Business Planning made easy
The need for timely, dead-on financial information has never been greater with so many companies announcing lower-than-expected earnings lately
25 June 2001, 2 pm GMT
How can organizations begin setting realistic performance goals?
David Blansfield, Publisher, Business Finance, recently hosted a discussion about the growing need for all companies to forecast and plan accurately.
Today, he said, companies that perform well but forecast poorly and cannot provide guidance on future performance are penalized and cannot compete in today’s changing economy.
Traditional planning processes are outdated because they cannot effectively respond to the changing market conditions.
When the outcome is obsolete before the process is complete the predictive value is very limited.
Other commonly observed issues are that planning is complex, time consuming and inconsistent from year to year.
Steve McMinn from Accenture agrees that in order for planning to deliver real value, fundamental changes are required to the planning process.
"Because managing finances in real time is essential, the new models integrate financial, operational and capital planning, target setting, budgeting, forecasting, and performance management models into a single process. The Planning cycle should be linked through the use of top-down target setting and bottom-up budgeting and forecasting. In this way, targets are aligned with corporate strategy, high-level target setting is driven down by Corporate and target ownership resides with those responsible for execution" he suggests.
Mark Stimpson, Product Marketing Director, Adaytum, business planning software providers, believes that predictability is the key driver for a planning solution.Not only does a world-class planning process planning require better integrative planning models and top-down bottom-up reconciliation, he says, but also driver-based planning, assumptions capture and reporting that links high-level and low-level metrics.
"It is necessary to plan realistically and execute correctly to avoid disasters" Stimpson suggests "The Planning Process must provide an early warning system, offer Planning Intelligence and perform interactive modelling. Advanced planning software solutions, like Adaytum, are designed to support such sophisticated intelligent processes"
Stefan Sarazen, Director of Financial Planning, ADP explained how Canada’s leading provider of Employer Services had to rethink its planning process due to an explosive growth and increased complexity of operations.
"Previously we consolidated 250 cost centres and 1,600 associates using an Excel model and wasted valuable time on consolidation rather than analysis. ADP searched for a solution with superior functionality to reduce the risks associated with Excel model with ease of use to facilitate adoption. The choice was Adaytum e.Planning. The implementation and training were completed in fewer than eight weeks and the software can integrate with other financial systems such as Oracle, Essbase. The solution enabled ADP to focus on value-added analysis rather than the mechanics of consolidation.
In a climate of global business operations and increasing market volatility, it is important for businesses to be able to accurately predict strategic direction and routes and ensure that the figures support the vision. Missing numbers is now an issue of company survival.
Global, collaborative planning can enable organisations to collate real-time financial information as and when it is generated, and assess each individual sale’s impact on the overall company position.
Responsibility for financial reporting is held by each individual making sales, and a simple process provided to ensure that reporting figures becomes a help to their own job effort, rather than a quarterly or annual chore. Most importantly, every single step along the sales process must be loggable to be directly related to the business bottom line.
www.adaytum.com
www.accenture.com
www.adp.ca
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