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Planning Process Considerations

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Planning Process Considerations

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Are you an FP&A Business User that is looking to improve your Planning Process by implementing purpose built software? Get a glimpse inside the decision making process while preparing for a Hyperion Planning or PBCS implementation. Join Bryan Hogan as he addresses all your Planning questions.

What are the different Plan & Forecast types and what are the benefits of each?
What do all the different Planning Buzzwords / Terms really mean for my company (for example, Driver Based Planning, Rolling Forecast, Bottoms-up Forecast, etc.)?
What different planning methodologies can be used to develop a forecast?
How low should I go? What level of planning makes sense to provide an effective management tool to help guide the business and make proactive business decisions?
What pain points am I likely to face as a planner but also as a business owner involved in the planning process?
Are there benefits to using a flexible Excel model versus a centralized planning solution

Presenter: Bryan Hogan

Are you an FP&A Business User that is looking to improve your Planning Process by implementing purpose built software? Get a glimpse inside the decision making process while preparing for a Hyperion Planning or PBCS implementation. Join Bryan Hogan as he addresses all your Planning questions.

What are the different Plan & Forecast types and what are the benefits of each?
What do all the different Planning Buzzwords / Terms really mean for my company (for example, Driver Based Planning, Rolling Forecast, Bottoms-up Forecast, etc.)?
What different planning methodologies can be used to develop a forecast?
How low should I go? What level of planning makes sense to provide an effective management tool to help guide the business and make proactive business decisions?
What pain points am I likely to face as a planner but also as a business owner involved in the planning process?
Are there benefits to using a flexible Excel model versus a centralized planning solution

Presenter: Bryan Hogan

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Planning Process Considerations

  1. 1. Planning Process Considerations Finit Webinar Series March 2016 Presented by Bryan Hogan
  2. 2. Finit EPM Services Page 2 Full Cycle Implementations Upgrades Dedicated Support
  3. 3. Why is Finit here? Page 3 Finit takes pride in being a company of makers and Doers; people who dig in and get their hands dirty We make and deliver personalized financial reporting solutions and experiences …Not Company to Company, but Person to Person By listening, questioning, and analyzing
  4. 4. The Finit Family Page 4 Fully aligned with our clients, not just bottom line $ No debt or external ownership Work with Finit employees, no subcontractors Compensation based on CLIENT SATISFACTION PRIVATELY OWNED CLIENT SATISFACTION NO SUBCONTRACTORS DEBT FREE
  5. 5. Finit Values Page 5 Our values on which we ask you to provide consultant feedback: • Approach & Collaboration • Integrity & Honesty • Client Betterment • Self Betterment • Colleague Betterment • Finit Betterment • Work Effectiveness • Impact & Innovation • Proactiveness & Passion Service Solutions Betterment
  6. 6. Finit Customer Success Page 6 Our values, culture, and approach to becoming a trusted advisor to our customers has led to 100% customer success for every Finit client (250+) and for every Oracle Hyperion project (500+)
  7. 7. Some Finit Customers
  8. 8. Questions
  9. 9. Upcoming Webinars Page 9 April 15th – What’s Possible in OS Part II Presented by Jay Hampton April 29th – Intro to HPCM Presented by Srinivas Salguti
  10. 10. About the Presenter Page 10 Bryan Hogan (bhogan@finit.com) Experience 9 years with Essbase 4 years with Planning 3 years with Enterprise 21 years with financial systems, reporting, and dashboards Certification/Education BBA- Finance & Banking, University of North Texas Client Testimonial Finit has a remarkable reputation and no matter who you meet from the company, you can understand where the comments come from. Each of them is knowledgeable in so many aspects and takes the time to make sure the client fully understands the topic. They exceed the bar of professionalism while maintaining an enjoyable atmosphere.
  11. 11. Agenda • Why Plan? • Process Components to Consider • Accounting vs. Finance • Type of Plans/Forecasts • Methodology Discussion • Consumers of the Planning Process • Common Pain Points of Planning • Excel vs. Systemic Planning Solution • Final Thoughts to Consider Page 11
  12. 12. Why Plan? Page 12
  13. 13. Process Components to Consider • Who should be involved in the process? • What type of plan/forecast should I use? • What is the source of the base data and input data? • What level of detail makes sense to forecast the business? • Who will be the main consumers of the results of the planning process? • How will the results be delivered? Page 13
  14. 14. Who Should Be Involved? • The following would typically be involved • Finance/Accounting as the core of the Planning team • Key business stakeholders for inputs • Senior Management for review and decision making • Additional involvement depends on a number of factors • Timing and complexity of the business model • The planning methodology being used • Turnaround time required for the planning cycle • Understanding of the business by the Planning team Page 14
  15. 15. Accounting vs. Finance FP&A/Budget Office • Every forecast cycle is different based on business trends and management thinking • Predict future performance to drive management action • Very few restrictions on models and analysis to be developed • Helps “create the news” Page 15 Accounting/Controller • Every month end and year end close cycles are similar regardless of results • Report historical information and comparisons • Bound by GAAP and accounting rules and principles • Typically “reports the news”
  16. 16. Types of Plans/Forecasts • Annual Process • Budget • Annual Operating Plan • Periodic Process • Forecast (BOY, Rolling) • What-If Forecasts/Risks & Opportunities • Ad-Hoc or As Needed • Strategic Plan • Long Ranged Plan Page 16
  17. 17. Timeline of Plan Types Page 17 CY+2 CY+3 CY+4 CY+5 J F M A M J J A S O N D J F M A M J J A S O N D J-D J-D J-D J-D Actual (May) BOY Forecast Rolling Forecast (12 mth) Budget LRP (5 year) Current Year Current Year +1
  18. 18. What is a Budget? • Tactical or operational in nature • One year fiscal calendar view • Can take many weeks or months to complete the process • Often involves a cross section of the company to produce • Very detailed, but not as detailed as actual results • Typically is tied to compensation (bonus) Page 18
  19. 19. What is a Forecast? • Tactical or operational in nature • Typically focus on current year • Should only take days to complete • Not as detailed as actual results or budget • Driven primarily by the finance team Page 19
  20. 20. Different Types of Forecasts • BOY Forecast • Focus on remaining months in the fiscal year • Short term perspective and is affected by the year-end “barrier” • Rolling Forecast • Focus on a fixed number of months into the future • Mid-term perspective and gives preliminary view into next year • What-If Forecasts • Focus on multiple scenarios of key drivers that impact future performance • Purpose is to model and anticipate potential risks and opportunities to the business Page 20
  21. 21. What is a Long Ranged Plan (LRP)? • Very strategic in nature • Has a long range focus of many years into the future • Initially takes weeks to develop but can be updated quickly • Builds off of existing budgets and forecasts • Very high level assumptions and very little detail • Driven by Finance or a specialized Strategic Planning department and Senior Management • Updated on an as-needed basis Page 21
  22. 22. Planning Methodologies • Bottoms-Up • Very detailed, need based planning by each business owner and/or department head • Business owners are more engaged and have a greater sense of ownership in their plan/forecast • If not managed effectively, wish lists can get out of control and will drive an unobtainable corporate plan • Try to avoid “Use it or lose it” mentality Page 22
  23. 23. Planning Methodologies (cont.) • Top-Down • Not as detailed as Bottoms-Up • Targets are assigned by management and pushed down to business owners with little or no input from the business owners • Business owners tend to disengage as they are forced to a number and may short cut the process to hit the number with unreasonable assumptions • Can be viewed as a “check the box” exercise Page 23
  24. 24. Planning Methodologies (cont.) • “Hybrid” • A mix of Top-Down and Bottoms-Up • Finance rolls up plans from business owners and/or department heads. • Senior Management reviews results and makes topside adjustments that are either allocated back down for business owners to adjust their plans or are held at a higher corporate level • Keeps business owners engaged and can help control the wish list while not discouraging them with a predetermined corporate target Page 24
  25. 25. Other Methodology Considerations • Driver based • Focus on key business drivers: e.g. Headcount, Production units, or New store openings/closings • Trend based • Focus on % increase or decrease over prior year/period • Risk & Opportunity Analysis • Identify potential impacts to the business and determine the financial effects and probability they will occur • Layer in impacts as appropriate to the plan/forecast Page 25
  26. 26. Consumers of the Planning Process • Internal consumers • C-Suite/Senior Management • Board Members • Department Heads • Equity ownership group • External Consumers • Banks (e.g. covenant reporting) • Lending Partners • Financial Markets and Analysts • Other Suppliers/Creditors Page 26
  27. 27. Common Pain Points of Planning • Consolidation of multiple, disbursed Excel files • Version control, reconciliation to previous versions • Incorrect, absent, or disengaged business owners • Missing or incomplete information as inputs • Misinformed, incomplete or poor assumptions • Time – never enough • Ever changing business climate – data is outdated the moment it is published • Planners become victims of their success (and failure!) Page 27
  28. 28. Excel Vs. Systemic Planning Solution Excel Solution • Very flexible • Many tasks can be automated with macros and VB scripts • Dissemination of historical data and submission of plan data is done manually via email • Difficult and time consuming to consolidate results • Version control can be problematic and quick turnaround times of versions can be challenging • Lack of visibility into methods used by business to derive values • Complexity of business model and organization impacts viability of using Excel Systemic Solution • Allows more structure to be enforced in the process • Centralized control of versions, reporting and analytics • Historical data can be centrally loaded and quickly made available to users • Timely consolidation of data resulting in quicker turnaround times • Can develop and automate sophisticated calculations and analysis • Requires that functionality be built and maintained Page 28
  29. 29. Final Thoughts to Consider • Are our forecasts accurate? • Are our forecasts being used to drive decision making and impacting our business results? • How much time do we spend planning? • What are the sources of the data and are they “clean?” • Are we missing any key people who would help improve the effectiveness of our forecasts? • Is there anything we would like to do differently in our planning process and what are the barriers to making those desired changes a reality? Page 29
  30. 30. Questions? Page 30
  31. 31. Thank You for Attending! Page 31 Today’s Presenter: Bryan Hogan bhogan@finit.com General Questions: Greg Barrett gbarrett@finit.com Joe Mizerk jmizerk@finit.com Copy of the slides or Recording: Email us for a copy of the slides or a link to the recording insights@finit.com Past webinars: www.finit.com/webinars Follow us on Twitter for updates: @Finit_Solutions

Hinweis der Redaktion

  • Thank you for Attending today’s Webinar on Driver Based Forecasting!

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