Top 2017 Blog Posts for Finance Transformation

Top 2017 Blog Posts for Finance Transformation

The new year brings about a time to reflect on the previous year – from what worked well to what didn’t work so well. Along with the reflection can come an inspiration to change. Transforming finance to be the true business partner for the organization can be a daunting task – so as you are looking for inspiration to make some changes in 2018 here is a list of our top blog posts on Finance Transformation.

What Does it Take to Achieve Success With Finance Transformation?

“What does a transformational Finance organization look like?  What are some key traits to emulate? Today’s fast-moving and competitive business environment has put a lot of pressure on CFOs to evolve their role, and that of the Finance function, from back-office scorekeeping to strategic business partner. What does that entail?” Read More

What Are the Best Practices in Finance Transformation?

“Finance transformation – the industry has been talking about this for a number of years.  But what does it take to evolve Finance into an agile and transformed function?  Transformation from what to what?  Where should you start?  What are the benefits? These and other questions were the focus of a recent webinar held by Planful.  Based on our work with over 600 customers on transforming Finance processes, we shared best practices and even held a panel discussion with two of those customers.” Read More

5 Critical Steps in Successful Finance Transformation From Accenture

“In an ever-changing corporate world, finance teams have become the first responders. Few are ready to meet the very real demands of that role today, and it’s only going to get tougher in the years to come. To help close the gap we recently held a webinar with Accenture in which Matt Aldridge, a senior principal consultant with a specialty in corporate financial planning and analysis (FP&A) processes, explained best practices pulled from the firm’s recent survey of U.S. and international companies.” Read More

Still looking for more information on Finance Transformation? Check out our On-Demand Webinars – 

The Transformational CFO’s Playbook

Watch the recording of this webinar to learn the best practices transformational CFOs are adopting in their organizations. Find out how they are upgrading their staff with new skill sets and learn how they are streamlining critical Finance and business processes.

7 Tenets of Transformational Finance Organizations

What does it take to evolve finance into an agile and transformative function? Based on hundreds of successful customer implementations, watch this webinar to learn the 7 tenets of transformational finance organizations.  See what’s common in organizations who have successfully transformed their finance function from back office scorekeeping to becoming strategic business partners, driving and supporting decision making across the enterprise.

The 4 Phases of Finance Transformation

Looking at the Maturity Model of EPM within an organization – this webinar looks the different phases your organization is at and the step to take in order to get your finance organization to a transformed state.

Happy New Year!

 

 

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The Perils of Using Spreadsheets for Budgeting, Planning and Forecasting

The Perils of Using Spreadsheets for Budgeting, Planning and Forecasting

Using spreadsheets for budgeting, planning, and forecasting is still a common practice, and a recent survey of senior finance executives shows just how harmful that practice can be. Chief financial officers who allow spreadsheets and email to serve as their main tool for budgeting, planning and forecasting (BPF) run the risk of hurting their companies because of the shoddy data quality and lack of speed typical of these approaches.

A Common Problem

The 2017 survey by CFO Research, in collaboration with Planful, asked 154 finance executives about their systems. More than half of the respondents–55%–said their companies use spreadsheets shared via email as their primary BPF system. But only 6% of the surveyed executives whose companies use the spreadsheets for BPF said they are “very satisfied” with that choice. Survey respondents from companies using spreadsheets for BPF reported a list of problems with the practice.

Figure 1. Survey respondents who use spreadsheet-based BPF, shared via email, report they have repeatedly experienced problems with the following: (multiple responses allowed)

Data integrity54%
Version control45%
Hidden calculations or cells41%
Output errors37%
Long process cycle times34%
Incomplete documentation28%
Security (internal)12%
Security (external)10%

Spreadsheets can be an adequate budgeting tool for certain types of companies, such as early-stage startups with few managers and cost centers. But companies soon grow too complex for the spreadsheet-as a BPF-tool to handle complex organization structures, customer bases, supply chains and market conditions, along with product development and expanding sources of capital. The spreadsheet as a BPF tool is typically inaccurate, and it isn’t dynamic or flexible enough to provide a complete picture for budgeting, planning and forecasting.

Limitations of Spreadsheets

One downside to using spreadsheets for BPF is that they limit the ability of finance to directly link the numbers to actual outcomes or financial results from the company’s business units. That limitation can make it difficult for the CFO to quickly adjust plans and budgets based on real-time events. Enterprise cloud software solutions with planning, budgeting and forecasting capabilities help CFOs collaborate with business unit managers, boosting the accuracy of the planning. The more collaborators that a CFO can include in the budgeting and planning process, the more strategic value those plans carry, and that is difficult to accomplish with spreadsheet BPF.

Another problem with spreadsheets-via-email BPF is that the approach makes it extremely difficult to plan for different scenarios, and to run through different scenarios to see how the company’s planned financial outcomes would change. Spreadsheets generally present only a limited, fragmented snapshot of specific pieces of a company’s business. So assessing specific drivers of that business –profitability based on customer demographic, for example—is usually not possible with spreadsheets. It’s also difficult to analyze how a change to one aspect of the BPF impacts other items.

Running through what-if scenarios with spreadsheets is time consuming, if they are possible at all, because of the complexities of most companies. And without rolling forecasts based on inputs from business units, CFOs are forced into more reactive decision-making, so companies can miss out on opportunities and fail to take advantage before it’s too late. And the pressure for finance to deliver increased value to the business is only increasing (See Figure 2).

Figure 2. Survey respondents believe that, over the next 12-18 months, pressure on their finance functions will increase substantially to:

Facilitate improved collaboration among all key decision makers78%
More tightly integrate BPF processes across the enterprise73%
Deliver faster BPF data71%
Provide better tools and technology to support decision-making69%

Spreadsheet budgeting also leads to longer budgeting cycles, which means a company can be working off budgets and financial plans that are obsolete almost as soon as they are completed. Shorter budgeting, planning and forecasting cycles lead to better business outcomes, and shorter cycles are associated with companies that out-perform their peers. For 55% percent of companies, budget assumptions are already useless just three months after their budget year begins, according to the American Productivity & Quality Center.

Help is on the Way

Most finance executives in the CFO/Planful survey whose companies use spreadsheets via email for BPF—58%–reported that their finance teams “abuses” spreadsheet software by using it for tasks that should be addressed with more sophisticated solutions.

The good news for some companies is that help is on the way. More than one quarter of the survey respondents with spreadsheets for BPF—26%– said they expect to be using an enterprise software solution within 18 months. The CFO can take advantage of an enterprise solution deployment by allocating more finance resources to analytical work and away from manual processes.

Enterprise solutions can shorten the time a company needs to collect and consolidate its BPF data, and they can provide better insights into performance. They can also provide a better link between planning and execution of strategic initiatives.

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