xP&A

Leveraging IBM Planning Analytics for xP&A

May 12, 2023 by Revelwood

This is a guest post from our partner IBM. In this post, Michael McGeein, program director and product management leader – IBM Planning Analytics, showcases how organizations use IBM Planning Analytics for Extended Planning and Analysis (xP&A).

Extended Planning and Analysis (xP&A), is not a new concept for IBM clients who use IBM Planning Analytics with Watson, formerly known as Cognos TM1. For the past several years, clients have embraced the need to tie operational decisions to the financial impact from both planning and analysis perspectives. For instance, a Director of Operations may want to increase production for the upcoming selling season, but they must first understand the impact on the business overall.

There are many operational considerations, from labor, staffing and production capacity — such as machinery and warehousing — to ensuring the business has the capital needed. All these factors need to be considered, and fortunately, IBM Planning Analytics with Watson has helped clients do this for years.

Financial and supply planning for a national blood service organization

A national blood service, and long-time Planning Analytics client, has started implementing a financial planning solution to better plan, forecast and analyze the cash flow needs and improve reporting to the leadership team and Board of Directors. Once the team fully understood the capabilities of Planning Analytics, they saw an opportunity to improve salary planning, a key part of the financial planning process.

From that, the HR team expanded the salary plan to include the components of staff planning, including hiring and attrition.

Another way the team used Planning Analytics was to plan for the supplies needed for the collection of blood from donors. They created a planning application that schedules nurses and technicians who collect specimens and accounts for the supplies needed, from orange juice, bottled water, and cookies to medical supplies like tourniquets, blood bags, type testing kits and more.

As this company can attest, extending beyond the core finance function to plan for people, activities, and other areas has been part of Planning Analytics for years.

Financial and HR planning for a television production company

Another great example of Planning Analytics in action is with a television production company that, like many clients, was initially focused on financial planning. After the team had their financial planning and forecasting running well, they turned their focus on how to better run their business. As a ‘job shop,’ where each TV program is a job, one area of focus was cost planning by job. The team created a job planning application, starting with staff planning as one of the largest cost components. Then they extended to include overhead and expense allocations, and eventually created a weekly Show Cost planning module to understand the contribution of each show to the overall production company’s results.

Supply chain planning for a global contract specialty manufacturer

A global contract specialty manufacturer, with deep expertise in manufacturing know-how, supply chain insights, and product design, uses Planning Analytics for nearly every ‘non supply chain’ use case in their organization. From financial analysis and reporting, forecasting, reserves reporting, aged accounts receivables, and treasury cash balance and forecasting to working capital, HQ allocations, local tax adjustments, and income tax in interim periods, all of these Planning Analytics solutions are integrated to ensure changes in one area, like cash forecasting, can be reflected in the overall working capital analysis.

No matter the industry, Planning Analytics is a continuous, integrated business planning solution that helps run some of the best companies in the world. Those who use IBM Planning Analytics with Watson understand the benefits of integrated planning that are not realized when doing ‘connected’ planning in spreadsheets or other traditional tools.

Are you interested in expanding your use of IBM Planning Analytics? Let us know – we can help!

This blog post was originally published on the IBM Journey to AI blog.

FP&A Done Right: 3 Ways to Improve Collaboration with Colleagues Outside of Finance

July 23, 2021 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, explaining how to improve collaboration between the Office of Finance and business managers.

Many companies suffer from poor communication and collaboration between financial and nonfinancial managers. Operating managers don’t have sufficient input or buy-in to the financial planning process, and they aren’t educated about how their decisions can influence overall profitability. For its part, finance isn’t able to offer real performance insights that might truly help managers improve their results.

Instead of working closely together to plan and forecast, finance and business resort to negotiations that can involve high levels of conflict. Why is this, and how can it be changed to strengthen collaboration between finance and the business—and therefore transform FP&A?

Drowning in metrics, measurements, and spreadsheets

First of all, companies sometimes flood managers with measurements and metrics, too few of which effectively help managers understand and improve their performance. Too much measuring can add cost and complexity to an organization.

Secondly, spreadsheets continue to dominate planning processes in most companies. While spreadsheets work well for individual productivity, they cause problems when it comes to sharing and aggregating. Finance gets bogged down in low-value-added work—such as formatting and troubleshooting spreadsheets—and can’t provide useful service to business managers.

Meanwhile, business managers waste time managing to budgets instead of managing their business. They often don’t get the information they need, when they need it, from finance. Instead, they’re deluged with data, metrics, and reports, much of which provides little value.

Furthermore, many planning systems are designed and implemented by finance and are seen as irrelevant by business managers. The result is lack of buy-in and enthusiasm.

Clearing the decks for useful analysis and true collaboration

Finance can make room for higher-value work for both themselves and managers by leading the way to less detail and complexity, simplifying internal systems, and reducing the amount of time managers spend producing counterproductive reports and analyzing too many measurements.

In so doing, finance can provide effective decision support and performance insight that can truly help managers improve their results, making finance a real partner rather than an adversary. Here are three best practices that will help you make these changes.

1. Continuous planning

First, replace detailed annual planning cycles, which take too long and result in a budget that is already out of date as soon as it is complete. A more effective planning system is a continuous process, focused on rolling views that look 12 to 18 months ahead. These continuous plans should enable managers to respond more rapidly to emerging events and trends and to changing business environments.

Replacing the annual budget with a rolling forecast can save huge amounts of work, freeing all managers to spend more time on value-added work. It will also improve the relationship between finance and business managers, as finance will have more time to provide better service.

2. Move from monthly variance reporting to KPIs and dashboards

Most companies manage through annual budgets and use monthly variance reporting as the primary feedback mechanism for managers. But monthly variance reporting is too slow and fails to reveal underlying causes of problems.

What is more effective is fast feedback of financial results, summarized and shown as trends and moving averages. KPIs should act as a management dashboard. They should provide managers with early warning signs when problems are brewing and action needs to be taken.

Defining measurements is just the first step. “The next step, and perhaps the hardest part, is to set in motion a cadence for the management team to know and really understand performance through KPIs so that they can use that knowledge to make the right decisions.

These KPIs should be few in number and appropriate to the level of management. A small number of key metrics should be reported daily and weekly. KPIs should provide a fast, high-level view of what is happening today and what is likely to happen in the short-term future. Moving to KPIs in this fashion will not only provide true value to managers but will also lighten the reporting load for the entire organization.

3. Deploy cloud technology that provides fast, relevant information, enabling collaboration

Finance can use technology to provide a performance management system that delivers what managers need—fast, relevant information. Avoid investing in complex IT systems that consume valuable time and money without providing reasonable value.

Instead, implement a dedicated system that employs cloud-based technology to enable unlimited numbers of managers to work together on driver-based forecasts, which are automatically aggregated at every level. This system should also have tight integration with data from other enterprise systems, so that it serves as the primary performance management system.

Why wait?

By implementing these three best practices, your finance team can transform itself and your company’s performance management practices. Your finance team can move beyond simply being effective at financial management and scorekeeping, and instead become a trusted and integral member of the strategic management team. And finance can offer real performance insights that can truly help your managers improve their results.

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

FP&A Done Right: Is Your Planning Process Hindering Decision Making?

June 18, 2021 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, explaining how and why you should foster a culture of planning.

Long planning cycles. Short-lived plans. Siloed efforts. Hard-to-find errors. And never enough time for strategic analyses.

Do these FP&A issues ring a bell?

They should, if your planning processes are largely manual and mostly spreadsheet based, and don’t lend themselves to collaboration or version control.

An over-reliance on spreadsheets and legacy on-premises applications constrains the organization with rigid, siloed planning. These legacy planning environments are inflexible and brittle, prevent collaboration, and fail to deliver insights that drive decision-making.

Often, finance leaders are not even aware of how manual processes such as the gathering and consolidating of data, cumbersome email-based communication, and complex report creation put a strain on finance resources—a strain that keeps the finance team locked in low-value tasks. And while markets, revenue targets, and costs constantly move, old-world planning processes hinder related planning and reporting and slows decision-making to a crawl. Leaders either don’t have numbers they trust or don’t have the insights needed for agile decision-making.

Create value in all corners of the organization

Opportunities to grow are exceedingly challenging in a highly competitive and increasingly global environment. CFO research surveys typically characterize their corporate innovation efforts as highly successful. The success rate is low because getting the people, processes, and data all moving in the same direction can be difficult. To create value in all corners of the organization—sales, marketing, operations, and HR—everyone needs to fully engage with the planning process.

A siloed, spreadsheet-based approach leaves operational leaders in the dark and keeps business planning out of sight. Stakeholders don’t know where they are falling short; they can’t manage what they can’t see. While traditional planning functions on a rigid schedule (e.g., monthly), business operations are incredibly fluid. No business leader should be forced to wait until the month-end report is generated to make a decision. A finance team’s inability to provide insights in a timely manner hampers decision-making across the organization.

It’s no wonder that forward-thinking organizations are opening their eyes to a more effective and efficient way to plan—modern planning. Companies that adopt a modern planning process are better prepared to identify and take advantage of growth opportunities and operate more efficiently. Modern planning is collaborative, so you can plan as a team, and it’s continuous, so you can rapidly adapt to change.

Fostering a culture of planning

Instead of complex legacy applications and hordes of spreadsheets strewn across the organization, competitive organizations leverage cloud-based planning solutions to respond proactively to an ever-changing marketplace. Enterprise performance management solutions that integrate planning with source ERP, CRM, HR, and payroll systems offer a single version of the truth that fosters a culture of planning built on trust and real-time data.

Forward-thinking finance organizations recognize that planning will no longer suffice in a real-time, data-centric environment. The days of building elaborate spreadsheets to forecast the business trajectory—only to put them away until the next planning cycle—are fading quickly, at least at companies that want to remain competitive. A new modern planning model is emerging, centered around cloud-based tools to build accurate planning models faster, reduce errors, foster collaboration, and drive better decision-making. As stakeholders are more involved in the planning process, they’re gaining greater trust in the data. Leading finance organizations are using modern planning to:

Free up finance time and capacity
Improve the accuracy and integrity of finance and accounting data, plans, and reports
Accelerate cycle times for critical finance processes like month-end close, operational reporting, planning, and what-if analysis
Enhance collaboration with business stakeholders

In short, these finance organizations are leading with insights to drive business decisions and, in the process, elevating the role of finance to be more strategic.

Change starts at the top

Modern planning requires a cultural shift, but the rewards make it worth the effort. It can be difficult to get people to move from the comfort of their familiar spreadsheets to cloud-based collaborative planning tools, and the change has to start at the top.

The key to successfully transitioning to a modern planning model is thoughtful change management, wherein all parties understand the value of centralized planning tools and how they can contribute. When everyone takes ownership and knows how they are expected to add value, innovative planning, analytics, and performance measurement engage more people—including sales, marketing, operations, and HR—in the process of planning, moving away from the old, static models of the past.

The true payoff of modern planning is realized when everyone is working together on a continuously updated plan that incorporates fresh, valuable, and trusted data.

Tomorrow’s winners will be the most agile

In summary, modern planning means business agility. And business agility means organizations like yours can think fast, move first, and change rapidly, while maintaining control and stability. It means you can understand not only what’s going on but also how you could respond and what effect your actions would have.

It enables you to meaningfully digest the new volume, variety, and velocity of data by capturing it all in a single, intuitive, integrated environment, and surfacing the critical information you need to make decisions.

It brings your whole business together by broadening participation in planning and strategy to improve both day-to-day operations and your understanding of the overall dynamics of your business.

It’s continuous and company-wide, supported by a platform that’s easy-to-use, fast, and powerful. That makes it easier to model complex scenarios, link together operational and financial plans, monitor executional results, analyze past and current performance, and drill down into (or roll-up) fine-grain reporting from any area of the business.

The world isn’t going to slow down, and markets aren’t going to get less competitive. In the long-term (and probably before then) business agility isn’t going to be just a nice-to- have, or even a significant differentiator.

It’s going to be the deciding factor between the businesses that survive, and the businesses that wish they had.

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

FP&A Done Right: 5 Ways Dashboards Empower The Office of Finance

April 23, 2021 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, exploring how to unlock hidden opportunities with dashboards & analytics.

Visualizing data is often the fastest way to identify trends and patterns that lead to insights and better decision making. That’s because the simple clarity of visualizing data via interactive dashboards can reveal hidden opportunities that likely would have been missed in more traditional analysis and sharing of data.

Here are five ways dashboards can help identify valuable insights that may have been overlooked in the past.

1. Dashboards encourage company-wide planning (or xP&A)

Simply making dashboards accessible to stakeholders throughout the organization represents a huge win in itself—and a significant step toward breaking down silos. Yet beyond that, increasing the number of people who have access to data presented in digestible formats exponentially increases the chances of those aha moments occurring. The production floor manager will surely have a different perspective than the CFO. When that perspective is informed with accessible data delivered via a dashboard, the stage is set for new efficiencies and improved productivity.

2. Dashboards show instead of tell

There’s a reason the phrases “go through the numbers” and “eyes glaze over” are often uttered in the same sentence. Traditionally, delivering financial information has largely been a one-way conversation with the finance team presenting mundane reports and data downloads. With the exception of the number crunchers in finance and accounting, many business partners get lost or disinterested when presented with a number or data overload. Dashboards avoid this challenge by elevating the data to the next level and using graphics and visualizations to clearly show data in formats that provide key context and clarity. When data gets presented in highly visual and familiar formats, business users can often quickly see challenges and opportunities that otherwise might have been missed.

3. Dashboards offer customized views for different thinkers

Different people consume information in a wide range of ways. Some may be more comfortable viewing data presented in standard bar, column, gauge, area, and doughnut charts. Yet others benefit from data presented in more engaging or interactive formats. Workday Adaptive Planning dashboards feature data visualization that includes funnels, dials, waterfalls, bubbles, histograms, radars, and Pareto charts. Users across locations and on any device can view data in the formats that connect with their unique way of learning and thinking.

4. Dashboards are ever-present

Even finance pros and business leaders who are adept at extracting insights from traditional reporting face the challenge of locating reports once they are filed away. And once people find the report, they have the time-consuming process of checking if the data is still accurate. Conversely, dashboards are continuously available via a wide range of devices with data updated in real time, assuring users that they are working with the latest available information. So if conditions change or a new opportunity arises, easy-to-access data visualization is there to support decision-making and reveal how an opportunity may be quickly leveraged.

5. Dashboards are inviting and simple to use

The simple power of dashboards is that they are easy to use and invite users to experiment, explore, and discover. By eliminating the complexity barrier, the odds of uncovering hidden opportunities expand dramatically. Ultimately, dashboards create the opportunity for self-service analysis for everyone. That allows any user to perform drilldown analytics, create period-to-period comparisons, and explore iterative what-if analyses that can effectively identify issues that need immediate attention while also identifying trends that could be leveraged through sales and targeted marketing efforts.

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

FP&A Done Right: xP&A and Modern Finance Planning

January 15, 2021 by Revelwood Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, written by Matt Shore. Shore, vice president and product strategist, explains xP&A and why it matters.

xP&A stands for extended planning and analysis—taking the best of modern finance planning and extending it across the enterprise. But it’s not new. For years, it has been known as company-wide planning.

Finance leaders whose organizations have been made more agile and strategic with modern planning and analysis have known for years that their approach to planning can transform other parts of the business. Now, as they work to recover from the global COVID-19 pandemic, that awareness is more valuable than ever.

Growing recognition around expanding the use of FP&A best practices beyond finance recently earned an industry imprimatur from Gartner, whose 2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions report said, “By 2024, 70% of new financial planning and analysis projects will become extended planning and analysis (xP&A) projects, extending their scope beyond the finance domain into other areas of enterprise planning and analysis.”*

We agree that bringing continuous, comprehensive, and collaborative planning to every part of an enterprise has not only arrived, it’s ascendant.

We’ve been advocating the concept since back when we began working with customers to harness the platform and processes of modern planning from financial planning to sales, workforce, and operational planning. Our solutions for enterprise planning are defined by powerful automation, enterprise-class scalability, intelligent planning assisted by machine learning, always-on cloud availability, and award-winning ease of use.

These requirements have essentially served as design standards for planning solutions from Workday, where we’ve always believed that the promise of enterprise planning can only be realized by linking finance and operations in a holistic and seamless way.

Extended planning, orchestrated by finance

Finance is the natural steward of enterprise data, so it makes sense that finance should orchestrate company-wide planning. According to Gartner, “The office of finance is uniquely positioned to drive continuous company-wide financial planning and analysis (FP&A) initiatives. Finance’s connection to all other business domains means that these initiatives will be capable of driving higher-quality decisions and outcomes.”*

In fact, Gartner says, “By 2024, 50% of new financial planning and analysis implementations, upgrades and replacements will be sourced from core financials vendors, due to superior integration and product bundling.”*

This capability has never been more critical. For operations, where plans are generally refreshed more frequently and based on greater volumes of data, understanding the financial impact of every decision can ultimately mitigate the risk of executing those decisions. And seamless access to current operational data and actuals can also improve the confidence of the C-suite in the firm’s business projections. And these days, who doesn’t need a bit more confidence?

Company-wide planning done right: Meeting the needs of xP&A

Developing a solution for planning across the enterprise isn’t a small undertaking. It requires three fundamental capabilities.

A flexible and scalable modeling platform

Those who’ve built models with traditional planning software are accustomed to limits on dimensions, or they know too well the experience of waiting (and waiting) on results. To solve this, and to enable modeling at enterprise scale, we developed Elastic Hypercube Technology—our groundbreaking, patent-pending modeling engine that doesn’t force organizations to make compromises that slow insight or limit the number of scenarios a team can evaluate. For company-wide planning, this means creating models for virtually any kind of functional use. You can model and plan at the work-group level and then combine those plans into a comprehensive, holistic model of the business. It’s modeling for an xP&A world.

The ability to seamlessly plan-execute-analyze business processes

Planning isn’t done in a vacuum, particularly in an xP&A context. For true company-wide planning, plans must be integrated to gain a comprehensive view of the business. Our federated planning architecture enables each function or business unit to have its own planning instance while preserving the ability to bring all the pieces together into a holistic plan. With federated planning, a change to one plan automatically updates all related plans. This architecture also makes it easy to dovetail planning with the applications organizations use to execute those plans (such as financial management or human capital management solutions), and then analyze data and results to support faster, smarter decision-making. Company-wide planning also requires a single source for truth, with plans and applications sharing the same data across planning and execution, just as Workday applications do today. As Gartner notes, “Suite-based applications consume data from a single source and share the same metadata and master data. This means that overall company-wide financial reporting and governance is substantially enhanced.”*

Easy adoption and use

Traditional planning platforms are notoriously difficult to implement and use. This has kept them locked away in the office of finance, their complex environments all but dooming them to be used by just a handful of highly trained analysts. For xP&A to take root in the form of company-wide planning, it was necessary to recognize that in business, everybody plans. So planning has to be easy. Here’s just one way we’ve improved ease of use: Active dashboards, announced at Adaptive Live earlier this year, blend driver-based planning with interactive analytics to help users assess the impact of their changes in real time. And rich data access rules ensure administrators can be very specific about what data users can view or edit, making it that much easier to safely enable more stakeholders to be active participants in company-wide planning.

The journey to company-wide planning: xP&A in action

For most companies, the journey to company-wide planning begins in finance. Many companies, after seeing the success they’ve had there, expand planning to other departments like HR for workforce planning and sales for sales planning, with both plans linked back to the corporate model. This federated planning environment allows each entity and function to plan the way it needs to, but all plans are seamlessly connected to a holistic corporate plan. This helps create a more agile, competitive organization where decisions are made based on insight rather than instinct.

Customer surveys show that Workday Adaptive Planning customers are prime examples that company-wide planning is indeed the future. Demonstrating classic use cases for xP&A, they’ve extended their modern planning environment into areas as varied as inventory and shop floor space planning, sales rep ramp modeling, and product pricing planning. Many others are using our workforce planning solution to model their optimal workforce, and still more are relying on their planning environment to design a return-to-work strategy at a time of unprecedented disruption.

Take Rubrik, a rapidly growing global provider of cloud-based data management and protection solutions. Rubrik initially deployed Workday Adaptive Planning in finance to streamline budgeting and accelerate quarterly close. Building on that success and to achieve a more accurate and timely top-line plan, the company extended its use of Workday Adaptive Planning to sales finance and sales operations to automate bookings, improve seller capacity and productivity, and plan and manage territories and quotas.

Ajay Sabhlok, vice president of IT business applications at Rubrik, describes the company’s xP&A pivot to company-wide planning as a significant step forward.

“To automate planning in a comprehensive manner across the company,” says Sabhlok, “is setting the foundation for growth.”

In the end, that’s what company-wide planning is all about. In a world where the future is harder and harder to predict, agility is everything. As thousands of Workday customers already know and as many more throughout the industry are coming to realize, finance is showing the entire enterprise how to plan for what’s next. No matter what you call it—xP&A, company-wide planning, or something else—one thing is certain. This is the future of planning.