Planning & Reporting

IBM Cognos TM1 for Capacity Planning in Manufacturing

June 28, 2017 by Revelwood Leave a Comment

We recently blogged about capacity planning in the oil & gas industry using IBM Cognos TM1. In short, by using TM1 for capacity planning, a business can better understand how to maximize the capacity it has on hand, how to plan for expected increases and decreases in supply and demand, and how to capitalize on market opportunities to increase physical capacity at the most optimal times.

One of our clients, one of the nation’s largest manufacturers of roofing materials, with nearly 30 plants and a large variety of products created from different materials, wanted to optimize and create efficiencies for the products it manufacturers. They specifically wanted a capacity planning model that incorporates each plant, the multiple lines each plant runs, the products per line and per hour, and the shifts in the plant, and the length of those shifts.

With TM1, the manufacturer can now reallocate back in time if the data reports that a plant’s capacity has been exceeded. It can also report if a plant is currently exceeding capacity, or if a plant is performing under capacity. The capacity planning model provides red flags when it sees plants underperforming, enabling management to make decisions around whether they need to add additional shifts to those lines, or to move manufacturing of a specific product to a different plant.

Read about capacity planning in the manufacturing industry.

Using IBM Cognos TM1 for Capacity Planning in the Oil & Gas Industry

June 20, 2017 by Revelwood Leave a Comment

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. Most people think of IBM Cognos TM1 and automatically think just of financial planning. They think of how organizations of all types and kinds use TM1 for budgeting, planning, reporting and various other office of finance activities. But as we have learned in our decades of experience in working with TM1, there are many other ways companies can use TM1.

Just one of these ways is capacity planning. In short, by using TM1 for capacity planning, a business can better understand how to maximize the capacity it has on hand, how to plan for expected increases and decreases in supply and demand, and how to capitalize on market opportunities to increase physical capacity at the most optimal times.

One of our clients who needed a capacity planning solution is in the oil & gas industry. We built a solution for them that uses TM1 for operational performance management data on their storage of oil and gas. The company has contracts with its customers to store petroleum products to be transported. By having greater visibility into its tank utilization, the company can both be more efficient, and be more proactive by driving more revenue when there is spare capacity available.

Read about capacity planning in the oil & gas industry.

Ovum: “Majority of CFOs aren’t happy with quality of financial planning and analysis”

May 10, 2017 by Brian Combs Leave a Comment

According to an Ovum report, a “majority of CFOs aren’t happy with the quality of financial planning and analysis and are looking for ways to make finance a more ‘inclusive’ and ‘insightful’ function.” And while the report discusses why traditional planning processes are broken and why certain trends gaining traction in analytics are set to disrupt these entrenched practices, it is not all doom and gloom about the office of finance and its practices.

In fact, in “Breaking the Barriers to Financial Planning with Exploratory Analytics,” Ovum declares that there’s an “ongoing evolution in data analytics infrastructure, processes, and techniques [that] has created a perfect storm that is disrupting the way the office of finance thinks about (and engages in) enterprise performance management.” The report also goes on to say that its analysts believe that “financial planning and analysis (FP&A) will be one of the first areas to be on the path to transformation with the emergence and adoption of cloud and exploratory analytics—that will not only help users explore new frontiers in performance management, but also make planning and analysis, ‘viral.’”

Here at Revelwood we think this report touches on a theme we’re seeing emerge quietly in several places. The theme that finance is starting to transform from just a mere accounting function, to one of equal business leadership, one that is the most advanced and well-versed in analytics, and one that is best positioned to be a disruptor in its organization. One that, if interested in rising to the challenge, can transform its organization.

The Role of Finance Reimagined: A Manifesto

April 12, 2017 by Brian Combs Leave a Comment

Our world is in the midst of a transformative technological revolution that is impacting every nation, industry, enterprise and human being on this planet. It is a revolution because it is radical and happening so fast. It is transformative because it is so pervasive and fundamentally changing the way we live.

We’re seeing changes in business and technology never before imagined. For example:

Ten years ago, the Internet of Things (IoT) consisted of approximately 500 million connected devices. Today that number is 9 billion. At the end of this decade that number is projected to be 50 billion. And, not long after that? One trillion.
Self-driving cars are no longer a dream. They’re real and very close to becoming the standard. Did you ever consider Google a car company? It is projected that the soon-to-arrive proliferation of self-driving cars will increase the capacity of our roads and highways by a factor of 10-15 times. Imagine the impact on safety, quality of life… even real estate prices.
Crowdfunding means that institutional investors are no longer needed to fund startups. In fact, you can now validate new products without even creating them yet.
The largest hotel company in the world—Airbnb—doesn’t own a single hotel room. It has disrupted the business model by reducing both the cost of demand and supply to next-to-nothing.
50% of all business ground transportation costs in the U.S. are paid to Uber. And, it doesn’t own a single vehicle.
Jeff Immelt, CEO of GE, said in a recent interview with McKinsey and Company, “We can’t be an industrial company anymore. We need to be more like Oracle. We need to be more like Microsoft.”

Given these changes—and those to come—what role must the Office of Finance play as organizations change? How can it best support corporate strategy and operational effectiveness? How can Finance be viewed as a strategic partner to the business in its quest to disrupt itself and transform organizational behavior?

We explore how the Office of Finance is changing in our Manifesto. We invite you to download it, consider how your organization is changing, and how the Office of Finance needs to transform to facilitate that change.

Consider what Charles Darwin told us, “It is not the strongest or the most intelligent who will survive but those who can best manage change.” Does your Office of Finance have a strategy for managing today’s—and tomorrow’s—changes?

My Mission to Transform FP&A

April 11, 2017 by Brian Combs Leave a Comment

After spending almost 13 years in various global, domestic and corporate FP&A roles at Hertz Rent-a-Car, I’m nearly one year into my position as a managing consultant at Revelwood. The turning of the year, if you will, into year two at Revelwood, gives me an opportunity to reflect on the state of FP&A in many organizations today.

When I first started at Hertz, I was a participant in the company’s Advanced Management Development Program. This was a six-to-nine month rotational “fast track” program that had me doing assignments with city managers, fleet operations, back office management, employee relations and customer service. The goal was that when I ultimately ended up working in the finance department, I’d have a “bigger” view of the organization than one that was just comprised of “numbers.” That experience helped shape my career, as it gave me a true appreciation of the importance of people and process. Throughout my FP&A career, I focused on the upstream and downstream impacts of my actions. It is difficult to add value without an understanding of the entire process. This is the essence of a FP&A professional.

At the beginning of my career, FP&A (then Business Planning) was all about numbers. It was largely reactive and, while many hours were (are) consumed working on it, the value it added, and still adds, could, and can, sometimes be questioned. After you gather the data, create/format/validate the fancy Excel charts, and complete multiple iterations, it is too late to enact change in any meaningful way. But that’s changing, and changing drastically, in many organizations.

What’s really exciting today is that FP&A is emerging as a proactive team that is an integral part of the business. As they gather data from all the siloed departments and units, they are being recognized as the single source of a potentially complete view of what’s going on in the organization, what the cause and effects of various actions are, and where strategic changes can be made for maximum impact. In fact, according to research from The Hackett Group, “more than 90 percent of finance organizations believe that digital transformation will fundamentally change the way finance services are delivered, including the way it serves internal and external customers, suppliers and partners, as well as the talent and leadership roles it must develop.”

That probably sounds very lofty and hard to achieve in many places – especially in established businesses with codified processes. But I believe it is achievable, and that it starts with examining, understanding, and changing (where needed) processes. Not simply for the sake of change itself, but because of the importance of continuous improvement and its impact on the business and the team.

I believe the FP&A group can and should be the most empowered group within an organization. When they have access to analyze the right data, they can uncover the root cause of not just finance issues, but operational issues and stumbling blocks. They are able to do this since they understand the synergies between various aspects of operations, and how process changes or process inertia create ripple effects or institutional bottlenecks. Armed with this knowledge, they can create and execute corrective action plans.

So you might ask, why would this passion lead me to a company known for its stellar reputation as an implementation and consulting firm for IBM analytics technology? After all, I’ve not said a single thing about technology.

Analytics technology is the enabler for the transformation of FP&A. Here at Revelwood, we’re working with our clients to help them make this transformation. And it’s certainly an exciting time for all of us. I look forward to speaking with you about your processes and how Revelwood can help.

Revenue Recognition’s Technical Aspects Make Adoption Difficult

March 14, 2017 by Stu Fisher Leave a Comment

This is a guest blog post by RGP Director of Client Service, Stuart Fisher.

It’s official. The adoption of ASC 606 – the new Revenue Recognition accounting standard, is not going to be fun. Forty percent of finance professionals surveyed by Intaact would rather stand in line at the DMV than go through the process of preparing and implementing the new standard. The technical aspects, which are enough to make anyone cringe, raise many questions. Among them:

How many performance obligations do you have?
What are the impacts of contract modifications?
Will you recognize revenue over time or at a specific point in time? Which recognition method is appropriate for your organization?
What is your stand-alone selling price?
Are you the principal or the agent?

Beyond these technical uncertainties, plenty of implementation challenges may affect a number of functions within your organization. For example … How many contracts need to be reviewed? Are current systems sufficient to accommodate the new requirements? How will reporting disclosures be affected? Is the data needed to comply available, and if so, is it available to the appropriate users? How will internal controls be revised or implemented to accommodate the need for new data and calculations? Who in your organization has the time and skillset to meet the aforementioned needs?

While there are a number of activities we would rather do, implementing the new revenue recognition standard is something many of us will need to do. In fact, the SEC has publicly stated that they are expecting more robust disclosures in upcoming filings. Through impact assessments, companies have learned how the standard will affect their organizations and will be sharing this information in their filings to update investors. To facilitate transparency and the timely absorption of the information by market participants, the SEC suggest incorporating an impact discussion into investor outreach activities.

If you have any questions about how your company should handle the new standard or how RGP can help you, please contact me at 973-401-2565 or stuart.fisher@rgp.com.

Stuart Fisher is the director of client service at RGP, a global consulting firm that provides advice and execution to clients of all shapes and sizes in more than 70 countries—including 87 of the Fortune 100. With a Big Four heritage, its 3,000+ accomplished professionals offer deep expertise across a broad range of integrated services. RGP provides its clients the agility to expand capacity and increase capability. And the support they rely on to help them achieve all that’s possible.

Introducing IBM Planning Analytics Local

December 15, 2016 by John Pra Sisto Leave a Comment

IBM Planning Analytics Local, the convergence of TM1 on-premise with Planning Analytics on the cloud is now available! This new release brings many of the great enhancements and performance improvements that IBM has been making in the cloud environment available to on-premise TM1 customers.

I recently hosted a webinar with Dan Bernatchez, our FPM practice leader and Chief Solutions Architect for TM1, to review the new features of the solution and provided a live demo of Planning Analytics Local.

One highlight of the webinar included Dan showcasing Planning Analytics Workspace, which is a completely transformed user experience. This new “face” of TM1 provides a rich, interactive workspace that is visual, intuitive, insightful, social and mobile.

Dan also explained how Planning Analytics Local uses hierarchies for deeper analysis of TM1 data. Essentially it turns attributes into virtual dimensions, saving RAM, increasing query performance and adding flexibility. This enables users to have smaller, faster cubes, to introduce hierarchies to queries as needed, and to do dimension versioning.

Since Planning Analytics Workspace is the one new component that comes at an additional cost, IBM is offering a special 75% discount for existing TM1 customers who purchase it before year-end 2016. For information on this pricing deal, contact me and I can help you.

This webinar was the first in a three-part series showcasing IBM Planning Analytics. Stay tuned for the dates and topics of the next two webinars coming in early 2017.

Revenue Recognition Is More Than a Finance & Accounting Issue

November 30, 2016 by Stu Fisher Leave a Comment

This is a guest blog post by RGP Director of Client Service, Stuart Fisher.

On May 28, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), also known as the Boards, issued converged final revenue recognition standards, which eliminate most industry-specific GAAP and significantly changed revenue recognition. Now that the one year delay proposed by the Boards is finalized, the standards will become effective in fiscal years beginning after December 15, 2017 (calendar year 2018) for public U.S. companies, which is essentially the same for companies reporting under IFRS. Private companies are allowed a one-year delay.

Implementing these changes will be complex and time consuming. In a recent survey RGP conducted, 82% of respondents said they anticipate implementation will be somewhat challenging to very challenging. Even companies not expecting drastic changes to the amount or timing of revenue recognition will likely be affected by necessary changes in documentation and information systems to track new data requirements and support the additional disclosures, estimates, and increased use of management judgment.

Our Revenue Recognition experts offer the following tips to companies affected by the new standards:

Assess the impact:
Organizations can avoid costly implementation issues and/or delays by assessing the cross-functional impacts that ASC 606 and IFRS 15 will have on their operations. Understanding what the enterprise-wide impacts are early on can help develop a clear roadmap with appropriate actions that are needed for a smooth implementation.
Select a transition method:
If you haven’t already done so, now is the time to choose a transition method and implement a plan to capture contract data. The full retrospective method is a popular choice because it is preferred by the investor community.
Evaluate significant revenue streams and key contracts:
Identifying required changes, and the specific business units where these changes may have the greatest impact, will be a necessary step.
Establish a Project Management Office (PMO):
Revenue recognition implementation doesn’t have to be a burden. It can be an opportunity to open communication among departments and business units, and to improve processes. Ensuring your revenue recognition project is efficiently managed and successfully executed leads to sustainable results.
Determine the impact on your systems and data:
From sales compensation to closing the books, your company depends on critical systems and accurate data. The system and data impacts may be greater than anticipated.
Establish a suitable contract management process:
Analyzing current requirements, and creating a contract management process that fits the needs of your organization, will help reduce risk and improve efficiency.

Implementing the new revenue recognition standard is a complex and time-consuming initiative. If you have any questions about how your company should handle the new standard or how RGP can help you, please contact me at 973-401-2565 or stuart.fisher@rgp.com.

Stuart Fisher is the director of client service at RGP, a multinational consulting firm that helps leaders execute internal initiatives. RGP was founded in 1996 within a Big Four accounting firm and today it is a publicly traded company with more than 3,300 professionals, annually serving over 1,800 clients from 70 global locations.

How will Brexit Impact your Financial Planning & Analysis

August 23, 2016 by Lisa Minneci Leave a Comment

It’s been several weeks since the historic and disruptive Brexit vote, where the UK voted yes to a referendum deciding to leave the European Union. Stock markets around the world immediately had a knee-jerk reaction, and there has been speculation that banks—particularly U.S. banks—will move their London operations to other locations. As the dust around Brexit is settling and the world is beginning to comprehend and work through what a UK exit from the EU looks like and how and when it will happen. We sat down with Don Cole and Lee Lazarow at Revelwood to understand how Brexit could impact your Fx conversions.

First, let’s look at how Fx currencies are handled in typical ERP systems. Since these are tools that are modeled to reflect a company’s operating structure, many companies handle their Fx conversions as simply conversion rate times base currency. This provides a one-dimensional view of the data and provides no insight into the true financial impact.

Revelwood takes a different approach when working with our clients on Fx conversions. We develop a variety of conversions to provide real insight into the operating results. This approach enables companies to correctly analyze whether a loss in a region was the result of currency fluctuations, or actually sales or service losses. These conversions include each of the respective currencies (e.g. USD, EUR and GBP) at the following rates:

Current Year Actual Rate
Current Year Budget Rate
Current Year Forecast Rate
Prior Year Actual Rate
Prior Year Budget Rate

With a system such as described above in place, companies can easily adjust their planning assumptions to reflect the fall of the pound sterling since the Brexit vote. This level of visibility can help companies to understand what changes they can and should make to their current assumptions and/or sales strategies to make up for the financial loss due to the dropping currency rates, or how to at least avoid a big surprise at the end of the fiscal year.

In the longer term, once Brexit happens, there is likely to be major changes to pricing in the UK, and possibly in other regions. One of the key aspects of Brexit is it will decouple the UK market from the EU market, meaning that the UK will need to renegotiate many trade agreements with other nations. And while the UK is still a large nation, in theory it will have less bargaining power than that of the EU. But, that is still many years out. In the meantime, now is the time to re-examine how your company handles Fx conversions and make some changes to better manage the financial fluctuations in the world market.