Today, arcplan put out a press release about the 4 elements of a perfect planning process – and no, it’s not fire, earth, air, and water. You may have just emerged from your budgeting and planning season wondering if there’s a better way to go about it next time, if you can make it easier and more repeatable, or if you can help add value to the process. If so, read on. This press release covers how and why automation, linkage to corporate goals, rolling forecasts, and analytics are the keys to perfect planning.
The 4 Elements of a Perfect Planning Process
Planning can be the most dreaded activity or the most lauded, depending on how effectively the finance team manages it. But it is undoubtedly one of the most important exercises a company undergoes, as it lays out the future finance situation, which in turn should drive efficiency, improve performance, and unite everyone behind a common vision of success. As more companies around the globe deploy arcplan for budgeting, planning and forecasting, this international solution provider has compiled a list of best practices its customers follow to ensure planning perfection.
For many companies large and small, the planning process begins in Excel and involves a lot of manual data consolidation and time spent reconciling multiple versions of spreadsheets. This error-prone process is an incredible waste of time; planning in this way is inefficient and detracts from time that should be spent analyzing plans and working towards company goals. Automation is a better approach to aggregating plan data and has positive effects like improved consistency and time savings. A solution like arcplan Edge streamlines the consolidation process by simultaneously connecting to multiple data sources. This enables the system to act as a central repository with data entry and write-back functions, eliminating the reliance on spreadsheets by allowing planners to interact with live data in an Excel-like web interface. It also provides automated alerts based on user interaction, such as alerting managers when direct reports have completed a task in the budgeting workflow. Automation is hugely beneficial to the planning process because it enables timely completion of plans and diverts focus from the mechanics of the budgeting process to actual analysis.
Budgeting, planning and forecasting is a critical process for organizations of all sizes who want to ensure profitable operations and well, plan for the future of their business. For finance teams who haven’t mastered the art of effective planning, month-end financial reporting and year-end planning is a chore. Those who have their financial processes down to a science enjoy timely completion of plans, plans that align with corporate goals, rolling forecasts, and the ability to analyze and dissect data as needed to make better decisions.
Aberdeen’s research study on Improving S&OP with Planning and Forecasting Technology provides insight on how best-in-class companies address key financial and business planning objectives. IMAX Corporation – the immersive motion picture technology company – was featured in the report. They’re an arcplan customer and a great example of a company that has fine-tuned sales and operations planning in order to improve business outcomes. IMAX is reaping the benefits of planning done right. Here’s how they made it happen:
1) They use technology to consolidate and analyze data.
Finance teams can waste many hours, days and even weeks consolidating data from various sources to create monthly and quarterly reports, leaving no time to analyze that data and make forecasts. IMAX overcame this problem by implementing an arcplan financial planning solution that…
I’d like to extend an invite to our readers to attend CFO Magazine’s CPM Conference in Philadelphia at the end of this month (January 27-29 at the Loews Hotel). Attendees will learn best practices for linking finance with IT to drive performance, network with fellow finance professionals, earn CPE credits, and return to work with new ideas for maximizing corporate performance.
Check out the agenda, learn more about the event, and register here >>
arcplan is a Roundtable Sponsor, so we’ll be holding 2 roundtable discussions during breakfast on January 29th. You’ll need to sign up in advance for one of our topics:
Not Your Father’s Financial Statement
The standard financial reporting process that your organization uses to manage itself has been in existence for over a century. There is no reason why executives should settle for financial statements that were first designed prior to the existence of computers. Join us to discuss best practice techniques to visualize the data locked in your financial systems and alternative formats for your financial statements. Let’s talk about making your statements more visual and interactive with ratio analysis using radar graphs, historical performance using bridge and waterfall analysis – in effect, let’s discuss how to make your company’s financial data more consumable to a broader audience.
Next-Generation Budgeting for Contract, Capital and Indirect Projects
Your organization’s budgeting process used to be simple when your business wasn’t so complex. The act of revenue, expense and capital planning used to be a singular exercise. With many organizations moving to more project-based budgeting and planning for contract, capital and indirect projects, the challenge for modern-day CFOs is to keep up with each budgeting project as its own business unit. The session will review some of the key challenges associated with differentiating financial project planning vs. traditional program and project management planning, managing multiple budget threads and rolling up this data into a final integrated budget, identifying organization and resource constraints in a project-based organization, and utilizing technology to automate larger budgeting processes with the same amount of resources.
Will we see you at Corporate Performance Management 2013?
In Part 1 of this post, I outlined 2 pitfalls to avoid when deploying budgeting, planning and forecasting (BP&F) systems. Let’s follow up with 3 more rocks in the road to avoid on your way to project success:
3. The wrong team
Don’t be fooled into thinking that developers are the only ones needed to make your new planning system a reality. Your “dream team” should include project managers, functional experts, platform architects, data architects and of course, the project sponsor.
The project sponsor is instrumental in driving the approval of the project to begin with and stays involved during implementation (supporting the project manager, making decisions, ensuring the project continues to support the business’ priorities, managing relationships with stakeholders and the vendor). He or she is also pivotal once the project is complete. Overseeing adoption of the system may ultimately fall on this person. You could have the most perfect budgeting and planning solution ever developed, but if no one uses it, the project is a failure. It’s this person’s job to ensure that stakeholders understand and use the system as he/she is the one who identified the need for change and should be committed to seeing it through.
There are sometimes 2 project managers – one provided by the vendor and one from the client organization. The vendor’s project manager will steer the ship, be mindful of the scope of the project, communicate progress with stakeholders and ensure that the project is on time and on budget…
The financial success of any organization begins with a well-structured budget for each department. Just having this budget/plan in place does not guarantee success, but not having a plan guarantees failure.
But with only half of organizations’ plans being accurate and two-thirds not being able to investigate the details of their budgets in real time, many companies are planning major modifications to their budgeting and planning because they are painfully aware of the shortcomings of their process.
The implementation of a comprehensive budgeting, planning and forecasting (BP&F) tool should not be taken lightly. Though BP&F solution deployments can take as little as 6 weeks or as much as 4 months depending on the complexity, these projects require significant forethought, resources, and strategy. With this in mind, here are some pitfalls to avoid if at all possible. These of course apply to all business intelligence projects, not simply BP&F:
1) Unrealistic scope
An unrealistic scope is the #1 project impediment we see at arcplan. Because our solution, arcplan Edge, is fully customizable, we enable our customers to not compromise on their requirements. However, not every company has the funds to deploy every item on their wish list in Phase I of the project. So what can you do to ensure project success?