Transcript Operational & Financial Planning - IBM - IBM
Operational & Financial Planning
Greg Ferenc Nagy, IBM Cognos, AT/EE, CIS/Russia
Session Objectives Purpose of this session is to describe how: Improving performance management requires more than automation of the existing planning, budgeting, and forecasting process Leading companies are adopting best-practices and moving performance management beyond finance.
IBM Cognos can help you reduce the time and risk to drive greater business value.
TODAY’S PERFORMANCE MANAGEMENT SYSTEMS Designed in 1930’s when market volatility was low When companies could ‘ship everything they produced’ Management practices: • Detailed, top-down annual budgets • • Infrequent forecasts Not linked to business drivers nor operational plans • • Not linked to strategic objectives Not linked to market events
SPEED AND VARIABILITY ARE INCREASING
Results: Resources not optimized Long time delays Missed revenue and profit opportunities
COMPANIES NEED TO SYNCHRONIZE FINANCIAL & OPERATIONAL DOMAINS
F I N A N C I A L Strategic Planning Target Setting Operational Planning Financial Planning Reporting Forecasting
Corporate Planning
EPS, market share, quality, growth…
Corporate Reporting and Analysis SALES & MKTG HR IT OPERATIONS
Sales Forecasting Qualification/close Promotions planning
Headcount Planning Attrition rate Resource effectiveness analysis
IT Portfolio Planning ROI/TCO Analysis Shared Services Planning
Demand Planning Stock-outs Throughput analysis O P E R A T I O N A L
ENTERPRISE PLANNING ALIGNS CORPORATE OBJECTIVES…
EXECUTIVE MANAGEMENT SALES
with operating plans linked to market events and operational drivers
PRODUCTION AND DISTRIBUTION PURCHASING CUSTOMER SERVICE TECHNOLOGY IT/R&D HUMAN RESOURCES
Financial Performance Management Challenges
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 percent of these enterprises were not well prepared for the event.” Source: IBM Global CFO Study 2008
Benefits of IBM Cognos Solutions
PLANS & FORECASTS Forecasts Top-Down & Bottom-Up Alignment Connected Planning Models IMPACT: Timely, reliable forecasts & plans that align operational tactics with financial targets. Better, confident resource allocation decision-making.
IBM Cognos Solutions for Enterprise Planning
Pre and Post-Planning
Alternative hierarchies, Allocations, Reporting and Analysis
PLANS & FORECASTS Collaborative Plan & Forecast
Emphasis on user experience; workflow; auditability and process control
RETAIL
CUSTOMERS USING IBM COGNOS ENTERPRISE PLANNING SOLUTIONS
PHARMA/ HEALTHCARE FINANCIAL SERVICES MANUFACTURING
ENERGY
CUSTOMERS USING IBM COGNOS ENTERPRISE PLANNING SOLUTIONS
PROFESSIONAL SERVICES CONSUMER GOODS FOOD & BEVERAGE TELECOMMUNICATIONS PUBLIC SECTOR
IBM COGNOS PLANNING CUSTOMERS & THEIR PRIMARY DATA SOURCES
Essbase
IBM Cognos Solutions
Replaces spreadsheet-only processes Engages the whole organization to make better informed decisions Replaces rigid, annual budgeting with continuous planning for higher responsiveness Supports best practices such as drive based planning and rolling forecasts Connects operations and finance Cognos 8 Planning Cognos TM1 Performance Blueprints
ENTERPRISE PLANNING Cognos 8 Planning and TM1
Post-Planning
Goal seeking, Allocations
High Participation Plan & Forecast Pre-Planning Analytics
Alternative hierarchies, trending
PERFORMANCE MANAGEMENT ROADMAP
AUTOMATION ---------------------------------- TRANSFORMATION ----------------------------
1
ADDRESS Initial Needs
2
DRIVE Best Practices
3
EXTEND Enterprise Wide
4
ADVANCE Performance Management Embrace and Extend Your Existing Infrastructure
Automating the Planning Process With Cognos Planning & TM1
4 Centralized Modeling Approach Familiar Environments Web, Excel Centralized Control and Management 100% Web : Consumption Integration with Cognos PM portal Central application management – process, deployment, security Integrated EXCEL capabilities
DRIVE BEST PRACTICES
AUTOMATION
1
ADDRESS Initial Needs
2
---------------------------------- TRANSFORMATION --------------------------- DRIVE Best Practices
3
EXTEND Enterprise Wide
4
ADVANCE Performance Management Support Best Practices
DRIVER BASED PLANNING
ROLLING FORECASTS
TIMEFRAME-APPROPRIATE PLANS
HIGH PARTICIPATION
A WIDER / DEEPER VIEW Cognos Innovation Center Performance Blueprints
BEST-PRACTICE THOUGHT LEADERSHIP
AUTOMATION ---------------------------------- TRANSFORMATION ----------------------------
1
ADDRESS Initial Needs
2
DRIVE Best Practices
3
EXTEND Enterprise Wide
4
PM for Strategy Execution Axson Sonax RESEARCH, CASE STUDIES, PUBLICATIONS Hope BBRT Roth Hackett ASSETS, RESOURCES, EVENTS Business Content Customer Forums Norton BSCol Strategy Development Performance Blueprints MEMBERS AND PEER NETWORK / COMMUNITY …
Enterprise Planning
Performance Blueprints: Functional Solutions
Pre-configured solution building blocks that:
• Pool collective
best-practice knowledge
• Accelerate time-to-value • Increase project success rate
OPERATIONS, MARKETING, ETC.
Reports
Income Statements Balance Sheet
Cash flow Financial Ratios STRATEGIC FINANCIAL PLANNING & FORECASTING CAPITAL EXPENDITURE PLANNING Depreciation Expenses EXPENSE PLANNING & CONTROL SALES SALES PLANNING & FORECASTING HUMAN RESOURCES WORKFORCE PLANNING Headcount & Compensation Expenses FUNCTIONAL SOLUTIONS
Strategic Financial Planning & Forecasting Strategic Long Range Planning Risk Analysis Sales Planning & Forecasting Sales Compensation Planning Workforce Planning Expense Planning & Control Allocations Capital Project Planning Discretionary Capital Expenditure Initiative Planning
EXTEND Enterprise - Wide
AUTOMATION
1
ADDRESS Initial Needs
2
---------------------------------- TRANSFORMATION --------------------------- DRIVE Best Practices
3
EXTEND Enterprise Wide
4
ADVANCE Performance Management Model the Whole Business
Link operational plans to financial plans
Increase forecast reliability
Performance Blueprints accelerate implementations Cognos Solution Map Industry Performance Blueprints Financial Services Retail Public Sector Manufacturing Life Sciences
Extend Enterprise Wide
Continued Investment in Industry Blueprints
Manufacturing
Trade Promotion Management
S&OP Executive Review
Sales & Operations Planning
Transportation and Logistics Performance
• •
Public Sector
Program Objective Memorandum (POM)
Grant Thornton & Cognos Federal Budget Planning & Performance Framework Partner – Business BearingPoint POM Budget Planning – Business Partner Higher Ed Performance Mayor’s Scorecard
Retail
Store Operations
Store Development
Promotion Planning Merchandising Performance Management Retail Financial Workbench
Pharmaceuticals & Life Sciences
Clinical Trial Planning
Samples Optimization (Joint w/ TM1) Clinical Trial Enrollment Forecasting Sales Quota Allocations
Banking & Financial Services
Retail Branch Performance Retail Banking Customer Segment Performance Corporate Banking Customer Segment Performance Insurance Product Profitability Cognos & IBM Risk Adjusted Profitability for Banking – Business Partner BP
Loan Pricing
ADVANCE PERFORMANCE MANAGEMENT
AUTOMATION
1
ADDRESS Initial Needs
2
---------------------------------- TRANSFORMATION --------------------------- DRIVE Best Practices
3
EXTEND Enterprise Wide
4
ADVANCE Performance Management Pervasive Performance Management Cognos Performance Management Platform Continuous Business Alignment
Summary Cognos Planning complement each other and each contributes to a complete Enterprise planning solution and Cognos TM1 TOGETHER they serve all requirements across the enterprise planning, forecasting, analysis and optimization domain
Key Principles Structure and automate the process •
Keep Finance in the driver’s seat
Adopt Best-Practices •
Driver-based planning
• • •
Rolling Forecasts Engage all the right people Forecast frequently
Radiate Beyond Finance •
Synchronize financial and operational plans
Performance Management for Strategy Execution •
Link strategic objectives to the resource allocation process