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Perficient joined Del Monte Corporation for this webcast about how you can achieve greater operational visibility and financial gains by extending IBM Cognos TM1 beyond financial planning and analysis, to operational planning. Using recent examples from Del Monte, we show you how you can improve planning decisions, make more effective use of planner time and realize significant financial gains.
Citation preview
ACHIEVING OPERATIONAL VISIBILITY & FINANCIAL
GAINS
Speakers
2
Erik Duffield
Director, Finance
Analytics
303-629-9206
Mark Hatting
Director, Pacific Delivery
Practice
408-973-8004
Juan-Carlos Bertini
Vice President
Financial Planning
& Analysis
Agenda
3
Erik Duffield
Understanding & Adapting to the changing
role of Finance
Juan-Carlos Bertini / Mark Hatting
Operational Visibility & Financial Gains
at Del Monte
Q&A
Perficient Profile
Ideally positioned as the GO TO Partner for IBM
An IBM “5-Star Premier” Business Partner since 1997
SVP, SVI and VAP Authorized Reseller across all Brands in U.S.
Healthcare and Retail Industry Authorized Solution provider
IBM Lab Services (ISSL, ISSW and ISSIM) go-to market partner
IBM Education Authorized Training Partner/ATP and Training reseller
Thriving and Growing Organically and via Acquisition
Public, NASDAQ: PRFT
1700 Colleagues
$250 M 2011 Revenue Run Rate
Local Sales/Delivery offices
Offshore Development Center in Hangzhou China
IBM Recognition
IOD Solution Provider of the Year – 2011
Lotus Most Distinguished Partner – 2006, 2008, 2011
2010 IOD Industry Warehouse Pack Partner of the Year
2010 Impact Smarter Decision Management Award Winner
2010 Lotusphere Best WebSphere Portal Solution – Finalist
Role of Finance is Changing
Transaction processing requirements decreasing
More powerful analytical tools
Fewer people
Embedded teams
6
Strategic Analysis Strategic Planning
Annual Plans / Forecasts
Managerial Analysis
Financial Analysis
Controls, Consolidations
& Reporting
External analysis of markets and competitors Internal review of competencies and capabilities Assessments of customers and products
3-5 year view of the business Models and tests “big blocks” – people, capital, products, M&A Primarily a high level financial view Scenario / sensitivity tested
Puts next years strategic initiatives into action The allocation of fiscal and human resources aligned to key initiatives and goals Aligned with business via collaboration
Application of financial & operational data to inform and direct business decisions Maintains focus on key initiatives to keep alignment Develops best practices and a true analysis competency
Treasury / Cash Mgmt Capital Structures / Financing Risk Mgmt / Scenario Planning Investment ID & Analysis Portfolio Mgmt
Close, Consolidation, Report Compliance, Internal Audit
Domain of modern finance
Planning: evolution demonstrated
7
financial
planning
forecast-based
planning
externally
oriented
planning
strategic
management
•Annual budgeting
process
• Internally focused
•Forecasts revenue,
costs, capital for the year
•Used to benchmark
performance
•Strategies are often
implicit or opportunistic
•Starts our as financial
planning with a longer
time horizon
•Out year extrapolations
become unreliable
•Tendency to try more
sophisticated forecasting
tools: trend analysis,
regression models,
simulation models
• Grow frustrated with
these extrapolations too
•Realization that charting
the future is failing, move
to “issues orientation”
•Extending “issue
orientation”
•Competency in internal
planning
•Focus moved to “outside
world” (customers,
competitors, suppliers)
Characteristics
•Resource allocation is
dynamic
•Plans are adaptive vs.
deterministic. Find new
ways, new markets
•Surprise strategies, less
linear
•Often recommend
multiple course of action
• Melding strategic
planning and everyday
mgmt into a single,
seamless process
•Not necessarily more
sophisticated but more
integrated with
operational decision
making
Attributes
•Framework defined by
future strategic issues
rather than today’s org
structure
•Strategic thinking
capabilities are
widespread and
rewarded
•Series of feedback loops
vs. sequence of plan
submissions
most
many
few elite
Running the analytics that run the business
8
Analytic
$
Embedded in
business functions
Business Visibility & Financial Gains at Del Monte
Mark Hatting, Perficient
Juan Carlos Bertini, Del Monte Foods
Consumer Products
~51% Pet
Products ~49%
The Company: Diversified Portfolio of Pet and Consumer Products
Net Sales by Segment
Adjusted EBITDA by Segment
Consumer Products
~35%
Pet Products
~65%
10
Background: Economic Trends and Volatility
11
$(100)
$(50)
$-
$50
$100
$150
$200
$250
$300
$350
F05 F06 F07 F08 F09 F10 F11 F12
Net Cost Increases/(Decreases) ($M)
Gross Cost Increases/(Decreases) ($M)
Risk !
Inflation ↑
Data Overload
Uncertainty ?
FP&A
Opportunity: Analytics, Insights to drive bottom line
12
40% 60% ……….Business partner
80% 20% Transaction focus…………
reconcile
version control
formula error
mistake
“all we do is forecast”
…out of time
lack of visibility
vacuum
silos
inaccurate
data overload
productivity
insights
intelligence
passion career growth
platform integrated
engaged
retention
business drivers
Deliverable: A Planning & Analysis Platform for Operations
• Driver Based
• Integrated
• Scenario Capable
13
• Improved visibility
• Reduced planning cycle times
• Better resource utilization
WH
AT
CA
PA
BIL
ITIE
S
WH
Y?
Gathering
Processing
Limited Late Insights
Knowledge
Data
Focus
Val
ue
Deliverable: A Planning & Analysis Platform for Operations
• Driver Based
• Integrated
• Scenario Capable
14
• Improved visibility
• Reduced planning cycle times
• Better resource utilization
WH
AT
CA
PA
BIL
ITIE
S
WH
Y?
Improved and
Insightful Decision
Making Process
Gathering
Processing
Limited Late Insights
Knowledge
Data
Focus
Val
ue
Insights
Knowledge
Data Integration Consolidation
Analytics SME’s Power-Users
Strategic Profit-Maximizing
Deliverable: A Planning & Analysis Platform for Operations
• Driver Based
• Integrated
• Scenario Capable
15
• Improved visibility
• Reduced planning cycle times
• Better resource utilization
WH
AT
CA
PA
BIL
ITIE
S
WH
Y?
Improved and
Insightful Decision
Making Process
Maximize Profits
Gathering
Processing
Limited Late Insights
Knowledge
Data
Focus
Val
ue
Insights
Knowledge
Data Integration Consolidation
Analytics SME’s Power-Users
Strategic Profit-Maximizing
A Planning & Analysis Platform for Operations
16
Buy
•Corn
•Wheat
•Resins
•Linerboard
Make
•Sourcing
•Yields
•Overheads
•Labor
Deploy
Deliver
•Mode
•Lane / Miles
•Utilization
•Fuel
Store
•Location
•Efficiencies
•Overheads
•Labor
Inventory Management
Driv
ers
Volume Forecasting
Highlights….. Transportation
17
• Seamless Reporting
• Mode Optimization
• Granularity
oProduct
oMode
oLane
Highlights….. Materials Planning and Hedging
18
• BOM integration
• Scenario Control
• Hedging Support
o Cross Hedges
o Open vs. Covered
Highlights….. Transportation Miles, Weights by “Lane”
19
• Granularity
oLane
oMiles
oWeights
oProduct
• Deployment Planning
• Supply Planning
• Inventory Analysis
Highlights….. Scorecards
20
• Sourcing Analysis
• Spend and Productivity Scorecards
Key Learnings
• IT & Business owner roles – Who has the “keys”
– Self Service vs. Control
• SME involvement – Transfer the vision
• Power users – Adoption
– Maintain and Enhance
• Picking the partner – Knowledge / Demonstrated Ability
– Continuity
21
• Sponsorship
– Project support
– Guiding vision
• Picking the tool
– Compatibility (ERP/Systems)
• Prototype
– Iterative development
– Phased approach
– Scope
• Commitment to success
Conclusion
22
Erik Duffield
Director, Finance
Analytics
303-629-9206
Mark Hatting
Director, Pacific Delivery
Practice
408-973-8004
www.slideshare.net/PerficientInc
www.facebook.com/Perficient
www.perficient.com/Thought-Leadership/Social-Media/Blogs
Juan-Carlos Bertini
Vice President
Financial Planning
& Analysis