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Analytics

FP&A Done Right: Five Tips for Budgeting in the Age of COVID

November 13, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, written by Gary Cokins. Cokins explains why traditional budgeting is not a fit for the volatility, complexity and uncertain times businesses face today.

The pandemic is causing boards of directors and C-suite executives to take a new look at net cash flow. Traditional budgeting is simply too slow and too rigid to keep up with the rapidly changing business environment caused by COVID-19. There is too much volatility, complexity, and uncertainty right now.

Gone are the days when budgets could be one-and-done—tied to a fixed point in time and too inflexible to adjust to quickly changing business opportunities and challenges. In today’s world, a startup can be up and running and profitable in three months and disrupt its competitors. Consider Uber and Airbnb as examples. If your company takes nearly as long to create an annual budget, which is typically out-of-date a few months later, it will be extremely difficult to fight off the upstarts or keep up with your established competitors.

The solution? A flexible and continuous budgeting and forecasting process, often referred to as a rolling financial forecast, that helps you anticipate change and focus on outcomes rather than outputs and that is derived from the drivers to determine planned spending.

Here are five tips to modernize your budget process:

1. Just say no to one-and-done

Now more than ever, December’s fiscal year-end numbers often bear little resemblance to July’s realities—meaning budgets and forecasts must become more streamlined, accurate, and responsive. Annual budgeting won’t go away, but spending weeks and months processing data and reconciling spreadsheets that are out of date soon after the consolidated master budget is published doesn’t cut it anymore.

Modern budget solution:

  • Increase the frequency of budgets and forecasts to reflect shifting business conditions
  • Make decisions and plans based on data-backed insights rather than old and stale information
  • Change how resources, employees, and assets are allocated throughout the year and how the budget incorporates real-time opportunities and challenges

2. Focus on business drivers, not cost centers

Traditional budgeting focuses on allocating resources to cost centers, but business objectives (projects, products, and service lines) result from end-to-end cross-functional processes across the org chart. So if you determine the level of resources and spend based on forecast demand, then budgets and rolling forecasts can reflect performance that is company-wide rather than specific to a cost-center department.

Modern budget solution:

  • Enable organization-wide access to reports and data, allowing everyone to have visibility into the enterprise’s performance, including into individual departments
  • Review forecasts against budgets to eliminate confusion among competing departments
  • Provide real-time information for the needed insights to support better decision-making at all levels of the organization
  • Use drivers to determine the level of needed capacity (i.e., types and numbers of employees) to match your supply of capacity with demand

3. Create rolling financial forecasts

More than ever, fluctuating market conditions make accurate forecasts of future demand load (e.g., customer orders and sales) extremely challenging. Rolling financial forecasts help manage investments or financing determined by cash flow. They provide visibility into business performance using time horizons that reflect the speed of your business.

Modern budget solution:

  • Generate rolling financial forecasts that accommodate real-time shifts in market conditions
  • Enable self-service reporting so everyone in the organization can measure their performance against company-wide KPIs
  • Help everyone in the organization understand the downstream effects of their resource allocation decisions

4. Look forward, not back

Most budgets and forecasts are outdated before you push “publish” or soon after. And some factors are impossible to take into account (natural disasters, pandemics, broken supply chains, work stoppages). The rearview-mirror orientation of traditional budgeting (e.g., last year’s actuals create this year’s budgets) often results in increased “actuals” as managers exhibit “use-it-or-lose-it” behavior by spending needlessly to attain their prior fiscal year budget. Traditional budgets can’t keep up with the speed of modern business. One needs to look forward through the windshield.

Modern budget solution:

  • Respond faster to shifts in market conditions with real-time access to financials
  • Adjust outdated budgets and forecasts as change occurs
  • Move leadership discussions toward insight, planning, and action, rather than using the budget as a cost control mechanism to punish those with unfavorable cost variances

5. Use the right tools for the job

Creating a budget process that keeps up with the pace of today’s business requires a comprehensive, collaborative, and continuous planning platform—one that gives you robust, accessible reporting and modeling capabilities; dashboards with indicators and their targets that provide visibility into overall company performance; and automated tools that streamline budgeting and forecasting processes.

Modern budget solution:

  • Enable comprehensive planning that aligns the actions and priorities of everyone across the organization around common KPIs
  • Create opportunities for collaboration by giving everyone access to the data they need and deserve
  • Adjust and update budgets and forecasts on a continuous basis so you can navigate volatile market conditions in real time

Don’t let traditional budgeting lock you into outdated assumptions and fixed targets. Those outdated targets handcuff managers when the organization changes directions. Some managers view the fiscal year budget as a “contract” that they will not deviate from to minimize unfavorable variances from their allotted cost center budget expenses. This short-term focus jeopardizes the longer-term view. The modern FP&A professional knows the truth: Aligning budgets and rolling financial forecasts with comprehensive plans lays the groundwork for proactive rather than reactive planning—a significant strategic advantage in today’s highly competitive environment.

This blog post was originally published by Workday Adaptive Planning and appeared here.

Read more guest blog posts from Workday Adaptive Planning:

FP&A Done Right: Three Driver-Based Budgeting Tips for CFOs When Change is Imminent

FP&A Done Right: Three Words for a COVID-19 World – “Flexible Budget Variance”

FP&A Done Right: Planning for What’s Next in Uncertain Times

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Filed Under: FP&A Done Right Tagged With: Adaptive Insights, Analytics, Beyond Budgeting, Budgeting, Budgeting Planning & Forecasting, enterprise performance management, Financial Performance Management, Rolling Forecasts, Workday Adaptive Planning

Workday Adaptive Planning Tips & Tricks: CAPEX Planning – Your Tool for Growth

November 11, 2020 by Mary Luchs Leave a Comment

CAPEX (capital expenditures) planning is a key feature in Workday Adaptive Planning and gives the Office of Finance and senior executives greater visibility into the company’s financial risk, while also providing a tool for measuring corporate growth. Before we go into the specifics of CAPEX in Adaptive Planning, let’s take a step back and get an understanding of CAPEX.

Capital Expenditures: Overview

Capital expenditures are expenditures within a company that are not expensed on the income statement. They are considered to be investments into the company. Companies with higher capital expenditures are said to be investing more heavily into the future of their organizations.

CAPEX to Operating Cash Ratio

The CAPEX to operating cash ratio analyzes a company’s ability to acquire long term assets using cash flows. In other words, it indicates how much of a company’s cash flows is going towards capital expenditures. It is a great tool for measuring a company’s emphasis on growth. A higher CAPEX to operating cash ratio is an indicator of high growth in a company. A company whose ratio is too high could be taking on too much financial risk. While it is beneficial to invest in CAPEX, overspending in this area can compromise a company’s ability to pay off debts or cover other operating expenses. It is vital for the Office of Finance to have accurate, up to date visibility into CAPEX data in order to assess the company’s level of risk and make appropriate adjustments.

CAPEX and Depreciation

Depreciation is important to consider for asset management, especially for companies who are putting a lot of money towards their assets in the form of capital expenditures. A company must consider how their CAPEX depreciates when looking at their assets. This is a helpful tool to consider:

CAPEX > Depreciation → Growing assets

CAPEX < Depreciation → Shrinking assets

Accumulated depreciation of capital expenditures is indicated on the Balance Sheet, so it is important to consider how this impacts the net income of the company. Depreciation reduces the taxable income of a company, which is impactful especially for companies in a high growth phase who are investing heavily in capital. In addition to the CAPEX to operating cash ratio, depreciation can also be considered when analyzing a company’s growth.

Capex Planning in Workday Adaptive Planning

In addition to having a basic balance sheet and a P&L sheet, you should create a CAPEX sheet in Adaptive Planning. The CAPEX sheet offers a more specific look at capital expenditures than the balance sheet and the P&L sheet, allowing for more targeted analysis. Generating a CAPEX sheet also allows you to drill into expenses and depreciation for budgeting and forecasting purposes on a more granular level.

CAPEX Planning in Workday Adaptive Planning

In conjunction with the balance sheet, the CAPEX sheet is important for budgeting cash and analyzing capital investments. In Adaptive Planning, the CAPEX model consists of calculated accounts in a modeled sheet. These calculated accounts include capital values and their coinciding depreciation accounts. Each modeled account is performing the same calculation based on the asset class selected by the user. Asset class is a text selector column based on the categories of capital expenditures that are specific to your business. Companies vary greatly in the ways that they calculate capital value and depreciation, but all businesses can benefit from CAPEX planning.

How to do CAPEX planning in Workday Adaptive Planning

Adding a CAPEX sheet to your Adaptive Planning implementation gives you a powerful tool for understanding the investments in your company. When you can analyze this data at a granular level, you can better assess if your company has too much financial risk, or if you are invested at an appropriate level.

The team at Revelwood has been recognized by Workday Adaptive Planning for our thought leadership in the space, commitment to our Workday Adaptive Planning practice, and our rapid achievements of milestones. Visit Revelwood’s Knowledge Center for our Workday Adaptive Planning Tips & Tricks or sign up here to get our Workday Adaptive Planning Tips & Tricks delivered directly to your inbox. Not sure where to start with Workday Adaptive Planning? Our team here at Revelwood can help! Contact us info@revelwood.com for more information.

Read more Workday Adaptive Planning Tips & Tricks:

Workday Adaptive Planning Tips & Tricks: Override Formulas in Sheets

Workday Adaptive Planning Tips & Tricks: Templates

Workday Adaptive Planning Tips & Tricks: Alternate Time Tree

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Filed Under: Workday Adaptive Planning Tips & Tricks Tagged With: Adaptive Insights, adaptive insights tips & tricks, Analytics, Budgeting, Budgeting Planning & Forecasting, CAPEX, enterprise performance management, Financial Performance Management, Workday Adaptive Planning, Workday Adaptive Planning Tips & Tricks

IBM Planning Analytics Tips & Tricks: Minimizing the Subset Area

November 3, 2020 by Lee Lazarow Leave a Comment

Tips & Tricks

Are your member names long and hard to see in the subset editor in IBM Planning Analytics? Does it get confusing to see both the available members and the current set at the same time? Both situations can be solved by hiding one side of the subset editor.

Here is an example of the subset editor which shows both the available members and the current set.

IBM Planning Analytics Tips & Tricks: Minimizing the Subset Area

Each of the two sections has an option to minimize the area. This is done by clicking on the minus symbol at the top of the applicable section.

IBM Planning Analytics: Minimizing the Subset Area

Once clicked, the applicable area will compress and the other area will expand. Note that you can only minimize one side at a time. Below are examples of what each screen will look like when compressed.

Minimized Available Members:

IBM Planning Analytics Tips: Minimizing the Subsea Area

Minimized Current Set:

Minimizing the subset area in IBM Planning Analytics

This approach will allow you to further customize your subset editor screen to allow you to focus only on the area you want to see.

IBM Planning Analytics, which TM1 is the engine for, is full of new features and functionality. Not sure where to start? Our team here at Revelwood can help. Contact us for more information at info@revelwood.com. And stay tuned for more Planning Analytics Tips & Tricks weekly in our Knowledge Center and in upcoming newsletters!

Read more IBM Planning Analytics Tips & Tricks:

IBM Planning Analytics Tips & Tricks: Maintaining Subset-Drive Consolidations

IBM Planning Analytics Tips & Tricks: Sort Elements within a Subset

IBM Planning Analytics Tips & Tricks: Subset Control Dimension

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Filed Under: IBM Planning Analytics Tips & Tricks Tagged With: Analytics, Budgeting Planning & Forecasting, Financial Performance Management, IBM Cognos TM1, IBM Planning Analytics, lee lazarow, Planning & Forecasting, Planning & Reporting, Planning Analytics Tips & Tricks, Revelwood, TM1

FP&A Done Right: To Recover from Economic Shock, Are CFOs Envisioning Enough Scenarios?

October 16, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Adaptive Insights, written by Bob Hansen. Hansen explains the why scenario modeling is imperative when facing disruption.

Three out of four finance executives recently acknowledged that the planning processes their companies have in place do not equip them to respond quickly to major economic and geopolitical disruption.

Published in November of last year, the survey results could hardly have been more timely. Just a few weeks later, a virus would emerge in Wuhan, China, that would touch off a global pandemic, sending shocks through virtually every business.

Few could possibly have predicted how this event could have sent recently minted plans and forecasts for 2020 into trash bins everywhere. But even before the SARS-CoV-2 outbreak, CFOs and other execs were keenly aware that business conditions were unpredictable. They were equally aware of the hurdles keeping them from the adaptability and agility needed to outmaneuver and pivot around unforeseen obstacles. The same 75% of survey respondents who said their planning processes left them vulnerable also reported that outdated legacy planning systems, siloed planning processes with limited collaboration, and a lack of relevant workforce skills were keeping them from embracing the one thing their business needed to weather the storms of disruption: agility.

If ever there was a time to marshal all the tools and technology available to help organizations meet the needs of persistent, significant change, that time is now. And as businesses figure out how to recover from the initial shocks brought by the pandemic, gaining a clearer picture of what the future could hold may well be priceless.

CFOs have known this all along

A look back shows that finance executives have long recognized the importance of agility—and the need to plan for the unexpected. A 2016 global survey found that 67% of CFOs respondents said they were concerned about economic uncertainty in their region. Those worries turned out to be prescient. Soon would come tumultuous trade wars and other global impacts, culminating eventually in an unprecedented global pandemic impacting public health, transportation, critical supply chains, and more.

Indeed, forces like digital transformation, automation, and globalization have made agility a business imperative. Though change is a constant, it continues to accelerate.

Now, with so much uncertainty in front of us, agility is more important than ever.

Scenario planning: The reality check every business needs

Back in 2016, CFOs were asked how they could add the most strategic value when managing through an economic or business contraction. Nearly half (48%) said planning for multiple scenarios could help reduce risk by allowing their organizations to respond and course-correct when conditions change.

Since then, scenario planning has become an even more critical capability for finance and beyond. For businesses, it’s helpful to understand that scenario planning isn’t about modeling the likely effects of a specific disruption, such as a pandemic. Why? Because a disrupted supply chain could result from any number of causes: a natural disaster, a fuel crisis, a regional currency crash, political unrest, a pandemic—the list is virtually endless. So it’s important to instead build scenarios based on the likely impacts and model around those. Running what-if scenarios involving possibilities like cost cutting or changes in demand helps to prepare a series of contingency plans to address the financial, operational, and cash flow impacts that could result from specific disruptions.

And companies are doing this now more than ever before. For example, one higher education institution is running scenarios around the loss of room and board revenue, the possibility of fewer returning students, and the expenses associated with remote online learning. Another example is a healthcare organization that has used multidimensional, driver-based modeling capabilities to make course corrections while managing changes in patient volumes, increased government regulations, and a decline in insurance reimbursement.

Regardless of the industry or use case, multiple scenario planning empowers organizations to isolate their drivers, model according to how those drivers might be impacted, and sharpen their foresight to know what their future selves might need to do. It’s a reality check for a reality that hasn’t yet happened.

Scenario planning beyond the bottom line

How are these companies able to conjure up a crystal ball and peer into a mix of their possible futures? They do it through active planning.

Unlike its manual, siloed, episodic, static predecessor, active planning is comprehensive, continuous, and collaborative. Active planning processes are fueled by real-time data, powerful automation, and advanced technologies like machine learning to help planners throughout the business model what-if scenarios with virtually no limits—while iterating multiple scenarios rapidly to identify the most likely outcomes and most effective actions. The most advanced platforms even help you identify erroneous predictions, so you can have more confidence in the scenarios you model. Meanwhile, monitoring results helps you to identify trends and patterns that could further refine your scenario model.

By incorporating financial and nonfinancial inputs that might be impacted by economic disruptions into your active planning model, you can draw more parallels between drivers and better understand how one affects the other. Your responding game plan will also be more comprehensive, encompassing multiple departments for swifter execution and more precise pivots. This includes financial, workforce, and salesplanning.

Are you exploring enough what-ifs?

The right platform will allow CFOs and their teams to model any number of scenarios—and modeling enough of them could mean the difference between success and failure. Just be sure these scenarios are anchored around your key business drivers so that you avoid wandering off into low-value explorations that tie up valuable resources to game out extremely unlikely events.

But do assess a wide range of outcomes, including best case, worst case, and most likely. Generating a 360-degree view of potential outcomes helps you and your organizational leaders make better decisions. And developing strong internal communications to distribute and disseminate scenarios quickly and with the right people allows you to stay on top of changing conditions and quickly shift gears.

To jump-start the what-if scenario modeling process, ask questions that will help you fully explore the possibilities of a business interruption, price war, revenue slide, or any other scenario worth planning for:

  • What do financial hits like deferred revenue or default payments do to revenue forecasts? How will they affect demand planning for things like potential location closures or inventory imbalances?
  • How will you balance your short-term workforce needs against the long-term needs of the business?
  • Is there a shortage of a certain skill set that’s currently high in demand and lacking in your area? How can you source people with those skills?
  • What if you forgo hiring until the next quarter or even the quarter after that?
  • What happens if you need to reduce employee pay or staff levels?
  • How will you adjust your goals or quotes, and what does the ripple effect of that look like throughout the sales department?
  • What if your sales pipeline freezes or shrinks?
  • How can you adjust for potential reduction of sales resources, and how will that impact bookings, productivity, and costs?
  • How will seasonality affect already disrupted cash flow?

You’re not a fortuneteller, but you can be better prepared

You may not be able to predict the next pandemic, the next recession, or the latest technological advancement that sends shockwaves through your industry. But if you model enough of the most critical what-if scenarios, you can meet disruption with agility. And that may be the most valuable outcome of all.

This blog post was originally published by Adaptive Insights.

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Filed Under: FP&A Done Right Tagged With: active planning, Adaptive Insights, Analytics, Budgeting, Budgeting Planning & Forecasting, disruption, driver-based modeling, Financial Performance Management, scenario modeling, scenario planning, what-if scenarios, Workday Adaptive Planning

IBM Planning Analytics Scores 13 Top Rankings and 21 Leading Positions in BARC’s The Planning Survey 20

October 5, 2020 by Lisa Minneci Leave a Comment

News & Events

IBM Planning Analytics, which is built on the well-known and proven TM1 engine, received numerous high marks in this year’s annual Planning Survey from BARC. The survey provides a “detailed quantitative analysis of why customers buy planning tools, what they use them for, they everyday problems that users experience with the tools and how successful they are.”

The survey findings include:

  • 954% of surveyed users rate IBM Planning Analytics’ coverage of planning-specific requirements as excellent or good, compared to 89% for the average planning tool
  • 50% of surveyed users chose IBM Planning Analytics because of its flexibility, compared to 48% for the average planning tool
  • 43% of surveyed users chose IBM Planning Analytics because of its convincing performance, compared to 31% for the average planning tool.

“Besides planning, customers mainly use IBM Planning Analytics for ad hoc query and reporting (91 percent), standard/enterprise reporting (77 percent) and basic data analysis (72 percent). 51 percent of respondents plan to use it for advanced analysis in the future … 67 percent of Planning Analytics users are planning users – just above the survey average of 65 percent – reflecting the fact that Planning Analytics is essentially a planning tool with complementary BI and analytics functionality.” – BARC Comment

BARC Planning Survey 20

Download the highlights to learn details on IBM Planning Analytics’ rankings, read customer quotes, and more.

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Filed Under: News & Events Tagged With: analyst report, Analytics, BARC, BARC Planning Survey 20, Budgeting Planning & Forecasting, Financial Performance Management, IBM Cognos TM1, IBM Planning Analytics, Planning & Forecasting, Planning & Reporting, TM1

FP&A Done Right: Three Driver-based Budgeting Tips for CFOs when Change is Imminent

October 2, 2020 by Revelwood Leave a Comment

FP&A Done Right: Collaborate More When Planning

This is a guest blog post from our partner Workday Adaptive Planning, written by Gary Cokins. The blog discusses how uncertainty adds to the arduous and often painful process of budgeting.

Consider these tasks and the problems related to them: budgeting amid great uncertainty about the future (like today during COVID-19); inputting departmental budgets on multiple Excel worksheets; manually reconciling variances and correcting errors; and dealing with broken formulas, misinformation, and inaccuracies. The life of a finance team during budget season is arduous and often frustrating.

It is more frustrating when there is uncertainty about the levels of demand on the organization in the future months.

CFOs tasked with budget presentations often find themselves explaining numbers and assumptions that are far out of date by the time they stand before key stakeholders. Static budgeting simply cannot keep up with today’s lightning-fast economic environment, as so many are now experiencing.

Progressive CFOs using driver-based budgeting, on the other hand, can create a dynamic and agile finance-centered process that helps stakeholders gain insights and make informed decisions tied to strategic and operational goals. This enables CFOs to transition from tactical to strategic leaders. They can align forecasts and projections with external as well as internal drivers (e.g., the impact of unforeseen events; changes to the corporate tax rate or labor contracts). They can expand from “bean counters” to “bean growers.”

This is critical because driver-based budgets not only generate a pro forma income statement and balance sheet for each month into the future but also the cash flow statement derived from them. With this information, the treasury department can plan for investing surplus cash or financing deficit cash. Sadly, bankruptcies occur when organizations run out of money and have exhausted their financing options.

A strategic budget tool for a fast-moving world

Driver-based budgets accomplish more than static budgets, and they do it faster with more validity. In addition to allocating resources based on forecasted demand load to adjust capacity (e.g., number and type of employees, equipment purchases), driver-based budgets enable CFOs to help drive business priorities, respond more quickly to changes in the marketplace and external environment, and create a dynamic, data-driven process, rather than one frozen in countless racked-and-stacked Excel workbooks. Driver-based budgets enable active and continuous budget planning that becomes rolling financial forecasts, rather than annual and fixed planning that culminates in hundreds of unread pages.

Agility is a buzzword for a reason. CFOs hoping to build confidence and credibility in their numbers can no longer rely on static budget tools to get the job done. In a world with increased regulatory volatility, complexity, uncertainty, supply chain mobility, labor market changes, and technological evolution, a CFO must be agile, or generate irrelevant reports and budgets that no one reads or believes in.

Here are there tips to help CFOs get started with driver-based budgeting.

1. Eliminate data silos

Traditionally, CFOs assemble budgets using data from multiple sources throughout the organization. Departments enter their budgets into cost center spreadsheets with little or no idea how their performance ties to larger initiatives. The finance teams are stuck with consolidating the spreadsheets and left guessing how everything fits together. This siloed approach to budgeting keeps stakeholders in the dark about the impacts of revenue and expense projections downstream.

Regardless of company size or industry, CFOs can achieve greater collaboration and eliminate budget silos by identifying a single source of data, generating driver-based rolling forecasts, and creating a centralized and accessible planning resource. Upstream data integration helps operational units view budgets in a larger enterprise-wide context and makes it easier to line up support from key stakeholders.

Ultimately, eliminating silos creates a dynamic budget process that drives rather than reacts to business performance. The budget process is resource-capacity sensitive to projected changes in the sales volume and mix of products and standard service lines. It takes into account which expenses are sunk, fixed, step fixed, or variable. It embraces microeconomic behavior compared to consolidating cost center spreadsheets.

2. Identify KPIs that drive finance and tie to the operational plan

KPIs are measures of operating activities that encompass everything from customers to installations to deliveries to transactions. CFOs might track different KPIs (e.g., bookings versus revenues, sales by geographic location, on-time customer order delivery performance), but more KPIs isn’t always a good thing. All of the measured indicators cannot be a “K”—a key one!

In the case of one healthcare organization, disagreement about KPIs nearly derailed the budget process. Tasked with tracking patient-specific revenue, the budget committee initially identified quality of care metrics as a revenue KPI. The assumption that satisfied patients would return to the facility for care, thereby driving up revenue, ultimately proved less accurate than conducting a demographic analysis. Eventually, the budget committee concluded that indicators like patient age, location, income, race, health status, and utilization histories were more effective KPIs than stand-alone satisfaction metrics. This materially changed the budget and aligned it more closely to organizational goals.

Integrating KPIs into the budget process empowers CFOs to make course corrections, which is particularly relevant now, and to measure overall business performance. It enables CFOs to align the planned expenses with the strategy of the executive team while creating buy-in throughout the organization.

3. Differentiate forecasts from targets

CFOs using driver-based budgeting and rolling financial forecasts must differentiate between forecasts—where the organization is headed—and targets—where the organization hopes to go. Forecasts should be based on a run rate of previous performance with adjustments for increases or decreases of demand on the needed capacity, whereas targets tie to aspirational goals (market expansion, new product and service line launches, etc.).

By separating targets and forecasts, CFOs create a robust budget process that continually course-corrects and adapts to market factors and environmental impacts. They can understand the gap between projected spending and profit levels and the aspirational desires of the executive team. They can then try to identify actions that can narrow the gap.

Investors in a new production facility, for example, would need the finance team to present scenarios based on when the facility would be online, potential construction delays, and other unknown variables. A driver-based budget-oriented CFO would ask important questions like: Do we have a hiring plan in place? What happens if the product components increase from $40 apiece to $50 apiece? She would create best, worst, and likely scenarios against which results would be measured. Targets, on the other hand, relate to where the organization (whether board, leadership, or investors) hopes to go. In the case of a new facility, the revenue target might be 100% production-ready by the next quarter.

Plan and execute

Today’s CFOs are expected to navigate complexity and uncertainty through standardization, automation, and the streamlining of processes, systems, and data. Driver-based budgeting and rolling financial forecasts help report cash flow projections for the treasury department, support growth initiatives, drive profit margin expansion, align with executives’ strategy, and manage business performance through better analytics and reporting.

This blog post was originally published by Workday Adaptive Planning and appeared here.

Read more FP&A Done Right posts:

FP&A Done Right: Planning for What’s Next in Uncertain Times

FP&A Done Right: How CFOs Can Lead in Today’s Challenging Environment

FP&A Done Right:3 Steps to Help You Plan for What’s Coming

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Filed Under: FP&A Done Right Tagged With: Adaptive Insights, Analytics, Financial Performance Management, FP&A, FP&A done right

IBM Planning Analytics Tips & Tricks: Editing Chores While Active

September 29, 2020 by Lee Lazarow Leave a Comment

Did you know that IBM Planning Analytics Workspace (PAW) allows you to edit chores while they are active? Perspectives required you to de-activate a chore, make your modifications, and then re-activate it. However, the two “bookend” steps of this approach have been eliminated in the PAW environment.

To edit a chore, right click on the name of the chore and select the option to “Edit Chore.”

IBM Planning Analytics Tips & Tricks: Editing Chores

The chore will open to show you information about the chore.  You will then be able to edit the details associated with the schedule and the specific processes to run.

You have the option to disable the schedule at any time, but this is no longer a requirement.

Editing chores in IBM Planning Analytics Workspace

This approach allows you to quickly modify your chores without having to perform the mundane steps of de-activating it and then re-activating it. This also means that you no longer need to remember to turn the chore back on after making your changes!

IBM Planning Analytics, which TM1 is the engine for, is full of new features and functionality. Not sure where to start? Our team here at Revelwood can help. Contact us for more information at info@revelwood.com. And stay tuned for more Planning Analytics Tips & Tricks weekly in our Knowledge Center and in upcoming newsletters!

Read more IBM Planning Analytics Tips & Tricks:

IBM Planning Analytics Tips & Tricks: Home Button

IBM Planning Analytics Tips & Tricks: Edit Action Button

IBM Planning Analytics Tips & Tricks: Comparing Sandboxes

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Filed Under: IBM Planning Analytics Tips & Tricks Tagged With: Analytics, Budgeting Planning & Forecasting, Financial Performance Management, IBM Cognos TM1, IBM Planning Analytics, lee lazarow, Planning & Forecasting, Planning & Reporting, Planning Analytics Tips & Tricks, Revelwood, TM1

Office of Finance Benchmark Data

September 28, 2020 by Lisa Minneci Leave a Comment

News & Events

Do you know how your Office of Finance compares to others? A recent report from Ventana Research looks at change in the Office of Finance and provides benchmarks against which senior finance executives can compare their departments against their peers.

Ventana has researched the performance of the finance organization for 15 years. The report provides a comprehensive look at how the Office of Finance is transforming, the importance of Finance IT, key insights for the Office of Finance, and 10 best practice recommendations.

Benchmark data

Ventana shares plenty of interesting benchmark data in this report, including:

  • 76% of finance leaders surveyed cite analytics as critical for improving their performance
  • The share of companies that have a Finance IT group has increased to 59% from 45% in 2014
  • More than one in five said their process for creating finance analytics works very well
  • 32% said they use analytics to improve performance, compared to 14% in 2014
  • 46% of senior executives report full availability of finance analytics
  • 72% report reviewing their close process either monthly or quarterly
  • Companies that close their books within six days after the end of the quarter are more likely to provide executives with timely information
  • 66% report their budgets remain relevant through the period
  • 52% review their actual to budgets within six days; 19% do it within three business days
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Filed Under: News & Events Tagged With: Analytics, Budgeting Planning & Forecasting, Financial Performance Management, Office of Finance, Planning & Forecasting, Planning & Reporting, Ventana Research

IBM Planning Analytics Tips & Tricks: Creating Groups in PAW

September 22, 2020 by Lee Lazarow Leave a Comment

Did you know that you can create new groups and delete groups directly in IBM Planning Analytics Workspace (PAW)?  This is done within the dimension editor via the same screen that you use to edit dimensions and attributes.

Step 1: Select the dimension to be edited.  This is done by either right clicking on a dimension and selecting the option to “Edit Dimension” or by dragging the dimension onto a sheet.

Step 2: Switch to member security mode.  This is done by clicking the Member Security Mode icon:

IBM Planning Analytics Tips & Tricks: Creating Groups in PAW

Step 3: You can now modify groups by selecting the icon to either create or delete a group:

Creating groups in IBM Planning Analytics Workspace

If you choose the option to create a group then you will be prompted for the group name.

How to create groups in IBM Planning Analytics Workspace

Once created, you can then set security by right clicking on the applicable areas:

  • Right click on the group name to define security for all elements within the group
  • Right click on a specific element to define security only for that element

This approach will save you time by allowing you to perform all aspects of dimension maintenance within a single area.

IBM Planning Analytics, which TM1 is the engine for, is full of new features and functionality. Not sure where to start? Our team here at Revelwood can help. Contact us for more information at info@revelwood.com. And stay tuned for more Planning Analytics Tips & Tricks weekly in our Knowledge Center and in upcoming newsletters!

Read more IBM Planning Analytics Tips & Tricks:

IBM Planning Analytics Tips & Tricks: PAW Cell Comments

IBM Planning Analytics Tips & Tricks: New Features in PAW – Data Refresh

IBM Planning Analytics Tips & Tricks: PAW Pass Context

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Filed Under: IBM Planning Analytics Tips & Tricks Tagged With: Analytics, Budgeting Planning & Forecasting, Financial Performance Management, IBM Cognos TM1, IBM Planning Analytics, lee lazarow, Planning & Forecasting, Planning & Reporting, planning analytics tips & tricks video, Revelwood, TM1

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