Making Financial Performance Management RealGreg Ferenc NagySolution Specialist IBM Cognos, AT/EE, CIS/Russia

Session Objectives

After this session, you will be able:• To discuss the role of Financial Performance

Management in today‘s business environment• To identify the value that Financial Performance

Management can bring to the organization• To obtain insights into how to structure a Performance

Management program and how to leverage the right Cognos resources

Does this sound familiar?

Spreadsheets Failing “there have been well-documented cases of errors and losses resulting from spreadsheet manipulation errors and accidents.” Source: Gartner, August 2007

Disparate Systems “Average finance organizations operate 11 finance systems per billion dollars of revenue.” Source: Hackett Group, 2007

Business Risks“62 percent of enterprises … encountered a major risk event … 42 % of these enterprises were not well prepared for the event.” Source: IBM Global CFO Study 2008

The Monthly Maze

Regulatory

Compliance

Investor

Scrutiny

Forecast

AccuracyIFRS

Spreadsheets

failing

Monthly Reporting PackageManaging Risk

Disparate

Systems

FPM as the GPS

Regulatory

Compliance

Investor

Scrutiny

Forecast

AccuracyIFRS

Risk

Management

Spreadsheets

Monthly Reporting PackageDisp

arate

Systems Managing Risk

Finance Function Makes a Difference

Driving Performance “68% anticipate serving as the performance

management experts for the rest of the company.” Source: CFO Research, Feb 2008

…Enterprise Rewards “ World-class EPM organizations

deliver 2.4 times the equity market returns of industry-peers companies.”

Source: Hackett Group, 2008

…with Professional Upside “Corporate performance and CFO performance are inextricably linked; CFOs that deliver shareholder value are most likely to achieve the next career step

they desire.” Source: CFO Executive Board, Strategies

for Inflecting CFO Performance, 2004

Finance Function Makes a DifferenceThe majority have already started to enjoy practical rewards

Source: CFO Research, February 2008

Question: How automated is your company's management of

business performance?

HIGHLYAUTOMATED14%

PRIMARILYMANUAL32%

PARTIALLYAUTOMATED54%

68% have started to automate

Finance Function Makes a DifferenceThe majority have already started to enjoy practical rewards

C-SUITE EXECUTIVES

BOARD/INVESTORS

FINANCE

BUSINESS UNIT/LINE MANAGERS

OTHER STAFF/EMPLOYEES

0% 10% 20% 30% 40% 50% 60% 70%

Highly Automated

Partially Automated

PrimarilyManual

PERCENTAGE OF RESPONDENTS SAYING “VERY SATISFIED”

Question: How satisfied are

each of these constituencies with the amount, utility, and timeliness of

performance management

available to them?

Highly automated companies report higher levels of satisfaction with their performance management data

Source: CFO Research, February 2008

Folksam Insurance

Performance Pain

60% of planning time spent collecting and consolidating from SAP R/3 and other sources

40% of planning time spent using information for planning

Cognos Impact

Reduced time spent collecting and consolidating data to 15%

85% of effort spent on productive, future-oriented work

750 daily users with access to market trends, scenario planning and forecasting, revenue and cost statements, and sales planning;

New insight into operating costs per cost center and product, sales relative to budget, and premiums paid and disbursed insurance sums

Nucleus Research www.nucleusresearch.com

Performance Management Roadmap

AUTOMATION TRANSFORMATION

Performance Management Processes • Enterprise Planning• Financial Consolidation and Corporate Reporting • Financial Analytics, Reporting, and Profitability Management• Scorecarding and Strategy Management

Address Initial Needs

People Free up experts Engage casual users

Process Eliminate re-keying Enable process visibility

Technology Leverage familiar user

interfaces (Excel, Web) Implement workflow

Move Beyond Spreadsheets

Cognos Advantages Structures and

automates all key financial PM processes

Delivers systems “driven” by finance

Drive Best Practices

People Redeploy experts Rethink user communities

Process Rethink the horizons Drive Faster cycles

Technology Leverage common data

architecture Model non-financial

measures and metrics

Cognos Advantages Offers flexible systems

that support best practices

Provides know-how and resources to support transformation

Best Practices

Drive Best Practices

RESEARCH, CASE STUDIES, ARTICLES

MEMBERS AND PEER NETWORK / COMMUNITYASSETS, RESOURCES, EVENTS

Steve Lukens Global Leader,Financial Management, IBM

David AxsonPresident, The Sonax Group

Jeremy Hope, BBRT

Innovation RoundtablesMember Communities

Best PracticesPerformance Blueprints

Wilfried Lux, FH Sankt Gallen

Drive Best Practices

Blueprints Pre-defined data, process and policy model Reflecting Best Practices Integrated and aligned Enables rapid time-to-value Tried, Tested, Validated Flexible, open, smart

Drive Best Practices

Project Accelerator

Tangible Best Practices

Smart Guide & Head Start

Benchmarks

Drive Best Practices

PERFORMANCE BLUEPRINTS BY FUNCTION

Best-practice blueprints use planning, analytics, consolidation and BI capabilities to address recurring financial and operational planning and management processes

NEW! Strategic Finance Expense Planning & Control Revenue Planning & Forecasting Workforce Planning Capital & Initiative Planning …

Management and Financial Reporting (MFR)

Close, Consolidate, Report (CCR)

NEW! Group Consolidation and Corporate Reporting (GCCR)

…

Extend Enterprise-Wide

Financial Management

ExpenseManagement

RevenueManagement

Long Term Asset Management

Cognos Advantages Easily models and links

operational plans, analytics, and metrics

Supports rapid prototyping Provides know-how and

resources to support transformation

New significantcustomer

New HeadcountCapitalExpenditures

Updated P&L Adjusted Budget

Customer Profitability

Beyond Finance

InventoryManagement

Extend Enterprise-WideTop Planning Areas

From A Survey of 75 Cognos Customers

BeyondFinance

67%Finance33%

Human Resources

Sales Planning

Prod. & Distrib.

Marketing

Other

Financial Statements

Expense Planning

Capital & Initiative

Extend Enterprise-Wide

PERFORMANCE BLUEPRINTS BY INDUSTRY

Best-practice blueprints that leverage PM capabilities by design to address industry-specific performance management processes linked to competitive advantage

Financial Services Branch Performance Retail Banking Customer Segment

Performance Corporate Banking Customer Segment

Performance Product Performance for Insurance Risk-Adjusted Profitability for Banking (IBM)Life Sciences Clinical Trial Planning Sample Optimization

Manufacturing Sales & Operations Planning Trade Promotion Management S&OP Executive ReviewRetail Store Operations (P&L) Store Development Merchandise PlanningGovernment Program Objectives Mgt

Advancing Performance Management

People Lead culture change Develop competency

Process Improve process

linkages

Technology Span enterprise

systems; reconcile “differences”

Cognos Advantages Provides all PM

capabilities Leverage all PM data

sources Supports development

of competency centers

GOALS & STRATEGY

PEOPLE & EXECUTION

SCORECARDS, REPORTS, PLANS

& FORECASTS

GOALS & STRATEGY

PEOPLE & EXECUTION

SCORECARDS, REPORTS, PLANS

& FORECASTS

Drive Performance

Performance Management SystemRequirements

AUTOMATION TRANSFORMATION

Performance Management Requirements• Structure and Automate Core Processes• Drive and Sustain Best Practices• Report, Analyze, Model, Plan, and Score Enterprise-wide Performance• Span all systems and connect management decision-making

Wrap Up and Next Steps

Get Started The Performance Manager Book

Innovation Center for Performance Management

• Hackett

• David Axson

• Jeremy Hope

Cognos Discovery and Validation Workshop

• David Norton

• Brett Knowles

• Larry Maisel

• Accenture

• Deloitte

• IBM

Why Cognos?

Leader in Performance Management• Focus and expertise• Independent system• Customer success

Global Innovation Center for Performance Management

Functional and Industry Performance Blueprints

Global Services, Support, and Partner Network Global reach and resources of IBM