leveraging technology to power fp&a
TRANSCRIPT
Leveraging Technology to Power FP&A
Partnered with Adaptive Insights
and Proformative
Sponsor
Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Leveraging Technology to Power
FP&A
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Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Leveraging Technology to Power FP&AJeffrey S. Wuest, President, SynFiny Advisors LLC.
Michael Shannon, Solution Specialist, Adaptive Insights
AGENDA
7
• Financial Planning & Analysis Defined (FP&A)
• Technology impact on FP&A
• Sharing Data, Creating Insights, FP&A Value Add
• Demo of a CPM Suite
• A Business Case for FP&A technology project
• Recap and Q&A
8
FINANCIAL PLANNING &
ANALYSIS (FP&A)
DEFINED
WHAT IS FINANCIAL PLANNING
AND ANALYSIS?
9
The SynFiny Advisors definition:
The critical value creation processes, which requires
a deep understanding of business fluency, finance,
modeling, data systems and processes, and
accounting.
This typically combines financial and non-financial
data as required to create strategic and operational
financial plans.
When done well, these processes are a clear
competitive advantage and thus are viewed as
critical by senior leaders.”
WHICH PROCESSES ARE
TYPICALLY OWNED BY FP&A?
10
Strategic Planning
Budgeting
Forecasting
Management Reporting
Financial Analysis
Capital Planning
Business Modeling
FINANCIAL PLANNING & ANALYSIS
AS GROWTH ENGINE
11
Reconcile
Actual to
Forecast/Budget
Forecast/Budget
Aligned to
Strategy
Improved
Business
Decisions &
Analysis
Deliver
Financial Strategy
via FP&A Systems &
Processes
Lower Cost and Improved
Efficiency/Productivity
• +6% Productivity
• +25% lower SG&A cost
Big Data –
Real Time Data &
Visualization
Real time data (2 to 5x
faster cycle time
Master data enables
analysis
Faster decisions and
actions than competition
Make better investment
decisions
Higher Sales/Lower Cost
• Sales increase of app
+~2% per year
• Cost decrease of app.
+~2% per year
12
TECHNOLOGY IMPACT ON
FP&A
WHERE MOST FINANICAL PLANNING
TIME IS SPENT
13
• Sales
• Cost
• Marketing
• Overheads
• Currency / Commodity
Collect Inputs
• Revenue
• COGS
• Budgets
• Override
• Plugs
• Before and After Tax
Process Data
• Management Reports
• Analysis
• External Reports
Share Output
45% 40% 15%
FUTURE OF TIME SPENT ON
FINANCIAL PLANNING
14
• Sales
•Cost
•Marketing
•Overheads
•Currency / Commodity
Collect Inputs
• Revenue
• COGS
• Budgets
• Reserves
• Before and After Tax
Process Data
• Management Reports
• Financial Analysis
• Cost Analysis
• Budget Analysis
• External Reports
Share Output
10% 30% 60%
LEVERAGE TECHNOLOGY
TO STEP CHANGE FP&A
15
AREA OF WORK PAST TODAY
FP&A Systems Only excel, highly non-standard FP&A tools available.
Input and Processing Too much time spent collecting excel templates or emails
Input and processing happens in the FP&A system
Outputs Unintegrated systems make cutting and pasting a must
Integrated systems enable automated and efficient data analysis and reporting
Closing Books Weeks to Months Days to Weeks
Accounting Systems Slow & poorly designed. Mostly locally, un-integrated systems
Fast & well designed. Fully integrated and standard ERP.
Chart of Accounts No common chart of accounts, Accounts created for each use
Standard chart of accounts. Simplified for business use.
Ability to view details Only high level analysis. Unable to view details
Low level analysis. Drill into all levels of transactions.
“KEY WATCH OUT”
FIX FP&A PROCESSES AND THEN TOOLS
16
Deliver FP&A Process First, Then Tools –
Avoid replacing costly systems when a
financial planning issue arises. Instead,
focus on the real root causes. The root
cause is typically related to work process,
organization design, or company culture.
17
SHARING DATA,
CREATING INSIGHTS,
FP&A VALUE ADD
FINANCIAL PLANNING & ANALYSIS
AS VIRTUOUS PLANNING CYCLE
18
Reconcile Actual to
Budget/Forecast
Update Budget
or Forecast
Improved
Business
Decisions &
Analysis
Deliver
Financial Strategy
via FP&A Technology
ERP to CPM/EPM
Automation used to
understand actuals to
budget/forecast
CPM/EPM Tools support
the creatation of the
future budget and
forecast data needed to
deliver strategy
BI/Analytic Tools
translate data into
insight supporting
both reporting and
analysis
Big Data - Real
Time Data &
VisualizationWork Flow / Social Tools
enable teams to
communicate more
easily about decisions to
deliver financial strategy
FP&A DRIVEN INSIGHTS
FOR THE BUSINESS
19
Other Functions Own FP&A Owns By working together
C-Suite leaders own the business strategy which articulates the plans from today to the future
Developing the broaderfinancial strategy which ensures the future plans are achieved via operations
The business and financial strategies are unified into a single and achievable operational plan
Supply Chain creates the demand and supply plans via ERP systems
Providing a revenue and cost of goods forecast based on units and future pricing/cost expectation.
Unit and Currency sales or cost can be easily explained.
Supply Chain provides detailed level of demand and supply plans via ERP Systems (by sku,country, category)
Developing a detailed mix analysis for both revenue and cost of goods.
Make changes to revenue or cost plans. Especially marketing plans to offset any negative impact of mix
All Functions own providing SG&A budget inputs and understanding their spending
Creates SG&A budgetobjectives and visibility which align to the Financial Strategy
Control and improve SG&A spending to deliver higher savings (more with less)
Sales and Marketing develop trade or marketing plans to build the business
Analyze and assess the viability of the sales or marketing investment choices
Develop and deliver trade or marketing plans which deliver financial strategy
20
DEMO OF THE
ADAPTIVE INSIGHTS
CPM SUITE
21
BUSINESS CASE FOR
FP&A TECHNOLOGY
PROJECT
BUSINESS CASE FOR
FP&A TECHNOLOGY
22
Building blocks to a well written business case:
Business rationale for the change
Scope of the full project
Benefits realized
Changes to company cultural
Required investments or resources
Significant interdependencies
High level timeline
Review and approved
DESIGN CHOICES FOR
FP&A TECHNOLOGY
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High level design choices:
Drives Faster Business Decision Making
Link budget/forecast with actuals
Detailed reconciliation process
Automated/semi-automated with ERP system
Standard Reporting & Analysis
Big Data but no need to integrate from start
Validate or helps cleanse master data
TO RECAP
24
How to use Technology to Power FP&A?
C-level leaders need to be supportive of change
Focus on culture/org/process and then solutions
Expect more from Finance & Accounting systems
Big data to create insights and drive decisions
ERP for lower level, real time analytical data
Work with IT on joint projects to improve data
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A Few Final Items
Sponsor
Questions or Comments?
Contact me directly to continue the discussion:Email: [email protected]: synfiny.comMobile: (513) 884-6134