Ask, Share, Learn Within the Largest Community of Corporate Finance Professionals. Convergence of Business Forecasting and Analytics The New Normal

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1 Sponsor

2 Ask, Share, Learn Within the Largest Community of Corporate Finance Professionals Convergence of Business Forecasting and Analytics The New Normal

3 Learning Objectives After attending this event you will be able to: Recognize the key elements of both CPM and BI systems Describe means for bringing those systems together in a unified platform Identify key benefits of unifying analytics and planning platforms in order to build a business case for establishing a unified CPM and BI

4 Proformative Event Notes The PPT is already posted at the event s landing page. We will send you links via to the presentation and the recording within 24 hrs. For CPE: Answer all polling questions and remain for the duration. CPE Credits awarded in 24 hours. Questions on CPE? cpe@proformative.com. We want to hear from you! Ask questions for the Q&A session at the end of the event. Please take the short survey at the end of the webinar.

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6 Ask, Share, Learn Within the Largest Community of Corporate Finance Professionals Convergence of Business Forecasting and Analytics The New Normal Dr. Vijay Jog, Founder & President, Corporate Renaissance Group Thomas Ironstone, Senior Consultant, Corporate Renaissance Group Scott Jennings, Managing Director BOARD Americas

7 Convergence of Business Forecasting and Analytics The New Normal Agenda What is Corporate Performance Management (CPM)? What is Business Intelligence (BI)? How are CPM and BI interrelated? What are key elements of both CPM and BI systems? How can CPM and BI systems work together in a unified platform? What are key benefits of unifying analytics and planning platforms?

8 Convergence of Business Forecasting and Analytics The New Normal Corporate Performance Management (CPM) CPM is an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise. The Gartner Group

9 Convergence of Business Forecasting and Analytics The New Normal CPM includes the following functional components: Planning / budgeting and forecasting Financial and management reporting Financial consolidation Profitability modelling and optimization (could include predictive analytics) Strategy management

10 Convergence of Business Forecasting and Analytics The New Normal Business Intelligence (BI) BI is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance. The Gartner Group Data visualization tools form a component of BI Next level of BI is predictive analytics

11 Convergence of Business Forecasting and Analytics The New Normal Business Intelligence Technology used to report organization s data Graphically-oriented charts and graphs Drill-down capability VS. Corporate Performance Management Processes used to plan, report, adjust and analyze business data Automation of existing financial processes like budgeting, forecasting, financial consolidation and reporting In many cases, both rely on the same underlying data BI deals with deeper granularity. Ideally CPM should link to and leverage the deeper underlying data.

12 Convergence of Business Forecasting and Analytics The New Normal Linking CPM and BI with Strategy Formulation and Execution CPM / BI Primarily tools to deliver budgeting / forecasting information Do not provide guidance for what to see nor the context They both are relevant only within the context of corporate strategy and planning Strategy provides the context and also leads to identification of KPIs and metrics as well as initiatives and objectives For example: Balanced scorecards and strategy maps

13 One popular framework: Balanced Scorecard (BSC)

14 BSC 2.0: Strategy Maps Decision makers would require a drill down to client type by product type by region for specific actions and understand cause and effect Each enterprise would have a its own version for its success and cause and effect

15 Challenge for a high performing enterprise: Track, monitor and act An enterprise cockpit Strategy and Strategy Maps KPI and metrics arising from levers of success Initiatives and projects arising from the strategic intent Budgets and forecasts To gain insights about expected financial performance (Typically GL view) Multi dimensional insights on geography, business line and functional performance Including drill downs to get deeper insight

16 Ask Yourself: What Do We Know About these Companies? These are: high performing companies run their business through fact based decision making, and have mastered these five boxes. Image sources: company logos are property of their respective company.

17 However we also know. Overwhelming evidence that a majority of enterprises do not perform to their potential Significant efforts are put in designing strategy and in strategy off sites but execution continues to be poor or non existent Enterprises continue to Data Rich and Information Poor (DRIP) Increasing evidence that successful enterprises are highly analytical they know every key facet of their business so that can act in a proactive and urgent manner Successful organizations must be: fact based, single version of the truth

18 Therefore Edict From the Mountain Top I want Information and I want it right now!! And it better be right!!

19 Why is this so difficult? 1. Multiple needs from multiple decision makers Decision makers Board members Needs and wants High level, easily readable insights with drill downs and annotations with information that goes beyond P&L and B.S. Leadership team CFO/Finance Sales and marketing PMO/OSM HR monitor strategy execution through KPIs and metrics and financials Budgeting/forecasting/variance/root causes Deeper insights on sales & GP by: brands, SKU, customers, territory/channel/sales person Projects and Strategy execution Non financial metrics Talent management ALL are using overlapping data and disparate tools to do their job

20 Why is this so difficult? 2. Many processes each with a different focus SUPPORT PROCESSES Corporate Strategic and Business Planning Management Control Corporate Communications CORE PROCESSES Manage Supply Chain Procure material Produce & Dispatch Product Deliver Service Serve Customers Corporate Finance and reporting SUPPORT PROCESSES Information Management and Security Human Resources & Admin

21 Why is this so difficult? 3. Islands of data Operations HR ERP system Social Media Islands of data CRM and ecrm Benchmarks Procurement/ Production Call Center

22 Why is this so difficult? 4. Users with diverse needs: Analytics versus reporting Analytics Analysts 5-10% of users Information Explorers 15-25% of users Reporting Flat or Excel Access to Source Data Data / Information Consumers 65-80% of users

23 Why is this so difficult? 5. Fragmented approaches do not work Strategy Formulation Scorecards Strategy Maps Strategic Planning A strategy tool Control Profitability Analysis Financial Consolidation A consolidation tool A BI tool Execution Reporting Monitoring Analytics Planning What if analysis / Forecasting Resource Capacity Planning Financial Planning A budgeting tool A reporting tool (e.g. SSRS)

24 Why is this so difficult? 6. Multiple systems: Example of A Pulp and Paper Company

25 Example: GM's Enterprise Dashboard Six metrics: Market share Revenues Operating profit Cash flow Quality and Customer support

26 Example: GM's Enterprise Dashboard Required drill down for action: Region Model Competition Dealer Factory Reason code by quality defect Supplier.

27 Hence the Quest to find a Solution Two choices: Work with multiple systems each on its own and then cobble together for individual decision maker Work with a unified platform that combines every aspect of monitoring and tracking available to all decision makers providing them one version of the truth across the enterprise

28 Polling Question

29 The Quest for ALL IN ONE!

30 Management Nirvana Dirty, messy & clumsy data Quantitative and qualitative Data in multiple systems Organize data from multiple sources without duplications and redundancy Conduct modeling Budgeting and forecasting BI Predictive analytics Strategy maps.. Reports Charts / graphs Briefing books. Quest for a single platform Appreciate, explain (annotate) exception based alerts User self service: push versus pull Collaborate & communicate

31 What should this unified platform deliver? And what would it look like?

32 Today All in One BI & CPM BI & CPM are disconnected, decision making processes are fragmented Financial Budget Capacity Planning Financial Consolidation Reporting Sales Budgeting Scorecards Dashboard Profitability Analysis DWH ERP CRM SFA

33 Self-Service Analysis KPIs, Scorecards, Dashboards Predictive Analytics Planning and Simulation Web, Client, Mobile Satisfy multiple needs with a user driven experience integrated with the existing platforms (e.g. MS Office and outlook) Provide historical insights coupled with predictive analytics Office Integration Data federation Allocation, Consolidation, Simulation Alerting and Broadcasting Workflow

34 Strategic, Operational, Analytical: Automate Dashboards, Charts, KPIs Business Intelligence / Reporting

35 Design dashboards to drive action Business Intelligence / Reporting

36 Automate Management Reporting Integrated P&L, Balance Sheet and Cash Flow Business Intelligence / Reporting

37 Automate Management Reporting Integrated P&L, Balance Sheet and Cash Flow Business Intelligence / Reporting

38 Interactive SMT and Board Meetings Executive / Board Briefing Books Ensures that each meeting results in a focused actionable discussion on key metrics Business Intelligence & Reporting

39 Allow for Driver Based Planning PRODUCT UNIT PRICES AND COSTS Make it meaningful Employee Drivers (Grades and Payroll Drivers) Capital Expenditure Assumptions Understanding Controllable vs. Uncontrollable Performance Management

40 Challenge what you know Scenarios and Simulations Leverage the single BI & CPM environment to test your hypotheses and challenge your assumptions to see the impact on the business Select the scenario / version to save latest information to compare results between different scenarios and versions as required Performance Management

41 Deal with a dynamic world: Reforecast The world is evolving and so should your budget Provide an environment where reforecasting is a manageable activity. Performance Management

42 Align Processes and Workflow Clear and transparent Performance Management

43 Prepare for the future Predictive Analytics Forecasting / Predictive Analytics Variety of statistical and data mining techniques that analyze current and historical facts to make predictions about future Clustering Combination of multivariate analysis techniques aimed at grouping a set of objects in such a way that objects in the same group (called a cluster) are more similar (in some sense or another) to each other than to those in other groups (clusters). Predictive Analytics

44 Accessibility workstation web browser spreadsheets company portal... tablets User Freedom

45 Collaborate, Support with Explanations text, comments, documents Administration

46 Convergence of Business Forecasting and Analytics The New Normal Data exploration & predictive analytics Dashboarding One Platform a Budgeting, planning and forecasting Financial Consolidation Management Nirvana Reporting Profitability modeling & optimization Analysis & simulation Strategy management

47 Benefits: Convergence of Business Forecasting and Analytics The New Normal Many benefits Same underlying data layer Independent of multiple systems all can be linked Same platform for all key decisions Ease of learning and creating internal COEs Ease of collaboration Satisfy both report consumers and business analysts Highly cost effective and efficient Single version of the truth irrespective of the DM

48 Thank You

49 Polling Question

50 Q & A

51 A Few Final Items Join us at to continue the conversation with your peers in our community If you want an introduction to today s speakers or sponsor, or want to know more about Proformative Academy, tell us on the survey! Thanks to our speakers

52 Sponsor

53 Polling Question