an EPM solution, prior to an ERP upgrade, is a great way to limit disruption to planning and financial reporting both during and after the upgrade.  Today’s cloud-based EPM solutions can integrate data from any source, often with direct connectors to leading ERP, HCM, CRM, and other systems.

Cloud-and-Finance-1.jpg4.  Reduce IT infrastructure and support costs – If the organization is currently using or considering costly, on-premises EPM software, cloud-based EPM can provide a lower cost alternative. By migrating its EPM systems to the cloud, the organization can eliminate high-cost, up-front license fees, eliminate hardware and other infrastructure costs, and eliminate ongoing support and upgrade costs.  These costs are replaced by a predictable, annual software subscription that covers all of the software, support, and infrastructure.  

5.  Provide needed scalability to support growth – Building on the prior point, deploying or moving EPM software to the cloud provides a scalable solution that scales and grows with the needs of your business, without the need to purchase additional IT infrastructure. Whether it’s adding more users, integrating more data, or accessing additional modules and features – a cloud-based EPM platform provides the ability to license what your business needs today, with the elasticity to grow and expand over time, at minimum cost and disruption to the business.

6.  Focus resources on mission-critical systems – The last point is an important one. By deploying EPM solutions in the cloud, the CIO and IT can focus resources and time on more mission-critical systems.  I’m not saying that corporate budgeting, planning, forecasting, and reporting aren’t important processes – these are certainly critical to the business.  But these processes and systems are fairly standard across organizations and can easily be supported by third-party software, with some configuration to meet specific business requirements.  By leveraging the cloud, the IT team can put the EPM systems in the capable hands of Finance to focus its resources on other systems that are unique to the business.

The Cloud is Now

Cloud-based software is rapidly becoming the predominant deployment approach for business software in the 21st century.  It has gained rapid acceptance in Sales & Marketing, Human Resources, Customer Service, and now Finance.  Why is this?  Because of the benefits cloud-based software brings to the lines of business, as well as IT:

  • Speed of deployment
  • Autonomy from IT and more self-service
  • Faster innovation, with quarterly feature releases
  • No hardware or infrastructure to set up or maintain
  • Total cost of ownership is lower
  • Security that is even better than most on-premises data centers

To learn more about the power and benefits of cloud-based EPM software, check out our free white paper “EPM in the Cloud.”

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I recently led a panel discussion with three ex Hyperion customers. I always love talking to our customers. It energizes me because I learn something new every time. Plus they help us get better, and they’re generally excited about the product – what’s not to love about that?

The panelists had a great mix of experience.  It included Laura Juarez, Corporate Controller at Cole Parmer, Tim McKeil, Director of Financial Systems at EarthLink, and Paul Peterson, CFO at Philadelphia Mixing Solutions.

All of them had migrated from Oracle Hyperion for enterprise performance management (EPM) to Planful. Between them, they used the full range of Oracle Hyperion’s EPM software offerings: Planning, Financial Management (HMF), and Enterprise.

While the panelists had different reasons that sent them in search of alternatives, they had something in common once they started searching: they all ran very good – and thorough – evaluation processes.

  • They were very clear on their requirements.
  • They involved IT and/or the auditors.
  • They included a range of solutions.

(Lucky for us, they included cloud vendors.)

But one thing they said early in our discussion struck me because it was hard to believe. They were all happy with Oracle Hyperion and were predisposed to stay, which of course led me to ask one question – why?  Why would a happy customer switch software vendors?

Their answer was interesting, but made perfect sense.

During their evaluation, they discovered that the functionality of the cloud solutions they evaluated was more robust than they thought.   And Planful could specifically meet the key EPM requirements they had defined. Once they verified this, the cloud benefits became more important and appealing, adding value in ways Oracle could not. In the end, moving to the cloud became a no-brainer.

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Is Excel Really Going Extinct? No – But We Can Make Better Use of It

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I recently posted a blog article

 highlighting the extinction of Excel that generated a lot of comments.  The headline was intentionally dramatic, but the point was that organizations are realizing the risks of using Excel to support critical corporate processes, and they are reducing reliance on the tool

Microsoft released the first-ever edition of Excel over 30 years ago, back in 1985. Today, it remains the most popular spreadsheet product for business, and is one of the most widely used tools in the Finance department. Just think of all the software that’s come and gone since 1985 … Excel has outlasted Lotus 123, VisiCalc, Multiplan, Symphony and others. Obviously, Excel is doing something right. But there are still major problems with depending solely on Excel for critical Finance processes. Enter, stage right, cloud-based enterprise performance management (EPM) software. Finance departments may still be using Excel in the future, but the heavy lifting is moving to EPM and the cloud, and here’s why.

What Excel Gets Wrong

There are numerous problems with using Excel for critical financial processes, and here are a few of the most common:

  • It’s too easy to create two or more versions of the same Excel spreadsheet, leading to massive inconsistencies among versions.
  • Excel spreadsheets can be emailed, printed, copied, shared, and otherwise let out of the hands of the organization or its approved users. This means serious security issues.
  • People enter data differently. It is difficult or impossible to instill data governance policies.
  • Excel is widely known, so companies spend little time training employees on using it. That means people tend to use it differently, introducing inconsistencies and inaccuracies into the data.
  • It’s just too easy to make a mistake, and mistakes tend to go unnoticed. For example, one finance person at Fidelity left out a minus sign in front of a $1.3 billion loss, leading to an inaccuracy of $2.6 billion. Ouch.
  • It takes too much time to consolidate data, modify, and correct the inaccuracies that get introduced into Excel. It can mean 12 hours or more per month, plus another week for getting things straight for monthly close-out.

What Excel Gets Right

Yet, there are reasons why Excel has dominated the world of business finance for more than three decades running:

  • It’s easy to learn.
  • It’s powerful.
  • It’s flexible.
  • It’s sharable.
  • It’s intuitive.

The Cloud Offers Easier Collaboration

cloud_modeling_2.jpgWhat if you could move Excel-based data management into the cloud, eliminate the problems like data consolidation, security, version control, and governance issues, and get all of the positives without all of the negatives? Moving Finance processes such as budgeting & planning, forecasting, consolidation, and reporting to the cloud with cloud-based EPM software helps overcome issues like these, while allowing you to continue to leverage the powerful benefits of Excel spreadsheets on the front-end. Here users can continue to leverage their Excel skills, using it for tasks such as data entry, reporting, and analysis – accessing a more powerful EPM database on the back-end.  We call this making “intelligent use of Excel.

That’s not all. It makes collaboration around Finance data and processes easier (without the problems with security and spreadsheet version control), not only within the Finance department, but across the organization. Operations, sales and marketing, human resources, and other departments can enter their budgets and forecasts directly into the EPM solution, as well, giving Finance faster access to valuable information and better insight for budgeting, planning, and forecasting.

The Cloud Allows for Easier Data Integration

Not only does the cloud make governance and sharing easier, it also makes it easier to integrate data from other sources, such as ERP, HCM, CRM and other data silos that can be used to budget, plan, forecast and report financial and operating results. Data integration is a key capability of cloud-based EPM platforms, offering numerous advantages over spreadsheets.

 

Long Live Excel

As Mark Twain once said, “the rumors of my death are greatly exaggerated.”  And I did exaggerate the point in my prior blog article.   Microsoft Excel is not likely to go extinct, but many organizations are reducing reliance on the tool as the primary means of supporting critical processes such as budgeting, planning, forecasting and financial reporting.   At the same time, they are finding the ability to leverage Excel as a familiar front-end to cloud-based EPM solutions that handle the heavy lifting.

Want to know more about moving your Finance data and processes to the cloud while leveraging Excel spreadsheets as a front-end?  Download our white paper “EPM in the Cloud.”

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Companies in the Life Sciences industry – such as Pharmaceutical manufacturers, Biotech companies, and Medical Device manufacturers – are facing major challenges.

Increasing demand from aging populations, chronic/lifestyle diseases, treatment, and technology advances are driving growth.

However, new regulatory requirements and efforts by governments, health care providers, and health plans to reduce costs are dramatically altering the health care demand and delivery landscape.  These forces are creating a number of challenges for Finance departments in Life Sciences companies:

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  • Model and forecast predictable and consistent future results

Biotech.jpgIn the dynamic and demanding Life Sciences industry, Finance departments can’t afford to be held back by reliance on spreadsheets and legacy software solutions.  Modern, cloud-based EPM suites can be deployed quickly, offer a low TCO, and can provide the agility needed to grow and adopt to fast-changing markets.

To learn more about how Planful is helping companies in the Life Sciences industry to navigate dynamic markets, download our free white paper “Enterprise Performance Management in Life Sciences.”  You can also listen to a webcast replay from earlier this year, where several Life Sciences companies talk about how they’re responding to rapidly changing business requirements.

White Paper – Enterprise Performance Management in Life Sciences

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The Future of Finance – Coming to a City Near You

The Future of Finance – Coming to a City Near You

2016 is shaping up to be an exciting year in business.  Great Britain’s exit from the European Union and the upcoming US presidential election will certainly impact the global economy.

blog-banner-future-of-finance-roadshow.jpg

If that’s not enough to worry about, add on new regulations such as the new overtime and revenue recognition rules, as well as volatility in oil prices – all of which make it difficult to plan and forecast for 2017. 

Navigating Change

HA_World_2016_Crowd_shot_5-11-16.jpgThe business landscape is changing and evolving. How will your Finance team adapt to these changes and make an impact in your organization? That’s the focus of The Future of Finance Tour 2016.   By attending these events, you can gain insights from thought leaders in Finance and Technology and learn how finance teams are using Planful cloud-based EPM platform to drive improved performance, while staying stay agile and aligned in this global economy.

Join us to hear about the latest industry trends in Finance and enterprise performance management (EPM) from experts such as Brian Sommer and Steve Player.  Learn about best practices from leading finance professionals, as well as Planful executives – including Dave Kellogg and Bryan Katis.  All of this in an interactive, one-day event, coming to a city near you. 

Bonus: Get 5 CPE Credits!

Attendees to the Future of Finance events can earn Continuing Professional Education (CPE) credits. CPE credits are available to CPA’s for General and Breakout Sessions offered during the conference, up to a maximum of 5 hours. In accordance with the standards of the National Registry of CPE Sponsors, credit is based on a 50-minute hour.

To learn more about the tour and find out when the Future of Finance tour bus is coming to your region, check out the registration page here.

We hope to see you on the tour!

Register for the Future of Finance Tour

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How the Pandemic has Changed Everything—and Nothing—for the Office of Finance

If you would have asked me six months ago what the biggest challenge facing finance is, the answer would have been easy: disruption. Market volatility, changing regulations, evolving business models, emerging competitors — you name it, finance has to deal with it.  Then along came COVID-19, and to say it took the meaning of disruption ....

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Best Practices for Streamlining Budgeting and Forecasting

Best Practices for Streamlining Budgeting and Forecasting

Budgeting and forecasting is an integral part of every business, and yet it is often the most inefficient.

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In a recent webinar called Best Practices and Techniques for Budgeting and Forecasting, panelists sat down to discuss the best practices enterprises should implement to improve both the accuracy and efficiency of budgeting and forecasting.

Watch the Webinar Replay
How Are Businesses Conducting their Budget Cycles?

In the webinar, recent survey data was shared that showed 57 percent of respondents were still relying on Excel for their budgeting, either standalone or with other systems. On the other hand, 49 percent were using a dedicated EPM solution. About 80 percent of respondents said they have to do about five iterations of their budget each year before having the budget approved, which could be a key indicator that their budget cycle isn’t operating as efficiently as it should be.

The Biggest Challenges in Budgeting and Planning

The goal of every finance team should be to streamline the process. Many businesses have to do too many budget iterations, resulting in the budgeting and planning process taking much longer than needed. According to Jarrod Lemon, Team Lead of Budgeting & Forecasting at Interactive Intelligence, the biggest challenge his company faces is having to change strategies over time.

At the end of last year, his company introduced a new product to the market, which caused a lot of uncertainty in terms of its impact on sales. It required a lot of different iterations and scenarios before they could settle on a final budget. Businesses require a dynamic solution that can keep pace with business fluctuations, such as shifting priorities, changes in products, or increasing staffing requirements.

The Best Practices for Shortening the Annual Budget Process

The key to improving budgeting is finding more efficient ways to conduct the annual budget without compromising accuracy in the process. Brian Chin, Senior Financial Analyst at iCIMS, says his business has implemented automation, which has greatly improved efficiency. Automation also eliminates manual error, requiring less proofreading. It streamlines data collection, data consolidation and reporting, allowing his team to dramatically improve the efficiency of the budgeting process.

How Cloud-Based EPM Software Can Streamline the Budgeting and Planning Process

Both Chin and Lemon are using a cloud-based EPM software solution for their budgeting and planning processes. Chin says that it’s excellent for reporting, allowing his team to load the actuals into the system and automate the actual vs. budget reporting process. The system does a lot of the work for them, minimizing manual data entry.

The cloud helps to automate the process for Interactive Intelligence as well, making data integration and collection much easier. According to Lemon, Excel doesn’t automate things effectively, so a cloud-based solution is essential for automation. Additionally, the cloud makes gathering inputs for the budget easier because analysts and managers can easily the application, enabling them to make updates as needed.

The Tools and Techniques for Handling What-If Scenario Modeling
EPM software
What-if scenario modeling is an integral part of forecasting. Chin says his company relies on their EPM system to create a single source of the truth. Since the cloud allows for easy data integration, data accuracy improves. While what-if scenario modeling can also be conducted in Excel, but it isn’t as efficient and it lacks a single source of the truth.

What Tools Are Best for Delivering Financial and Operational Results to Internal Management?

According to Lemon, this is where EPM truly shines. In his business, they have a single variance report, and then a series of automations that filter that single report for every department and manager that needs one. The EPM software then packages and delivers the report to each department, so his team doesn’t have to manually pull all of those packages together and email them out. In turn, this has resulted in tremendous time-savings.

Cloud-based EPM software has the ability to greatly streamline the budgeting and forecasting process. With a variety of automation functions, businesses can drastically reduce their workload, while minimizing manual errors. Cloud-based EPM software also improves the capacity for what-if scenario modeling, providing businesses with a single source of truth.

To learn more about improving your budget cycle, watch the complete webinar, Best Practices and Techniques for Budgeting and Forecasting.

Watch the Webinar Replay

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The Role of the BHAG in Budgeting and Planning

The Role of the BHAG in Budgeting and Planning

A typical software implementation includes an assessment of the current state systems, processes and requirements. It should also look ahead to your organization’s strategic plan to determine if any future requirements should be included in the assessment.

Those are a great place to start. But you should also look beyond those two sources of requirements and identify BHAGs — big hairy audacious goals!

What’s Your BHAG?

bhag1.pngFor example, we had a customer that created a set of requirements around a budgeting process based on current and future business needs. The client’s current planning process was very time, and labor-intensive.  It relied upon a large amount of Excel spreadsheets,  as well as FP&A resources and time to create the annual budget. But the client’s centralized planning process was that way because it had a fundamental belief that a planning process can only be controlled when it remains with the core FP&A team.

When we discussed the client’s future goals, the team talked about growing internationally. Their future requirements included many unique and complex requirements, however, their fundamental beliefs remained the same. This would mean replicating the current process around the globe.

How To Create Your BHAGs?

So how do BHAGs come into play? We brainstormed with the client and identified some BHAGs that seemed unattainable, including these:

  • Reduce the annual budget cycle from an average of 3 – 4 months to 4 weeks.
  • Implement a rolling forecast process to have quicker predictions on market volatility.
  • Decentralize the planning process to allow more accurate assumptions from managers on revenue impact.
  • Reduce management reporting compilation time from an average of 3 weeks to 2-3 days.

After whiteboarding our BHAGs, the team threw up their arms and said “we can’t do it.” When we asked why, they said that their company’s fundamental business philosophy prevented them from suggesting operational, process and technology changes that would be required. “It would turn the company on its head,” they said.

This is when we knew we were onto something. The current and future state requirements were fine, but they were based on philosophies that would be difficult to scale and would prevent the client from really doing anything transformative. 

The team knew that they needed to frame these BHAGs and identify the barriers to achieving them for the executive team. This would challenge the executives’ core beliefs, but those four BHAGs could drive real value to the company’s bottom line. The BHAGs must be measurable in terms of time and expected benefits, which should be quantified in order to be effective.

Conclusion

By thinking about BHAGs as part of the requirements and selection process, companies can eliminate barriers that prevent them doing something transformative.   

To learn more about software selection, follow this link to the CrossCountry Consulting web site.

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4 Businesses That Are Thriving with Cloud-Based EPM Software

4 Businesses That Are Thriving with Cloud-Based EPM Software

Cloud-based EPM software is a growing industry, and more businesses, both large and small, are leveraging it to improve their financial processes.

cloud_finance-166328-edited.jpg

Small to mid-sized businesses turn to the cloud in search of cost-effective software solutions and an alternative to spreadsheets. Larger companies turn to cloud-based EPM as an upgrade from their legacy on-premises EPM applications, which are no longer serving their needs. Here are some businesses from a range of industries that have been leveraging cloud-based EPM software with phenomenal results.
1. iCIMS: iCIMS is a cloud-based recruiting software company. Their goal is to help businesses source the best talent available. Their software application became wildly popular, and their business was quickly growing. As a result of their rapid growth, they were soon exceeding their ability to rely wholly on Excel. They found that Excel left them with multiple versions of the truth and unreliable data, and they needed a solution that would improve both accuracy and efficiency.

As a company specializing in cloud-based software, iCIMS was already aware of the advantages the cloud provides. They turned to Planful’ cloud-based EPM software for solutions. Not only did it provide a more scalable solution to meet their growing business needs, but its cloud-based platform was also ideal for promoting data integration and providing a single source of truth.

2. Tandem Diabetes Care: Tandem Diabetes Care is a company specializing in medical devices. Based in San Francisco, Calif., their company was growing incredibly fast, with revenue leaping from $2.5 million in 2012 to just under $50 million in 2014. As such, Tandem Diabetes Care outgrew their Excel capacity and needed a software solution that was not only highly scalable but offered the highest level of accuracy as well. Planful’ cloud-based EPM platform provided them with the ideal solution. Its cloud-based architecture enabled them to scale data easily and efficiently, while managing that data at little cost. It also promoted data integration and offered rolling forecasts, which enabled them to increase the accuracy of their financial planning.

3. Check Into Cash: This company hardly needs an introduction, as they’re one of the leading payday companies in the U.S. Leaping from 360 stores in 1999 to over 1,100 locations today, they needed a software solution that could match their growth. With Planful’ cloud-based EPM platform, they were able to drastically improve the efficiency of their budgeting process, shortening the process from two months to just one week. They’ve also increased the accuracy of their budgets and are able to base their budget plans off of the most recent data.

4. Airborn: Airbor

n manufactures electronics that are used by the military and aerospace companies.
After acquiring subsidies, each of which had their own financial systems, they were finding the varying financial processes to be incompatible with one another. Since their IT resources were lacking, they wanted a software solution that required minimal upkeep and investment. They turned to Planful cloud-based EPM platform as a solution. Since the software is cloud-based, they didn’t need to rely on an IT department to manage their software application. They were also able to consolidate all financial data in a single place, which eliminated the difficulties they faced with multiple financial systems.

Businesses of all sizes have been using cloud-based EPM software with great success. Cloud-based software allows for easy and cost-effective scaling, while not requiring on-premises IT infrastructure and maintenance. Cloud-based EPM software also provides more efficient processes for tackling budgeting, allowing businesses to reduce reliance on Excel and adopt more dynamic planning methods. With the ability to consolidate data in one location, businesses can achieve a single version of the truth, which will increase the accuracy of their plans and forecasts.

To learn more about the benefits cloud-based EPM software can bring to your business, read the whitepaper, “Building the Business Case for Cloud-Based Planning and Reporting.”

Download the Whitepaper

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Evolution vs. Revolution: Which Approach for Improving Budgeting?

Evolution vs. Revolution: Which Approach for Improving Budgeting?

Choosing to make changes to your budgeting process can be a bold move.

It can be intimidating to make any major business changes, but it’s a necessary part of continually improving the efficiency and success of your business model. When implementing a new budgeting method, businesses can either approach the process evolutionarily or revolutionarily. So, which tactic is right for your business? Continue reading “Evolution vs. Revolution: Which Approach for Improving Budgeting?”

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