Ažuran finansijski plan – šta ako... ?

Accurate Financial Plan – what if... ?

Bora Janković Sales Leader South East Europe

IBM Business Analytics

„ If you don‘t know where

you are going, it doesn‘t matter which way you go.“ Lewis Caroll, Alice im Wunderland

Realized Potential

• Low value activities

• Limited relevance, frequency

and participation

• Poor insight into causality

• Weak, delayed coordination

Source: CFO Executive Board 2011; IBM Analysis

30% of performance potential is lost due to

subpar performance management

Performance potential squandered by poor practices

HR

Technology foundation under pressure

CRM

ERP

G/L

DW

“For 55 percent of

companies, their budget

assumptions are useless by

three months into the new

year.”

Feb

2012

Budget

approved

Speed and agility do not match the marketplace volatility

Dec

Forecast Forecast Forecast

June

Source: APQC

2013 Budget

Plans/ Budgets detail how you

think the future should look

Forecasts describe what the future

will most likely look like

The traditional template?

The traditional approach...

J F M A M J J A S O N D

The ‚W

all‘

Critical Best Practices for the Planning & Forecasting

Participation Modeling

Who creates the Budget/Plan and Forecast?

High participation creates value.

Sales

Marketing

HR

And let’s not forget!

Accountability

Transparency

Remember this model?

Can we answer critical questions with this information?

o Risk?

o Opportunities?

o Customers?

„Simplicity is the ultimate

sophistication.“ Leonardo da Vinci

A simple test for selecting the right items

The same applies to your time horizon

Do YOU forecast and plan like this?

Aug Sep Oct Nov Dec FULL YEAR

Food - Restaurants

Food - Fast Food

Food - Discount Super Market

Food - Supermarket

Food - Corner Store

Food - Bakery

Travel - Airplane

Travel - Car

Travel - Railway

Travel - Hotel

Travel - Fees

Travel - Tips

Probably not......you think about events & intiatives

Think about initiatives

List potential tactics

Screen the most

promising

Watch for infeasibilities

Benchmark to identify

opportunities

The language of our forecasts need to change

634172 – Revenue (New Accts)

665891 – Office Supplies (Paper)

665892 – Office Supplies (Pens)

677199 – Gifts, Misc.

VS.

Opportunities

Pipeline

Number of employees

Customer Satisfaction

Drivers in hotel chain

Customer Example: Use of drivers

• Guestnight

• Average spend F&B

Revenue F&B

• Revenue F&B

• CoS % F&B

Cost of Sales F&B

EXECUTIVE MANAGE-

MENT MARKETING

PRODUCTION AND

DISTRIBUTION PURCHASING

TECHNOLOGY IT/R&D

CUSTOMER SERVICE

MARKETING SALES SALES

FINANCE FINANCE

EXECUTIVE MANAGE-

MENT MARKETING

PRODUCTION AND

DISTRIBUTION PURCHASING

HUMAN RESOURCES

HUMAN RESOURCES

TECHNOLOGY IT/R&D

CUSTOMER SERVICE

SALES

FINANCE

Enterprise Planning: A Distinctive IBM Advantage

IBM Strength

Plan based on business drivers

Easily implement Rolling Forecasts

Connect financial and operational planning

Connect plans to strategic goals

Address both high participation and deeply

analytic planning

Real-time scenario modeling/ sandboxing

Leverage best practices - over 75

performance blueprints to accelerate

success

Business Drivers

Close,

Consolidate,

Report, File

Analyze &

Optimize

Plan, Forecast,

and Control

Financial Performance and Strategy Management

FINANCE

SCENARIO MODELING (WHAT-IF ANALYSIS)

Business Problem for What If Analysis - Unable to accurately evaluate and identify the

business and profitability impact of alternate business scenarios

* Office of Finance - We have not met revenue targets, what if we lowered forecasted costs

across different groups? What adverse impact, if any, will this have on revenue and how

much closer will this get us to our expected margins?

* Sales and Marketing - By what percentage does marketing need to increase sales pipeline

over the next 2 months to meet our end of fiscal license revenue?

* Operations - What if our labor and distribution costs continue to increase by 10% over the

next year, how does this impact our operating and production costs?

* HR - What if we reduce our headcount by 10%, would this lower our human capital costs to

the desired level?

What-if Analysis: Benefits/Value proposition

Critical Best Practices for the Planning & Forecasting

Participation Modeling

Recommended reading

„Beyond Budgeting“

Jeremy Hope &

Robin Fraser

„Best Practices in Planning and

Performance Management“

David Axson

„Future Ready“

Steve Morlidge &

Steve Player