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How FP&A Can Win Executive Friends, Influence Corporate Strategy, and Improve Shareholder Returns 40% By Doing What They Do Anyway

WEBINARTranslating Finance to Strategy1AgendaThe Strategy Execution GapFinance at the NexusCommon Challenges to FP&ATranslating Finance to StrategyCalculating the ROI

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 22Big thinking, marginal resultsMost companies allocate the same resources to the same business units year after year. That makes it difficult to realize strategic goals and undermines performance.Source: McKinsey & Company study (2012)

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 33Strategy and targets are usually not linked Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 4

4Execution isnt easyStrategies are a lot easier to communicate than to execute

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 55AgendaThe Strategy Execution GapFinance at the NexusCommon Challenges to FP&ATranslating Finance to StrategyCalculating the ROI

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 66Finance is expected to execute strategy

Heres the Corporate Strategy Context.Thanks. Great context for the budget. Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 7How do I translate this into budgets which maintain continuity and fit into corporate targets?7We look for ways to reduce the gap

Source: Gartner/FERF presentation at FEI Summit Leadership Conference, May 2013

CFOs Know Technology to Support Decision Making is InadequateSource: modified template from CPM Methods consulting engagement 2012 Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 8So we revert to what we know8AgendaThe Strategy Execution GapFinance at the NexusCommon Challenges to FP&ATranslating Finance to StrategyCalculating the ROI

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 99Guidance is usually too limiting Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 10

LeadershipBusiness Units ---- Functions ---- Regions

FinanceCan you make me a slide that shows how this budget reflects our strategic goals?

All budget requests should be within 3%ExecutiveWhats the point?10Make guidance more specific Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 11

11Data can be ambiguous Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 12LeadershipBusiness Units ---- Functions ---- Regions

Thats okay, just do your bestHow confident are you in this assessment of our corporate goals?4 means higher than average correlationHere is our consolidated outlook4 means strong correlation4 means itis not a 5

Were not sure how to provide scores to correlate with corporate goals?12Minimize ambiguity; maximize the systemic Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 13

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Circumvention is too easyThe gap makes it easier for strong business leaders to get supplemental budget, effectively widening the gap through end runs. Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 14If Im going to hit these revenue targets I need some margin relief and more budgetI can probably find this in the corporate pot somewhere14Make sure end runs can be put in context Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 15

15Improvements are incrementalImproved Planning Tools, Business Intelligence Tools do not address the gap Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 16

Based on your improved analytics, heres the new and improved corporate strategy presentationThanks. Even better context for the budgetStill not sure how I translate this into budgets whichmaintain continuity and fit intocorporate targets?

16Link strategic goals and budgets Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 17

17AgendaThe Strategy Execution GapFinance at the NexusCommon Challenges to FP&ATranslating Finance to StrategyCalculating the ROI

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 1818Bidirectionally translating finance and strategy Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 19

19FPG is unique solutionConstructLibraryDashboard/ScorecardModelingPreconstructed QueriesBI, CPM, ERPFunding ProfilesFeature Function Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 20Strategy Visualized20AgendaThe Strategy Execution GapFinance at the NexusCommon Challenges to FP&ATranslating Finance to StrategyCalculating the ROI

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 2121There is a material impact on the bottom line Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 22

Using Funding Profiles helped us gain actionable insight into our strategic plan and helped us bridge our long-range plan with our operating budget.Vice President of Finance and Investor Relations at Advent Software (NASD:ADVS)Companies that evaluate the performance of business units, acquire and divest assets, and adjust resource allocations based on each divisions relative market opportunities will be worth an average of 40 percent more after 15 years.22A typical ROI case

Copyright 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 2323Q & A24Thank You25