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© 2016 Host Analytics Inc., All Rights Reserved -- Slide 1
Leader In Cloud-Based Enterprise Performance Management
John Head – Vice President of Services
Matt Wilson – Account Executive
E P M C L O U D B E S T P R A C T I C E S
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 2
How Many of You Feel Like This?
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 3
• The State of Budgeting and Planning
• Five Steps to Improved Budgeting,
Planning and Forecasting
• Customer Examples
• Q&A
top
ics
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 4
EPM Drives Efficiency, Accountability and Insight
Model
Plan
Close Report
Analyze
$
Efficiency Faster Processes
Accountability Across the org
Insight Actionable
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 5
What’s Impacting EPM?
Market Forces
• New Regulatory
Requirements
• Global Competition
• Shorter Product Lifecycles
• More Volatility
• Exploding Volumes of Data
• More Tech-Savvy Workforce
Impacts on Finance
• Reduce Manual Processes
• Dynamic Planning
• More Analytics
• Scenario Modeling
• Fast Delivery of New Apps
• Mobile Support
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 6
State of the Market - What Tools?
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 7
State of the Market – Spreadsheet Usage
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 8
State of the Market – Spreadsheet Usage
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 9
Excel Relationship
The Good
Flexibility, familiarity, speed, cost
The Bad
Error-prone, complex models can break
Limited data security and scalability
No workflow, controls, audit trail, etc.
Implications
Multiple versions of the truth
Hours or days of extra effort
Erroneous reports and forecasts
Lack of confidence in the results
It’s a Complex Relationship
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 10
Excel Errors Impacting Companies
Spreadsheet Mistake Costs
Tibco Shareholders $100
Million (2014)
2012 trading loss of $6.2
billion misstated by about
$2 billion due to Excel
error
88% of spreadsheets contain errors
According to a University of Hawaii study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 11
State of the Market – Budgeting Process
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 12
State of the Market - Forecasting
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 13
State of the Market - Satisfaction
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 14
State of the Market - Dissatisfaction
Source: BPM Partners’ 2015 BPM Pulse Research Study
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 15
State of the Market Summary • Today’s market requires a dynamic approach to
planning and budgeting
• Many companies still relying on spreadsheets, manual
processes
• Leading companies are:
• Adopting EPM Applications
• Putting less focus and effort into annual
budgeting
• Using regular, rolling forecasts to update budget
assumptions
• This leads to better business agility, competitiveness
• How to get there?
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 16
Planning and Forecasting Best Practices - 5 Tips
1 – Standardize and Automate
2 – Collect Financial Data in One Place
3 – Unify Financial and Operational Data
4 – Use Flexible Processes and Tools
5 – Ensure Data Security and Integrity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 17
Planning and Forecasting Best Practices - 5 Tips
1 – Standardize and Automate
2 – Collect Financial Data in One Place
3 – Unify Financial and Operational Data
4 – Use Flexible Processes and Tools
5 – Ensure Data Security and Integrity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 18
The old way of budgeting
Finance
Emails
Templates to
managers
Finance
Creates
Templates
Dept.
Completes
Template
Dept.
Emails
Finance
Finance fixes
broken templates
and becomes
owner
Finance Stays up
all night working
on manual
consolidation
Finance presents budget to
CEO and business tells CEO
that Finance changed the
numbers
Countless hours are
wasted trying to explain
what ended up in the
budget
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 19
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 20
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 21
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 22
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 23
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 24
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 25
Using Budget Templates
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 26
The new way of budgeting
Finance updates
templates in
Host
Finance meets
with depts. To
develop a plan
Dept’s complete
templates for
opex, capex and
workforce
Finance reviews
completed
templates with
dept and approves
Finance presents
budget to CEO
directly from host
reports
Actual ERP data
loaded to host
and available to
business
People are happy
and our business
is more informed
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 27
Planning and Forecasting Best Practices - 5 Tips
1 – Standardize and Automate
2 – Collect Financial Data in One Place
3 – Unify Financial and Operational Data
4 – Use Flexible Processes and Tools
5 – Ensure Data Security and Integrity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 28
Fragmented Data Problem
Corp
Plan
Div
Plan
Div
Plan
Workforce
Plan OPEX
Plan
CAPEX
Plan
Workforce
Plan OPEX
Plan
CAPEX
Plan
Workforce
Plan OPEX
Plan
CAPEX
Plan
Div
Plan
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 29
A Better Approach
Excel as a Front-end
• Data Entry
• Reporting
• Ad hoc Analysis
• Charts and Graphs
• Personal Models
EPM Suite as a Secure,
Scalable Back-end
• OPEX Plan
• Workforce Plan
• CAPEX Plan
• Revenue Plan
• Project Plan
• Sales Plan
• Financials
• HR
• CRM
• Data Warehouse
• Spreadsheets
• Other
Multiple Data Sources
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 30
Cloud-Based EPM Suite
ERP HCM CRM SSO Spreadsheet Cloud apps External Data Dell Boomi
Planning Consolidation Reporting Modeling
Data Integration
Operational Planning Solutions
EPM Application Modules
Analytics
ERP HCM SSO Cloud Apps External Data
EPM Platform Common Data, OLAP, Dimensions, Calculations, Security
CRM Spreadsheets
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 31
Planning and Forecasting Best Practices - 5 Tips
1 – Standardize and Automate
2 – Collect Financial Data in One Place
3 – Unify Financial and Operational Data
4 – Use Flexible Processes and Tools
5 – Ensure Data Security and Integrity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 32
EPM Never Really Got Outside of Finance
Finance
Sales
Marketing
Services
Operations
Software was too hard to use
Deployment model didn’t cooperate
Finance collecting spreadsheets
Opaque buckets-of-money effect
Ordered EPM and got FPM
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 33
We Created
Top-Down
Budgets
that Didn’t
Align with
Ops Plans
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 34
Reduce reliance on disconnected spreadsheets
Integrate operational plans with financial plans and forecasts
Empower with real-time finance and operating metrics
Anticipate business outcomes, improve alignment
Collaborate securely across Excel, Web and Mobile
Opportunity to Unite Finance and Operations
Sales
Finance
Mkting
SC
Services
Integrated
Plan
Sales
Finance
Mkting
SC
Services
Integrated
Plan
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 35
Support and Align Planning and Operational Modeling
Strategic Planning Financial Budgeting Operational Planning
Structured
Planning
Processes
M&A Modeling Sales Volume Labor Model
Ad Hoc Modeling
Planning vs. Modeling
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 36
Planning and Forecasting Best Practices - 5 Tips
1 – Standardize and Automate
2 – Collect Financial Data in One Place
3 – Unify Financial and Operational Data
4 – Use Flexible Processes and Tools
5 – Ensure Data Security and Integrity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 37
The Planning Process
Strategic Financial Operations Rolling
Forecast
• Worst Companies: 50 Days for Annual Budget
• Best Companies: 20 Days for Annual Budget
• Best Practice: Rolling Forecasts
Source: APQC Open Standards Benchmarking Data 2013
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 38
Seven Key Problems with Traditional Budgeting
1. Budgets take too long to prepare (often making them out of date when published)
2. Budgets cost too much
4. Budgeting causes gaming that erodes the ethical foundation of the company
3. Budgeting is based on assumptions that are nearly always wrong
Source: Beyond Budgeting Roundtable
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 39
5. Budgeting triggers unnecessary spending
6. Budgeting gives the illusion of control by robbing potential
7. In the words of Jack Welch, “It [Budgeting] brings out the most unproductive behaviors in an organization…” (Jack Welch, “Winning,” p. 189)
Source: Beyond Budgeting Roundtable
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 40
How good are you at predicting the future?
Budgeting is Based on Assumptions that are Nearly
Always Wrong
Source: Beyond Budgeting Roundtable
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 41
Rolling Forecasts Support Dynamic Planning
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 42
Rolling Forecasts Support Dynamic Planning
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 43
Driver-Based Planning
Source: Grant Thornton
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 44
Planning and Forecasting Best Practices - 5 Tips
1 – Standardize and Automate
2 – Collect Financial Data in One Place
3 – Unify Financial and Operational Data
4 – Use Flexible Processes and Tools
5 – Ensure Data Security and Integrity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 45
What’s So Special About Finance’s Data?
• Ultimate “scorecard” of company performance
• Competitively sensitive
• Legally sensitive
– Selective disclosure
– Insider trading
• Compliance
– Sarbanes-Oxley
– Personal and criminal liability for company officers
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 46
Source: Proformative survey. October 23, 2013. N= 103 finance professionals
Secure….Compared to What?
Spreadsheets
79%
QUESTION:
“What technology do you think has the
most security risk?”
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 47
Security Must-Haves
Complete Security of:
• Data Transfer
• Application Interfaces
• Data Storage
• User Access
In Addition to:
• Compliance
• Redundancy, Recovery, Business Continuity
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 48
High
availability
Secure data
centers
No spreadsheet
risks Security and compliance
audits & testing
Cloud Security Requirements
• T4 data centers
• Two factor, biometric
security access
• Mech. & electrical
systems in separate,
secured areas
• No burden
• Fast
• SLA
• Historical
performance
• Redundancy &
business
continuity
• AICPA SSAE-16 SOC1
Type 2 & SOC2 audits
• Internal & third-party
penetration testing
• US EU Safe Harbor
• Access controls
• SSL encryption
• Central database
No-wait security
patches
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 49
The Cloud is More Secure
“Conventional IT wisdom says that you’re
safer and more secure when you control your
own on-premises datacenter. Yet if you think
about every major data breach over the
last two years, whether Anthem, Sony,
JPMorgan or Target, all involved on-
premises datacenters, not the cloud.”
The Cloud Could Be Your Best Security Bet, TechCrunch, April 4 2015
Encryption and Access Control
Secure Data Centers
Security and Compliance Audits and Testing
No-Wait Security Patches
High Availability
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 50
• The State of Budgeting and Planning
• Five Steps to Improved Budgeting,
Planning and Forecasting
• Customer Examples
• Q&A
top
ics
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 51
© 2016, Host Analytics, Inc. All rights reserved. 51
Leading Healthcare Providers Use Use Host Analytics
Medium
Large
Small
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 52
© 2016, Host Analytics, Inc. All rights reserved. 52
Medium
Large
Small
Medical Device Manufacturers
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 53
© 2016, Host Analytics, Inc. All rights reserved. 53
Medium
Large
Small
Pharma & Bio-Tech Customers
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 54
© 2016, Host Analytics, Inc. All rights reserved. 54
Reduce Budget Process from 8 Weeks to 3 Weeks
• Completely dependent on Excel
• Inability to prevent errors
• Lack of IT resources to support new software
• Sole burden lies on finance team
• Little to no budget input from department managers
• 30+ depts.; changes in staffing models require overhaul
of excel allocations
• What-if scenarios not explored due to time constraints
• Cumbersome, error-prone forecasting process
Before After Process Improvements
• Reduced a labor intensive process from 8 to 3 weeks
• Eliminated multiple re-work of allocations
Financial Accountability
• Active participation by dept. managers creating ownership and financial accountability
Immediate Visibility to Actuals
• Dept. managers who previously had no visibility into their results can now generate budget/actual monthly reports
• Dept. managers have capability to drill-down into financial accounting system, react quickly to data
Health Integrated is a health management company. 300+ employees in 17
states.
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 55
© 2016, Host Analytics, Inc. All rights reserved. 55
Abbott Chooses Host Analytics For Cloud Benefits
• 150 different budgeting solutions
• No standard chart of accounts
• Long budgeting cycle
Before After
• One solution replaced disparate
systems
• Automated the budget process
• Consolidate budgets from entities
across the globe
• Lower TCO with Cloud
• Finance runs it
• Easy to use for 500+ participants
Abbott is a global, broad-based health care company devoted to discovering new
medicines, new technologies and new ways to manage health.
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 56
© 2016, Host Analytics, Inc. All rights reserved. 56
Tandem Diabetes Care® is a rapidly-growing medical device company based in San
Diego, California. The company takes an innovative, user-centric and integrated approach
to the design, development and commercialization of products for people with diabetes
who use insulin.
Adopting a Budgeting Solution That Supports Growth
• Company outgrew Excel-based
approach to budgeting and forecasting
• Needed a solution that was more scalable, less prone to errors, better audit trails
• Microsoft Dynamics couldn’t meet flexible budgeting requirements
Before After • Single version of the truth for budgets
and plans
• Improved traceability of budget assumptions
• Better data integrity and audit trail on forecast assumptions
• Better visibility into supporting detail
• Foundation for future growth
© 2016 Host Analytics Inc., All Rights Reserved -- Slide 57
Leader In Cloud-Based Enterprise Performance Management
Get Additional Questions Answered
Website: Hostanalytics.com
Email: [email protected]
Phone: 866-391-4678
Twitter: @host_analytics
Blog: www.hostanalytics.com/blog
Q&A