1.
Planning Process
Considerations
Finit Webinar Series
March 2016
Presented by Bryan Hogan

2.
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Upcoming Webinars
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April 15th – What’s Possible in OS Part II
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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
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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.
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
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12.
Why Plan?
Page 12

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?
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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
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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”
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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.
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
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17.
Timeline of Plan Types
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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.
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)
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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
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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
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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
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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
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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
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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
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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
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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
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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!)
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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
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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?
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30.
Questions?
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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
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Recording:
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