1. What is Financial Performance Management? – Relationship to other “hot” topics – Why we think it’s important to you as CIMA members 2. Performing a self-assessment health check – Effectiveness and efficiency scores – Solution roadmap and business case 3. Implementing a solution – Critical success factors – How-to guide for projects

1. Simplifying Financial Performance Management
Geoff Noble
25th June 2014 at 6.30pm
Prepared by CFO Group for CIMA members

2. Agenda
1. What is Financial Performance Management?
– Relationship to other “hot” topics
– Why we think it’s important to you as CIMA members
2. Performing a self-assessment health check
– Effectiveness and efficiency scores
– Solution roadmap and business case
3. Implementing a solution
– Critical success factors
– How-to guide for projects
4. Summary and Q&A

3. 1. What is Financial Performance
Management?
Outcome: Be on the same page in terms of what financial performance
management is and why it is important to you

4. Financial Performance Management (FPM)
§ Planning
§ Budgeting
§ Forecasting
§ Closing
§ Consolidation
§ Management Reporting
§ Statutory Reporting
§ Regulatory Reporting
§ Scenario Modeling
Corporate / Group
Operations / Divisions

5. We often find these processes supported by:
• Multiple systems requiring data transfers
• Manual intervention and adjustment
• Big spreadsheets with Macros that sometimes fail
• Word and PowerPoint for presentations
• Lots of copy / paste
• Lots of checking and re-checking
• Key person dependencies when failure occurs
But the complexity in these multi-step fragile processes is
often “unseen”, with bottlenecks and failure points costing
an enormous amount of time and effort.

6. Great potential opportunity by simplifying FPM
Add more value
Free up time
Reduce costs
Reduce effort
Streamline processes

7. Relationship with other “hot” topics
• Business Intelligence (BI)
– Focused on reporting and analysis and can be seen as a solution to FPM
– Not designed for managing the processes of planning, budgeting, forecasting,
scenario modeling, closing, financial consolidation, and disclosure
– Can inform the planning processes of financial performance management
– BI tools are used in financial performance management for analytics
• Big Data
– New type of software and technology to handle massive data volumes
– Can inform the planning processes of financial performance management
• Integrated Reporting (IR)
– IR is about concise report content focused on value creation over time
– Financial and non-financial measures
– Financial performance management software capable of handling IR
– IR can be part of your financial performance management initiative

8. We think FPM is particularly important for
CIMA members because…
CFOs are telling us:
- Want Finance to become business partner / advisor / catalyst / strategist
- make time available for analysing information
- proactively bring opportunities to the business
- Need to reduce the cost of Finance
- streamline processes
- off-shore the mundane
- beat the top performer benchmarks for finance costs % revenue
- Improve quality and timeliness of performance information
- Deliver the right information to the right people at the right time
… automating and simplifying FPM supports all the above and CIMA
members have the right qualifications to make this happen

9. 2. Performing a self-assessment health
check
Outcome: Know how to assess your FPM health and create an
FPM roadmap and compelling business case

10. If you don’t do this, a terrible thing will happen
NOTHING!
“I get all the information I ask for”
“They don’t realise I was up to 2am preparing that forecast”
“But it’s OK, we get by”
“Finance seems very responsive”
“With all the copying and pasting, checking and re-checking,
every iteration of the budget nearly kills us and
there is absolutely no time for analysis.”
“But it’s OK, we get by. We have to.”
“IT thinks we should have a dashboard. Sounds good.”

11. How to self-assess your FPM processes
• Interview the key stakeholders of each FPM process
– Recipients of the output
– Contributors in the process
• Assess current situation by scoring processes out of 10 for:
– Content effectiveness
• Relevance
• Accuracy
• Timeliness
• Alignment (e.g. Budget to Strategic Plan)
– Process efficiency
• Time (benchmarks are available)
• Effort
• Cost
• Satisfaction
• Rank the processes in order of importance to fix

12. FPM Scorecard
! Effectiveness!of!output!(0010)! Efficiency!of!process!(0010)! Importance!
FPM!Process! Relevant! Accurate! Timely! Aligned! Time! Effort! Cost! Satisfaction! Priority!
Strategic!
! ! ! ! ! ! ! ! !
Planning!
Budgeting! ! ! ! ! ! ! ! ! !
Forecasting! ! ! ! ! ! ! ! ! !
Closing! ! ! ! ! ! ! ! ! !
Financial!
! ! ! ! ! ! ! ! !
Consolidation!
Management!
Reporting!
! ! ! ! ! ! ! ! !
Statutory!
Reporting!
! ! ! ! ! ! ! ! !
Regulatory!
Reporting!
! ! ! ! ! ! ! ! !
External!
Reporting!
! ! ! ! ! ! ! ! !
Board!
Reporting!
! ! ! ! ! ! ! ! !
Scenario!
Modeling!
! ! ! ! ! ! ! ! !
Operational!
Planning!
! ! ! ! ! ! ! ! !
Operational!
Reporting!
! ! ! ! ! ! ! ! !
!

13. What is required to score a 10?
• For each process, identify what could be done to get a 10:
– Identify the existing reports, usage and the issues with them
– Outline what new reports are required and rationalise existing
– Map out the steps of the existing process identifying bottlenecks
• Look for copy / paste to Excel, Word and PowerPoint
• Look for manual intervention and manual adjustment
• Look for failure points and duplication of effort
– Design a new streamlined and ideal process in outline
– Estimate the existing effort and future effort (75% saving)
• Document a FPM roadmap
– Quick wins: that can be implemented now within existing “business as
usual” budget or other available budget for this financial year
– High priority: Next financial year priorities and budget required
– Future: Roll-outs in future years based on priority

14. Create a compelling Business Case for
the implementation of FPM
• Quantify the hard $ benefits of getting a score of 10
– Effort savings (FTE)
– Cost savings ($ calculated from the effort savings in FTE)
• Note the opportunity to re-deploy staff to value-adding activities
• Quantify the soft benefits of getting a score of 10
– Better quality plans, budgets, forecasts, actuals
• More iterations of plans, budgets, and forecasts
• Relevant, accurate, timely, consistent information
– Less risk of reporting the wrong numbers
– Higher staff satisfaction
• Quantify the costs and return on investment
Add more value
Free up time
Reduce costs
Reduce effort
Streamline processes
– FPM software fees and hardware costs or SaaS costs
– Training and implementation services
– Demonstrate return on investment is good based only on cost savings

15. 3. Implementing a solution
Outcome: Know what we have found the critical success
factors to be and how best to approach the project

16. Critical Success Factors for a FPM project

17. Critical Success Factors

18. What are you currently using?

19. …and no, the solution is not Excel!
…alone.

20. Financial Performance Management software
• The software industry calls it xPM
FPM
CPM
BPM
Large software
vendors
PM
EPM

21. Most software vendors have bought
multiple products for FPM
Disclosure
Management
tools
Strategy
Management tools
Consolidation tools Planning tools
Closing tools
Analytical tools
Data Integration tools
Forecasting tools

22. Pitfalls using multiple products
• Multiple specialists
• Too many cooks
• Cost é
• Time é
• Complexity é
• Value ê

24. Use a single software product not many
Planning
Budgeting
Forecasting
Closing
Consolidation
Management Reporting
Statutory Reporting
Regulatory Reporting
Scenario Modeling
Group / Corporate
Operations / Divisions

25. Critical Success Factors

26. Typical approach to projects
• The traditional project team:
– Project manager
– Business analysts
– Technical specialists
• This approach falters when:
X The project manager is generic and not experienced in financial
performance management and can’t allocate the required tasks
X The business analysts are generic and do not understand FPM or consider
the natural built-in financial intelligence and capabilities of the software
X Technical specialists build the system based on documented requirements,
leading to poor use of software, protracted development and customisation
It doesn’t have to be this complicated…

28. It is easy with a qualified Solution Designer
Central and key project role.
They define and design the solution.
Their qualifications include:
– Understand finance and management accounting
– Understand financial systems
– Strong analytical and problem solving skills
– Can communicate in a visible, logical and persuasive way
– Can see the big picture and also have an attention to the detail
– Interested in software and how to get the best from it
– Collaborative work style
CIMA members are ideal to take on this role…

29. Critical Success Factors

31. 1. Vision: Deliver a unified system for financial performance management across the organisation
providing an single accessible source for all financial performance information
4. Data Model: 5. Processes: 2.Goals: 3. Outputs: 6. Data Sources:
Business
logic and
financial
rules
• Less effort and
pain to produce
the information
• More relevant
information
• More accurate
and consistent
information
• Transparent
rules and
assumptions
• More timely
delivery of
information
• Less costs to
own, maintain,
run and use
• Flexible platform
to meet future
needs
Management
Reports
Statutory
Reports
Scenarios and
Analyses
Ad Hoc and
other outputs
Dimensions:
• Periods
• Scenarios
• Categories
• Currencies
• Accounts
• Entities
• Products
• Customers
• Other
Financial
systems / GL
Other
sources
Manual
Input
Operational
systems
Management Actuals
Plan
s
Budget
s
Scenario Modeling
Plans, Budgets
and Forecasts
Dimensions and
logic to support
outputs
Statutory Actuals
Forecast
s
Timetables
Workflows
Approvals

32. Build a prototype in the software during design
Data Model: Processes: Outputs: Data Sources:
Dimensions,
elements
and
hierarchies
Management
Reports
Statutory
Reports
Scenarios and
Analyses
Ad Hoc and
other outputs
Dimensions:
• Periods
• Scenarios
• Categories
• Currencies
• Accounts
• Entities
• Products
• Customers
• Other
• data model dimensions
• dimension elements
• dimension hierarchies
• data entry form for test data
• selection of final reports
Simple
Manual
Input
Plans, Budgets
and Forecasts
Dimensions to
support outputs
Complete the:
… then add:
• calculation logic
• process workflows
• data entry forms, and
• automatic data loading
• additional reports and analytics
in process priority order over time
according to the roadmap.

33. Critical Success Factors in Summary
1. Right software
2. Right people
3. Right approach
Take any away
and the project
will likely fall
over.

34. Benefits we have seen from applying this
simple top-down methodology
ü Successful implementations of FPM systems
– On time, on budget, on scope
ü Get the right numbers out faster to the people that need them
– With less pain and effort
– With reduced costs
ü Happy users
– High staff satisfaction in both Finance and the business
ü Provide far more time for analysis…
– Finance to become the partner as intended proactively introducing
opportunities to the business

35. 4. Summary and Q&A

36. Financial Performance Management

37. Financial Performance Management

38. Approach to simplifying FPM…
• Perform a self assessment scoring each process for
effectiveness and efficiency out of 10 and rank them
• Prepare roadmap and business case to get to 10s
• Implement the unified vision in stages
• Combine three ingredients for a successful project:
• Right technology – Pick unified to keep it simple
• Right people – CIMA members ideal to design solution
• Right approach – Top down from outcomes and outputs
Case Studies…please email me for copies
Opinion Leader Lunch Series…www.cfogrp.com/events/
Benchmarks…please email me for details
10

39. Questions?
Thank You!
geoff@cfogrp.com

40. Simplifying Financial Performance Management
Geoff Noble
25th June 2014 at 6.30pm
Prepared by CFO Group for CIMA members