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Beyond Spreadsheets: How to Take Your Budgeting and Planning to the Next Level

© 2013 Proformative. Proprietary and confidential

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Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Beyond Spreadsheets: How to Take Your Budgeting and Planning to the Next Level

Your Speakers

Paul TurnerSenior Director

6 Best Practices for FP&A

Rick SmithManager, FP&A

FP&A atEngine Yard

Brian Cauley Solutions Specialist

Tech Demo

Role of Finance – Where Are You?

TransactionManagement

Annual budgeting

Financial accounting

Controlling the Business

Variance reporting

Tax, audit, treasury

Planning & Analysis

Rolling forecasts Performance

management Analysis of drivers

Integrated Functional Excellence

Enterprise-wide collaboration Empowering business units to

self serve analysis Predictive, ‘what if’ planning

AccountantsDominated by complex systems and detail

1

Process ManagersFocus on improved reporting and minimizing risk

2

Business PartnersDecision support

Provides sound financial analysis

3

Business LeadersIntegral part of management

Creates value by providing information and analysis for operating and strategic decisions

4

Stage

Key Capabilities

Expectations have increased for finance organizations

Best Practice #1Use Rolling Forecasts

1) Monthly 19%2) Quarterly 33%3) Bi-Annually 21%4) Annually 28%

How frequently are you forecasting?

Based on 2012 survey by Adaptive Planning

64% of annual targets are obsolete

in 4-6 months

Beyond Budgeting Roundtable

Plan should NEVER be out of date Frequently import actuals and plan

with drivers to re-forecast quickly Get everyone on the same sheet of music

– integrated actuals & forecasts

Rolling Forecasts

Best Practice #2Automate KPIs, Dashboards, Scorecards

1) 1-2 Days 9%2) 2-5 Days 9%3) 5-10 Days

15%4) More than 10 Days

11%5) Not Producing

57%

How long after close do you publish KPIs, dashboards?

Based on 2012 survey by Adaptive Planning

The Importance of the Right Metrics

The Gartner Business Value Model: A Framework for Measuring Business Performance, March 2013

Traditional accounting measures, e.g., net profit, are only part of the picture when it comes to understanding business performance.

Measurement Gap Between Accounting Measures and Real Business Value

Best Practice #3Linked and Driver-Based Plans

Operations’ Plans Affect One Another

Corporate Financial

Plan

SalesPipeline

Forecasts

ManufProduction

Plans

LogisticsInbound & Outbound Shipments

HRWorkforce Planning

MarketingLead

Generation

Customize Models for Different Operations

What: Provide your operations managers with customized models Why: One size does not fit all

– Sales is different from IT, which is different from Facilities How: Start with one function, e.g., Sales, as a prototype

– Make sure you understand their business before you build the model– Integrate data from their key systems, e.g., Salesforce– Involve them from the beginning, or else– Make sure it’s something that benefits them, not just you

Link and align models

Foster ownership by the operations team

Best Practice #4Drive Enterprise-Wide Collaboration

1) Yes 46%2) No 54%

Do at least 50% of managers with spending

authority participate?

Based on 2012 survey by CFO Research/CFO.com

Company Collaboration Characteristics

Best-in-Class

Average

Laggards

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Managers Accountable for Budget Accuracy Enterprise-Wide Collaboration

Financial Planning, Budgeting, and Forecasting in the New Economy

Best Practice #5Enable Self-Service, On-Demand Culture

Now Desired1) Request finance 83%

22%2) Self-serve apps 17%

78%

How is data accessed by your employees?

Based on survey by Amanino Mckenna

Best Practice #6Reconsider Spreadsheets

More than 90% of spreadsheets contain serious errors, while more than 90% of spreadsheet users are

convinced that their models are error-free ”

“

The Journey into

2,000customers

400+partners

90%growth

100countries

#1 share

#5 Fast 500

Our cloud business analytics platform empowers management teams to transform their planning, reporting, consolidations

and analysis–improving productivity, costs & decisions.

The Leader in Cloud Business Analytics

Revolutionizing Business Management with aComplete, Integrated Product Suite

ADAPTIVE PLATFORMMODELING | COLLABORATION | ANALYTICS

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INTEGRATED SUITE

2,000 Customers Worldwide

Manufacturing Healthcare Non-Profit/Edu

OtherConsumer

Software

Financial Services Media

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

FP&A at Engine YardRick Smith, Manager, FP&A

© 2013 Proformative. Proprietary and confidential

Introduction

© 2013 Proformative. Proprietary and confidential 27

• Leading Platform as a Service (PaaS)– Empower developers to plan, build, deploy and manage

applications in the cloud

• High growth business with pay-as-you-go and subscription based solutions

• Thousands of customers around the globe– Explosive-growth Web 2.0 Startups– Fortune 500 enterprises

• Headquartered in San Francisco

SaaS

PaaS

IaaS

Applications- End-User Software

Development Platform

- Build, Deploy, ManageInfra-Structure

- Data Centers- Hardware

- Operating System

Circa 2011 FP&A

© 2013 Proformative. Proprietary and confidential 28

• Spreadsheet based– Workforce planning for each department– Spreadsheet for departmental expense planning– Limited revenue forecasting and planning

• All rolled up into spreadsheet “mothership”

• Limited audit trail to stand behind plan

Moved to Adaptive Planning

© 2013 Proformative. Proprietary and confidential 29

• Completed budget in Excel

• Loaded into Adaptive Planning for 2012– Immediately found issues in Excel based process

• Immediately came out with an updated plans

• Moved planning processes to cloud:– Workforce planning– Capital budgeting– Departmental expense budgeting– Planning around cash outflows

De-Centralized ProcessEnabling Managers to Engage

© 2013 Proformative. Proprietary and confidential 30

• Enable managers to see timely actuals integrated into plan

• Tightly customize view for who’s budgeting– Much easier versus spreadsheets– Comments and share

• Used Adaptive Planning to make process easier for managers than using spreadsheets:– More collaborative – sharing and centralizing comments– More customized to each department– More up-to-date actuals

Next Steps

© 2013 Proformative. Proprietary and confidential 31

• Creating rolling 4 quarter forecast

• Expanding to use analytics– Central hub for reporting:– Customer growth– Free trial activity and usage– LTV, churn, retention– Average invoices

… to somethinglike this …

Best Practices

© 2013 Proformative. Proprietary and confidential 32

• Drive collaboration

• Quickly revise.

• Plans always change!

• Model flexibility is key

• Make it easy for businessto change, not require IT

Demonstration

© 2013 Proformative. Proprietary and confidential

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© 2013 Proformative. Proprietary and confidential 35