FP&A

Workday Adaptive Planning Tips & Tricks: Excel Reporting Using a Report Template

February 17, 2021 by Summer Jeter Leave a Comment

Many users of Workday Adaptive Planning utilize OfficeConnect for their Excel reporting. But not all users will have access to OfficeConnect, depending on your organization. But there is another great option for Excel reporting called a Report Template.

What is the difference between OfficeConnect and a Report Template?

Templates are Excel files which can be added to regular reports, including repeating reports. Instead of running an HTML report, you can have a custom Excel report. Below are some nice features, as once you use it, it will become a favorite for reporting.

Report Templates allow:

Custom formatting data from Adaptive such as background color, font color, and font type.
Calculations on the data, along with including graphs and notes.
Use with repeating reports.
A saved Excel file attached to a report.
Macros can be added to templates.

Here is a quick tutorial on how to create an Excel report using a report template.

Locate the Adaptive Planning HTML report which has the data you want for your Excel report.
a. Here is an HTML Report.
b. Locate the report in the Reports screen.
Right click on the report and choose Run as Excel, and the file will download.
Open the downloaded Excel file. You will see the Excel data on the first sheet.
a. The report is the same as the report in Step 1 but in Excel.
On this sheet, you can change fonts, and add conditional formatting, calculations, etc. If you want to add other sheets for more reporting, you can use formulas to reference data on the first sheet.
a. In this example, we have changed fonts style and added conditional formatting for the % Var column.
b. In this example, we added another sheet and created a graph and ratios using formulas to reference the first sheet (report data). You can add multiple sheets to create a customized report or a report book. You can also hide sheets. For example, the Report Info tab Adaptive includes in all excel reports or the first sheet with the data.
Return to the report in Adaptive Planning.
a. Right click on the same HTML report and select Attach Template.
b. Click Choose File button and select the excel file you just created which has your updated report with formatting, formulas, graphs, etc. Click OK. Once the file is selected click Open.
c. The file icon will change colors from blue to green, so you know the report has been properly attached.
Run the report and it will automatically download as an Excel file. Your existing report has been generated and has applied all applicable prompts. For example, the month of data will change per the prompt option selected.

You now have an Excel report! And can run it anytime!

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

FP&A Done Right: Rolling Forecasts for More Strategic FP&A

December 4, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, written by Bob Hansen. Hansen makes the case for dynamic planning, which is better suited for complexity.

When it comes to FP&A forecasting, most companies base their long-range forecasts on static planning processes, rather than more relevant, dynamic plans that reflect the complexities of the business.

Relying on a forecast that doesn’t enable continuous monitoring of company performance, instead of implementing a modern, rolling forecast approach, is like using an old-school road map to guide you on a cross-country trip: Why use a paper map when you can get to your destination worry-free with a car GPS system?

Rolling forecasts—forecasts that are updated typically on a quarterly or monthly basis—can be a game changer. Especially today, amid a global pandemic. They allow organizations to better align with their strategy, perform more-effective business analysis, and derive greater ongoing value from their budgeting and planning processes. Rolling forecasts make organizations nimbler, able to seize potential opportunities, or better prepared for upcoming roadblocks.

Rolling toward a more strategic focus for FP&A

There is an increasing expectation that strategic guidance—which can be generated through rolling forecasts—emanates from the FP&A team. A CFO Indicator report affirmed that need. The survey found that CFOs expect that time spent by the FP&A team on strategic tasks will double by 2020—growing from 11-25% today to 25-50%.

Furthermore, CFOs are looking for their teams to develop the technical and strategic capabilities that support executing approaches such as rolling forecasts. According to the CFO Indicator survey, if the FP&A team could improve only one skill, 29% of CFOs want that skill to be dashboard design and report building, 25% want it to be predictive analytics capabilities, and 19% want strategic modeling of what-if scenarios.

Fortunately, with the increasingly user-friendly experience of dashboard technology, the skills gap is narrowing, which allows more FP&A teams to start instituting rolling forecasts.

FP&A … so little time

So rolling forecasts are a no-brainer? In theory, yes. Yet the near-universal challenge lies in freeing up finance teams to move toward this new approach. There is a significant gap between what CFOs want their teams to be doing and how they actually spend their days. Often-cited research by APQC shows that only 40% of 130 finance executives from very large organizations rated their FP&A capabilities as effective.

Further, our research shows that 75% of CFOs want their teams to have a significant and strong impact on their organization, yet only 46% expect that their team will have that kind of impact this year. The chief reason continues to be a lack of time for strategic planning.

The clear benefits of rolling forecasts

Despite these time-crunch challenges, the benefits of getting to rolling forecasts are clear. The APQC survey showed that organizations that use rolling forecasts are better aligned with unfolding business strategy, are more effective at business analysis, derive greater value from their budgeting and planning processes, and have more reliable forecasts than those that do not use them. The survey revealed that 94% of businesses that use rolling forecasts described their business analysis as effective. Only 50% of those that do not use rolling forecasts described their analysis that way.

Finance leaders need to clearly promote the many benefits of rolling forecasts and how they can directly impact business results. For example, you can produce a cash flow forecast at the end of a rolling financial forecast process—resulting in a consolidated balance sheet and an accurate view of cash flow for the entire enterprise. Getting C-suite buy-in helps pave the way to get the resources and time needed to develop relevant and robust rolling forecasts.

Moving to rolling forecasts is possible at organizations that have executive support and invest in new, cloud-based finance software. These solutions offer easy-to-navigate dashboards and scores of time-saving hacks that can free finance pros from transactional busywork and allow them to focus on more strategic activities that improve business performance.

Like a state-of-the-art GPS, rolling forecasts can go a long way toward helping you get where you want to go—and position FP&A to be a driver of the business, not stuck in the back seat.

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

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

October 2, 2020 by Revelwood Leave a Comment

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.

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

September 18, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, written by Michael Magaro. The blog post was originally published on FEI Daily.

The COVID-19 pandemic changed our world, almost overnight, and businesses are having to adjust. The unprecedented nature of the pandemic means no one knows how deep the economic downturn will be, or how long it will last, which makes financial planning for businesses especially difficult.

Fitch Ratings’ “Global Economic Outlook” states that global economic activity will decline by 1.9% this year with the U.S., Eurozone and UK GDP down by 3.3%, 4.2% and 3.9%, respectively. Some industries will be more impacted than others, and next to no one has historical experience with pandemic conditions.

Companies are clearly having a hard time planning. A survey from Gartner of 99 CFOs and finance leaders taken April 14-19 revealed that 42% of CFOs have not incorporated a second wave outbreak of COVID-19 in the financial scenarios they are building for the remainder of 2020, a finding dubbed “surprising,” by Alexander Bant, practice vice president, research, for the Gartner Finance. Many public companies have also withdrawn guidance due to lack of visibility.

So how do companies plan when visibility is so cloudy, and unknowns are so numerous?

For the finance team at Workday, we are embracing scenario planning—basically harnessing the power of “what if”—to respond to COVID-19, and so are many of our customers. Our cloud planning platform is processing up to 30 times more forecasts and build-out scenarios for customers than in a typical, pre-pandemic week. And given the volatility and unpredictability we’ve seen, it’s not likely to ease up soon.

But the reality is that agility starts with planning. Not long before the pandemic hit, we, like many companies, had our plan in hand and were evaluating many different potential outcomes, including whether the long-running economic expansion would begin to show signs of slowing. As the realities of the pandemic came into view, we stepped up scenario planning in order to adapt to changing market conditions–and achieve the level of agility our business demands. And, while we continue to adjust and adapt like all companies, we identified five critical steps for successful scenario planning.

Step One: Assess potential impact to the top line

How will what’s happening impact revenue and the various revenue streams that feed the top line number? For many companies, this will include impacts to new business activity, customer retention, and assumptions that went into the impact of new product launches — if any exist.

Each business faces a different situation. During the pandemic, many hospitality businesses are struggling. Meanwhile, many online retailers are going strong. Each industry’s history can be instructive. During the 2002 Dotcom crash and the 2008 financial crisis, for instance, software companies with a higher percentage of SMB customers took a bigger hit to monthly renewal rates.

Because no one has historical data for a pandemic, it’s important to start off fairly basic with scenario planning. Model some elements from the top line, such as new sales, business renewal activity, and up-sell to existing customers by quarter throughout the year. Consider a range of scenarios possible for your business, perhaps 50%, 65% and 80% of a pre-pandemic plan. This gives a good view into what could happen to the income statement and balance sheet and help businesses understand variances on metrics that matter most to them. For organizations similar to Workday, that’s subscription revenue growth, non-GAAP operating margin, and, ultimately, cash flow.

Step Two: Identify levers on the investment side of the business

What levers do you have to pull? For most companies, people are the biggest cost. Do you hire as planned before the pandemic? What are the differences between hiring as planned, freezing hiring for the rest of the year, and the range of options in between? No business wants to cut job cuts at any time, so it’s important to understand other cost levers at your disposal, and the various outcomes possible when you pull them. To understand your big levers, you have to really understand your business.

Step Three: Align leadership

The finance team alone should not decide steps one and two. Involve all leaders so you get the right picture and analysis, and make sure you’ve identified the right levers. Involving leaders keeps everyone aligned and thinking about the right things. For many companies this may take the form of dashboards shared across the leadership team or creating regular review meetings.

Step Four: Identify a good outcome

Ask what a good outcome looks like for your organization. This will differ for each organization. Is it to retain existing customers? Is it to retain your workforce, or to maintain a customer satisfaction standard? Is it to expand and win market share from distracted competitors? By identifying what matters most to your organization, you’ll better prioritize through steps one, two, and three. And in today’s climate, that desired outcome may change, further elevating the importance of a continuous approach to planning.

Step Five: Dive deeper

Once you have your various scenarios, and have received feedback on them, dive deeper. For some companies, this will mean digging into supply chain issues, for others it may be assessing risk by segment, etc. Third-party research can help you decide how to respond. For instance, if you know a number of your suppliers or customers are feeling a lot of pain, how can you be proactive in supporting them? Align various teams on this topic, too. For instance, sales and customer service hear directly from customers. Their knowledge should inform your analysis and drive your ability to help your customers, partners, and your own top line.

Scenario planning to continuous planning

Even prior to the pandemic, Workday’s finance organization was working toward a continuous planning framework. Our aim is to shift from annual planning and budgeting to continuous planning via more frequent reviews and assessment of how changing conditions impact our product roadmaps, and vice-a-versa. Along the way, we look at such things as margins and cash flow. Whenever conditions change, we anticipate being able to take action and adjust our model. For instance, if product development runs behind schedule, do we adjust by upping investment to get it back up to speed or do we adjust our top line estimates? If we’re operating correctly under the continuous planning framework, planning is not a point in time—it is continuous.

Embracing flexibility

The pandemic is challenging us as humans, as companies, and as business partners in all kinds of new ways. When any crisis hits, finance teams need to be able to seamlessly navigate the kinks that come with uncertainty. Scenario planning—and eventually continuous planning—enables us to embrace flexibility and to use it our advantage.

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

The Impact of COVID-19 on Lease Planning and Management

August 10, 2020 by Lisa Minneci Leave a Comment

The COVID-19 pandemic has impacted almost every industry – and will continue to do so into the foreseeable future. Corporate real estate and the real estate investment trust (REIT) industry are examples that have gone from fairly predictable scenarios to areas that have been completely upended.

As a result of the coronavirus, many global employers are debating the need to have their employees work in large offices at all. Barclays’ CEO told CNBC that “crowded corporate offices with thousands of employees may be a thing of the past.” Along with Barclays, Mondelēz, Nationwide, and Twitter are talking about a “permanent shift to work from home and reduced office space.” The reasons range from safety to insurance to cost savings. In fact, a Reuters analysis of “quarterly earnings calls over the past week (week of July 15, 2020) revealed that more than 25 large companies plan to reduce their office space in the year ahead, a move designed to reduce the second-largest expense after payrolls.”

A typical REIT company normally holds millions or billions of dollars in assets in office space. They should have a good understanding of which leases are coming up for renewal or expiration, and which buildings will have extra capacity. They look long-term to fill space and maximize revenue opportunities.

Suddenly, as a result of COVID-19, REITs are faced with tenants who are viewing their office space commitments very differently. Many businesses, like retailers and restaurants, have been closed for months. Some are still closed. Some are re-opening slowly. Some face the prospect of future shut-downs. Businesses have asked landlords for rent concessions, and some U.S. cities and states have issued guidelines supporting rent concessions. Regardless of the reason, tenants are now asking for lease modification options. These include partial terminations and reductions in space.

It is possible to “model” real estate assets and leases on spreadsheets, but it is simply not possible to manage this level of complexity, and do so in near real time, with a spreadsheet. In order to truly understand the total impact of rent concessions and lease modifications across multiple buildings, in different states, throughout the nation, a real estate holding company or a REIT requires sophisticated planning software. These firms must be able to do “what-if” scenario modeling. They need to have a clear picture of capacity, in order to move tenants or divest of assets, if needed. They require a solution that is agile, flexible and dynamic.

It’s hard to predict what will happen over the next few months or even the next year, but it’s clear that the real estate industry will see lots of change, fluctuation in leases, and unpredictability.

FP&A Done Right: What Must FP&A Do Differently to Make Planning a Success

June 5, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Adaptive Insights, written by Anders Liu-Lindberg. Lui-Lindberg explains why FP&A can no longer take a narrow view of its own role.

FP&A is obviously concerned with financials; however FP&A can no longer take a narrow view of its own role. FP&A must go way beyond the financials to where the business happens to succeed in making planning a success!

We discussed in my previous post the notion of active planning and made it concrete using a specific example. Now we’ll take it one step further and discuss how you can only realize active planning if you integrate your planning process with business operations.

In the end we’ll tie it all together by explaining how you can now build a driver-based planning process that ties your strategic intent together with your daily execution. I know that’s a stretch to most FP&A professionals, but with active planning it doesn’t make sense any other way than to make your planning driver-based.

External factor to business drivers to financial drivers

I think we can all agree that business doesn’t start with financials. In fact, it ends with financials, when every transaction eventually gets recorded through debit/credit. So how could we ever start our planning process with the financials or think that by extrapolating current financials with a growth factor or similar that we would get a decent picture of what will happen in the future? No, we must flip our thoughts on planning around. Here’s how:

We must look at the external factors that impact our business and are documented as critical assumptions as part of our strategy
Next, we must look at the key business drivers that determine if we’re successful or not
Only then do we start to look at the financials, because they’re the most lagging indicator we have

In short, external factors are leading indicators to business drivers, which in turn are leading indicators to financial drivers. Now it’s important that you only select the most critical ones, say six to eight in each category, because otherwise you’ll have a hard time describing how each factor/driver impacts the other. You’ll also have a hard time producing any meaningful monitoring system or planning process.

It’s clear that the more variables you can add to the equation the more precise you’ll likely be; however, to exercise active planning, an 80/20 approach is much better than thinking you need 99% accuracy in everything you do.

Almost real-time driver-based planning

Now let’s connect the dots. You’ve defined six to eight drivers at each level of external, business, and financial. You should now connect these drivers so you have an idea about how a change in one will change the other. You might need to use some machine learning to build a proper model, but once it’s built, you just need to link the financial drivers to your P&L, balance sheet, and cash flow (depending on how much detail you want to plan for).

Now this is real active driver-based planning that essentially gives you an updated view on your business whenever something happens in your critical assumptions that are tied to your strategy. I can imagine an alarm bell going off in every CXO’s office every time any of the drivers moves outside the comfort zone. Luckily for the CFO though, sharing the financial impact of not acting is no longer a headache.

How does this compare to your own vision for creating an active planning process? Have you already started some sort of driver-based planning? How connected is it among the three levels? Now is the time to get this done so we can start to focus on making the right decisions given the change in assumptions. Are you on board with the needed change?

Anders Liu-Lindberg is a senior finance business partner at Maersk and the co-founder of the Business Partnering Institute. He is also the co-author of the book Create Value as a Finance Business Partner and a longtime finance blogger with more than 33,000 followers.

This blog post was originally published by Adaptive Insights.

FP&A Done Right: 3 Words for a COVID-19 World – “Flexible Budget Variance”

May 22, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Adaptive Insights, written by Bob Hansen. It is part of a series of blogs from Adaptive Insights designed to help customers weather the storm brought by the COVID-19 pandemic.

With the COVID-19 pandemic shredding budget forecasts and presenting FP&A professionals with actuals that are nowhere close to original expectations, now is the perfect time to get acquainted with a certain term: “Flexible budget variance.”

Sure, flexible budget variance might sound wonky. But now more than ever, it’s an essential tool for modern FP&A teams. Here’s why.

Flexible budgeting not only helps you stay current with the challenges and opportunities that surface throughout the year, but it can be a lifeline when your business is rocked by revenue shocks, drops in demand, workforce shifts, and whatever else a global event can toss your way. By updating budgets to reflect those changes, you can quickly course correct to improve efficiency or enhance performance.

What is a flexible budget variance?

Flexible budget variances are the differences between line items on actual financial statements and those that are on flexible budgets. Since the actual activity level is not available before the accounting period closes, flexible budgets can only be prepared at the end of the period. At that point, flexible budget variances can be useful in identifying any shortcomings or deviations in actual performance during a given period.

Though powerful anytime, you can imagine how useful this capability would be now, with so much disruption to normal course of business activity. And it’s a safe bet that business planning and budgeting overall will be subject to rapid and ongoing course correction for months to come.

Flexible budget variance is also beneficial during the planning stage at the beginning of the accounting period. By adjusting project budgets to a series of possible activity levels, Finance creates data that helps anticipate the impact of changes in activity levels on revenues and costs. This helps you make more informed decisions if (or when) adjustments are needed.

Taking a flexible approach to budgeting typically doesn’t mean you get a free pass when it comes to more traditional, static budgeting. In fact, the static budget is essential for establishing a baseline to measure performance and results and ultimately for calculating the variances that do occur throughout the year.

Save time by using the tools you have

The task of calculating, analyzing, and then clearly communicating budget variances and their implications can be a time-consuming task under any circumstances, and particularly stressful in times of disruption. But certain capabilities in Workday Adaptive Planning make it easier.

For instance, Workday Adaptive Planning’s data visualization software can speed much of that process. And when conditions change quickly, speed is a distinct advantage.

Even so, it’s important to keep in mind that not all line items in a budget can be flexible. For example, your company has many expenses that are likely fixed for the entire year, such as rent or contractual obligations.

Yet other expenses have considerable chance of varying to one degree or another. For instance, staffing projections may be dependent on an expected long-term contract being finalized, or economic stresses cause you to extend payment deadlines or loosen return policies. No matter what, flexibility serves you at the moment you need it—and pays dividends down the line.

Gain meaningful insights

Meanwhile, flexible budget variance analysis offers the ability to derive meaningful insights throughout the year, allowing for improved planning and budgeting for the future. The power and potential of flexible budgets are further fueled by technology platforms such as those offered by Workday that provide drill-down capabilities so you can quickly identify and analyze variances.

You can also use Workday Adaptive Planning to create a variance report that highlights the changes in dashboards, offering a range of visual options for presenting the numbers within highly accessible context.

And by relying on more timely and relevant budget numbers, you can use flexible budgets to provide senior executives and line of business managers with dynamic guidance on spending, investments, or where cost controls might be necessary based on the situation your business faces as days, weeks, and months progress.

You’ll get through this chaos by leveraging the benefits of flexible budget variance capabilities within Workday Adaptive Planning, you even might get through it in a stronger position than your competitors.

This blog post was originally published by Adaptive Insights.

FP&A Done Right: The Office of Finance in the COVID-19 Economy

May 8, 2020 by Lisa Minneci Leave a Comment

Three months ago, we could not have imagined life as it is today. We’re experiencing an economic slowdown that none of us have seen before. Not a single industry is immune from the impact of the U.S. and other countries sheltering-in. Many businesses and industries are down, decimated and are temporarily or permanently closed. Others, like those in the streaming and video conferencing industries, online grocery shopping and third-party restaurant delivery services are booming.

This volatility puts tremendous pressure – both in the form of threats and opportunities – on the CFO and the Office of Finance. There are many questions facing the CFO. Let’s take a look at what some recent reports indicate, and how CFOs and the Office of Finance can arm themselves to be better positioned to respond to both the threats and the opportunities presented by today’s market.

CFOs’ Concerns

CFOs are concerned with the potential length of this downturn. CFO surveyed financial executives and found that they are taking immediate financial action to “survive revenue and profit impacts.” More than half of these executives are estimating a drop in sales between 1 – 20% in the first quarter of 2020. But on a positive note, 46% said they expected a “V-shaped recovery.”

The Office of Finance in the COVID-19 Economy

McKinsey & Company recently wrote about The CFO’s Role in Helping Companies Navigate the Coronavirus Crisis. In it, they state,

“The CFO can play a strong, central role, alongside executive peers, in stabilizing the business and positioning it to thrive when conditions improve … The CFO is the leader, after all, who most directly contributes to a company’s financial health and organizational resilience day to day.”

CFO reports their second concern was cash flow. This is critical, but not unmanageable. This is where the Office of Finance plays a central role in helping the organization survive. Your 2020 budget, plan, and forecast are all irrelevant now. You need to adjust your forecast to give an accurate financial outlook to senior management and investors. Your forecast must reflect new operational metrics for changes in production facilities, staffing and purchasing. It is imperative to change your forecast to show long-term plans for banks and other lenders.

To do that you need to understand what your business model looks like now. Not what it did when you put together your original FY2020 forecast. But what it looks like today, with schools, malls and restaurants closed, production lines stopped or transformed into making PPE, shipments delayed, and vital parts of our supply chains overwhelmed.

Do you have an accurate understanding of your model? The time to act is now. The business environment is uncertain now, and it’s impossible to predict what the next few quarters will look like – regardless of your industry, size, or location.

FP&A Done Right: Spreadsheets are Outdated

April 17, 2020 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, written by Adaptive Insights’ Founder Rob Hull. It was originally published on FEI Daily.

The global marketplace is moving faster, requiring companies to be more agile than ever in this age of urgency. Yet businesses—and specifically finance teams—still rely on tools that sustained them decades ago. Those tools were designed for an age when planning was an annual, top-down and linear process, but today we no longer have the luxury of devoting an average of 77 days to develop an annual plan. Change is continuous, so planning must be too. And it must also be more collaborative.

The rapid change in our technological ecosystem is causing a growing number of finance chiefs to tell their staff to find tools better suited to modern business planning and analysis than spreadsheets — for decades the default planning application for virtually every business. The inconveniences of spreadsheets for planning and analysis, such as version control errors stemming from manual data entry, clumsy email collaboration, and the challenges of creating a single source of truth from disparate data sources can now be a distant memory thanks to modern planning tools. As Bernard Marr observed in Forbes, spreadsheets may still be a great choice for some tasks, but not for the kind of agile planning and analytics required in today’s fast paced business environment.

From the cloud, a different way to plan

These and other observers have pointed to the rise of cloud-based planning software that has taken the fundamental capabilities of the noble spreadsheet and turned them into something that spreadsheets never quite managed to be – automated, intuitive, collaborative, integrated, multi-dimensional, and always up to date. Just as cloud-based CRM applications like Salesforce.com replaced legacy applications like Siebel, so too are cloud planning solutions replacing spreadsheets and legacy applications to provide much needed agility in today’s era of urgency.

Spreadsheets are a wonderful personal productivity tool, and as such will continue to have a place among business applications. But for company-wide finance, sales, and workforce planning, reporting and analysis, the future will look different than the past.

The future of planning is unfolding

With the advancement in technology, we’re starting to see menial tasks accomplished through automation, making time for teams to spend on high value tasks. Finance execs report that, on average, 83 percent of their staff’s time is spent on manual, menial tasks like data input and consolidation. That’s lost time that could be converted to more valuable and strategic tasks with better tools for planning, reporting and analysis.

Pinsent Masons LLP, a UK-based law firm with offices throughout Europe, the Middle East, Africa, Asia, and Australia, found that swapping out spreadsheets for cloud-based planning, reporting and analysis helped automate previously manual tasks, freeing finance staff to be more strategic. “We spent 70 percent of our time entering and verifying data, and 30 percent viewing and interpreting it,” notes Andrew Brett, who heads financial reporting at Pinsent Masons. “We now can spend seven out of every 10 hours gleaning insight from our data.”

Meanwhile, anytime, anywhere access and intuitive application design make planning far more collaborative. Spreadsheets are great for individual users, but in small groups, they’re less great and in large groups, they’re abysmal. On the other hand, cloud solutions were built for collaboration. They allow any authorized participant to work on a plan, from anywhere, at any time. Better still, you’ll always know who made changes and when. Leading cloud vendors have introduced intuitive planning interfaces that make it easy for non-finance personnel to collaborate, enter data, create reports, and run what-if scenarios because they recognize that in business, everybody plans.

Organizations that make the digital transformation leap for planning will see gains in scale and speed. The spreadsheet wasn’t built for enterprise scale, but the cloud was – modern cloud-based planning solutions can support thousands of concurrent users and highly complex multi-dimensional models. Modern solutions are also built to address the performance demands of enterprises. The most advanced cloud planning software solutions use powerful modeling engines that add memory and compute resources when needed and remove the data limits finance pros have come to despise.

Teams can also access data from every corner of the business. Manually importing enterprise data into spreadsheets can be complicated and troublesome — and that’s being polite. In contrast, the best cloud platforms automatically integrate data from your ERP, HCM, CRM and other transactional data sources so that you can refresh data with a single click and know you are working with the latest information.

Mind the gap

There’s a dangerous gap that can emerge when companies rely on outdated processes while their competitors embrace new, more agile ways of working. Agile teams produce market-leading results. The gap yawns even wider for companies still relying on tools developed for the way businesses operated before the internet changed…well, everything.

Holistic company-wide planning isn’t the pipe dream it once was – it’s now a business imperative and it’s the key to unlocking the kind of agility that turns planning into a competitive advantage. Realizing this, more and more execs are coming to the same conclusion: On the journey to the future, spreadsheets for business planning have become as archaic as the Rolodex.

Rob Hull is the founder of Adaptive Insights, a Workday company. Rob had a vision to provide modern finance leaders with an easy-to-use SaaS-based solution to manage business performance. Today that vision is a reality for thousands of businesses around the world.

This post also appeared on the Workday Adaptive Planning blog.

Read additional FP&A Done Right blog posts from our partner Adaptive Insights:

FP&A Done Right: Can you Recover from Static Planning?

FP&A Done Right: How to Improve your Financial Reporting Process

FP&A Done Right: 3 Barriers to Business Agility