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Financial Consolidations,Planning and Reporting Optimization

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The presentation content focuses on current and emerging trends in the technology available to ease the enormous challenges posed in effectively and accurately consolidating company financial results …

The presentation content focuses on current and emerging trends in the technology available to ease the enormous challenges posed in effectively and accurately consolidating company financial results across business units and borders, and budgeting/forecasting for these entities. Is your current accounting/ERP system right for your company? Can you current systems support the growth of your company? What are the alternatives available to you? Insights in addressing these questions are from seasoned practitioners and experts on global financial consolidations and ERP and reporting systems designed specifically to meet the needs of companies that operate across borders.

Published in: Economy & Finance, Business

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  • 1. Event Sponsor © 2011 Proformative. Proprietary and confidential
  • 2. Welcome to ProformativeProformative is the largest and fastest growing online resource forsenior level corporate finance, treasury, and accounting professionals.An ad-free, noise-free community of more than 400,000 CFOs,Controllers, Treasurers and related professionalsA resource where corporate finance and related professionals excel intheir careers through: Uniquely valuable, online Peer Network Direct subject-matter-expert advice Valuable Features and ResourcesAll of it completely free and noise-freeCheck it out at www.proformative.com © 2011 Proformative. Proprietary and confidential
  • 3. Learning ObjectivesAfter participating in this event you will be able to:• Define how to successfully expand your accounting and financial reporting tocover your growing business• Associate tools, services and options for managing accounting and FP&A for yourmulti-entity, global company• Define how your systems and operations directly effect profitability and outcomesfor your global company• Hear success stories from finance and accounting executives who took theirglobal organizations to new heights in effectiveness and ROI © 2011 Proformative. Proprietary and confidential
  • 4. THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALSGlobal Business ManagementAccelerating Financial Consolidation and Achieving Transparency Paul Turner Senior Director, NetSuite
  • 5. Supporting Today’s Global Business1 Your customers and employees are spread around the globe2 Complex currency translation and revaluation3 Large #’s of intercompany and minority interest eliminations4 Complex local tax compliance (Sales Tax, GST/PST, VAT, etc.)5 Increasing need for audit trail6 Scant local IT resources © 2011 Proformative. Proprietary and confidential
  • 6. Substantial Local and Global Change Greater need for New Revenue business Recognition Models visibility Local sales tax Shrinking IT changes resources Geographical Launching new regulatory subs and geos change New billing Mergers and models acquisitions © 2011 Proformative. Proprietary and confidential
  • 7. Multiple Systems Strain Finance Resources Worldwide HQGLOBAL AMERICAS EMEA APACREGIONCOUNTRY Canada USA Brazil France UK Germany Japan Australia China © 2011 Proformative. Proprietary and confidential
  • 8. What It Means: Lengthy cycle to roll up financial results from subsidiaries Lack of visibility into subsidiary’s financials Lack of confidence in financial data for corp and subs Error-prone, inefficient, time-consuming manual processes “Siloed” meaning no 360° view of corporate performance Onerous local accounting, tax and compliance requirements Error prone managing currency exchange rates with historical accuracy © 2011 Proformative. Proprietary and confidential
  • 9. Visibility is the Missing Link in Today’s ERP © 2011 Proformative. Proprietary and confidential
  • 10. NetSuite’s Global Business Environment Publicly traded on New York Stock Exchange (“NYSE”) $190M+ revenues; 10,000+ orgs in 20+ countries 1,300+ employees with offices in 9 countries 10+ subsidiaries (not all are cost centers) 1,500+ orders processed a month Operations staffed internationally Majority of finance/accounting resources outside US © 2011 Proformative. Proprietary and confidential
  • 11. How NetSuite Runs Its Global Business Manage the Entire Business in the Cloud Lead => Estimate => Sales Order => Billing => Financial Reporting Single System, Single Database No data warehouse All 1,300+ employees log into the same system Access to information from any location - only limited by role Real-Time Consolidated Data Full drill-down => from financial statements to individual tx’s Multi-Dimensional Consolidation Worldwide, Regional and Country views Local Control, Global Roll-up Localized UI and currency Regional and global visibility in-context11 © 2011 Proformative. Proprietary and confidential
  • 12. Global Cloud ERP: One Shared Data Source Worldwide HQ ECOMMERCE SINGLE CRM+ DATA SOURCE FINANCIALS AMERICAS EMEA APAC
  • 13. The Secret for an EfficientConsolidation Process Real time financial consolidation and transparency Easy web access to all parent and subsidiary data Multidimensional reporting - worldwide, regional, country Country specific financial and regulatory compliance Calculation and payment of local taxes in the local currency Single chart of accounts or custom per subsidiary Intercompany journal entries posted from a single screen Automate cumulative translation adjustments Ability to drill down to each account for audit Automate period end revaluation Simplified accounting close process and complete audit trail © 2011 Proformative. Proprietary and confidential
  • 14. Cloud Apps Make GlobalBusiness Management Easier Mobility Distributed workforce, outsourcing, contingent workers, any device Self-Service Submit web based time and expenses and purchase requests via the web Self-serve customers, vendors, partners Visibility Real-time role based dashboards, Self-service reporting and analytics Personalized © 2011 Proformative. Proprietary and confidential
  • 15. Reporting from a Global View…. © 2011 Proformative. Proprietary and confidential
  • 16. Reporting the Subsidiary Perspective… © 2011 Proformative. Proprietary and confidential
  • 17. Improved Reporting: At the Customer Level © 2011 Proformative. Proprietary and confidential
  • 18. Cloud Playing an IncreasingRole in ERP Deployments…….
  • 19. For Example…. Fastest Growing Company in History• Launched 2008• 7,000+ employees• 20m+ Groupons sold• 45+ countries• 500+ cities• +1 country every 3 weeks © 2011 Proformative. Proprietary and confidential
  • 20. Challenges  Managing hyper growth  Great Plains & Sage  Non-integrated  Data integrity  Spreadsheets  Manual process © 2011 Proformative. Proprietary and confidential
  • 21. Project Goals 49 countries 12 months 100% cloud One system © 2011 Proformative. Proprietary and confidential
  • 22. Global ERP at “Groupon Speed”5 Countries in 6 Weeks, 26 Countries in 3 Months,49 Countries by Year End 2011 Australia Emirates Hong Kong Korea Argentina India Netherlands Chile Malaysia New Zealand Colombia Philippines Thailand Mexico Singapore Israel Peru Taiwan South Africa Uruguay Austria Turkey Japan Switzerland © 2011 Proformative. Proprietary and confidential
  • 23. Results Foundation for Groupon velocity Instant financial consolidation Multi-currency, multi-language, multi-tax Eliminated spreadsheets Self service reporting Resources on growth, not operations © 2011 Proformative. Proprietary and confidential
  • 24. Is Cloud Right for You?Viability + Customization is Key © 2011 Proformative. Proprietary and confidential
  • 25. Cloud Global Business ManagementCan Transform Finance PerformanceGlobal Cloud ERP enables you to: Stay abreast of latest accounting changes Scale a distributed finance organization Achieve real time consolidation and detailed visibility Ensure subsidiary customization and control Grow without local IT resources Reallocate IT budget from maintenance to innovation25 © 2011 Proformative. Proprietary and confidential
  • 26. Thank You© 2011 Proformative. Proprietary and confidential
  • 27. Polling Question© 2011 Proformative. Proprietary and confidential
  • 28. THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALSPlanning and Reporting Best PracticesTracy SchreiberDirector, Product MarketingAdaptive Planning
  • 29. Agenda• Expectations of Today’s CFO and Finance• What You Need to Get There• Planning and Reporting Best Practices• Technology © 2011 Proformative. Proprietary and confidential
  • 30. Finance Organization Vision • Integral part of management Expectations have increased for team to support value/wealth Finance organizations • Focused on decision creation support • Identifies opportunities and • Provides sound provides critical information and financial analysis to analysis to make superior management for operating and strategic making financial and decisions • Focused on operating decisions process and risk • Dominated by minimization reporting and compliance functionsStage Transaction Controlling the Planning & Integrated Functional 1 Management 2 Business 3 Analysis 4 ExcellenceRole Bean Counters Process Managers Business Partners Value Managers • Financial • Management reporting • Performance • Superior decision supportKey Capabilities accounting management to invest wisely • Tax • Audit • Analysis • Business Development • Treasury • Enterprise risk managementChallenge Number of Consistent process Talent and insight Leadership and transactions excellence into valuable drivers performance management © 2011 Proformative. Proprietary and confidential Source: McKinsey & Company
  • 31. CFO Leadership & Higher Performance Management Maturity Stage 4: Integrated Functional ExcellenceLeadership Stage 3: Planning & Analysis Stage 2: Process Managers Stage 1: Bean Counters Lower Lower Performance Management Maturity Higher © 2011 Proformative. Proprietary and confidential
  • 32. Obstacles – Does This Sound Familiar?1. Managers deluged with data, metrics and reports that provide little value – can’t see the forest for the trees2. Wasted time, managing to budgets and reports instead of managing business – this has huge cost3. Or, no participation from managers at all – lost opportunity4. Poor service to business managers from finance – managers don’t get the information they need, when they need it5. Ineffective use of technology – spreadsheets © 2011 Proformative. Proprietary and confidential
  • 33. Corporate Performance Management (CPM) • Best Practices Integrated • Supported by the right Performance Management technology Continuous Cycle © 2011 Proformative. Proprietary and confidential
  • 34. The Right Technology• Not Spreadsheets – Inefficient – Error-Prone – Inefficient – Prevent adoption of best practices• Not Large On-Premise CPM Applications – Expensive – Complex – Long deployment time – Huge IT involvement © 2011 Proformative. Proprietary and confidential
  • 35. Cloud-Based SaaS is Mainstream for Business Worldwide SaaS Market Growth 2007-2012 CAGR On-Premise SaaS ERP, SCM, HCM, CRM, PLM ERP, SCM, HCM, CRM, PLM Source: AMR Research“SaaS is now commonplace and having a very real impact on IT. Users should not wait but should explore cloud and SaaS opportunities from new vendors.” Gartner© 2011 Proformative. Proprietary and confidential
  • 36. SaaS Delivers Significant Advantages On-Premise Model Cloud-Based Model High upfront cost  Low annual subscriptions Need new HW and SW  Does not need new HW or SW Implement in months/years  Implement in weeks IT support needed (initial & ongoing)  No IT involvement required High risk: big upfront purchase  Low risk: can cancel at any time High overall TCO  Low overall TCO New releases every 1 – 2 years  New releases 4x per year Time consuming, costly upgrades  Automatic, disruption-free upgrades Designed for techie users  Designed for business users Difficult to try before buying  Immediate trial – try before you buy © 2011 Proformative. Proprietary and confidential
  • 37. Purpose-Built Planning & Reporting Application Allow Finance to build better plans and make room for higher-value work than formatting and troubleshooting spreadsheets• Driver-based and assumption-based planning• Integrated financial statements• Automated workflow & audit trail• Automated consolidation, across worldwide entities & currencies• Centralized database with tight integration with other enterprise systems• Version control• Reports, dashboards, KPIs, scorecards with real-time data• Easy to use; no programming skills required Provide true value to managers, elevate value of Finance, lighten reporting load for the entire organization © 2011 Proformative. Proprietary and confidential
  • 38. CPM Best Practices 1. Deliver timely and accurate dashboards, KPIs and reports 2. Re-forecast frequently 3. Create driver-based plans 4. Perform what-if analysis 5. Drive enterprise-wide collaboration© 2011 Proformative. Proprietary and confidential
  • 39. Finance Organization Vision • Integral part of management Expectations have increased for team to support value/wealth Finance organizations • Focused on decision creation support • Identifies opportunities and • Provides sound provides critical information and financial analysis to analysis to make superior management for operating and strategic making financial and decisions • Focused on operating decisions process and risk • Dominated by minimization reporting and compliance functionsStage Transaction Controlling the Planning & Integrated Functional 1 Management 2 Business 3 Analysis 4 ExcellenceRole Bean Counters Process Managers Business Partners Value ManagersKey Capabilities • Financial • Management reporting • Performance • Superior decision support accounting • Tax management to invest wisely • Audit • Analysis • Business Development • Treasury • Enterprise risk managementChallenge Number of Consistent process Talent and insight Leadership and transactions excellence into valuable drivers performance management © 2011 Proformative. Proprietary and confidential Source: McKinsey & Company
  • 40. CPM Best Practicesto Improve Processes and Reporting 1. Deliver timely and accurate dashboards, KPIs and reports 2. Re-forecast frequently 3. Create driver-based plans 4. Perform what-if analysis 5. Drive enterprise-wide collaboration © 2011 Proformative. Proprietary and confidential
  • 41. Best Practice #1:Timely and Accurate Dashboards, KPIs & Reports • Integrate actual data from other enterprise applications (or just your GL) • Import data easily and frequently • Use drag-and-drop report builder to create variance reports, month-end management and board packs • Give managers dashboards to analyze results Make budget managers more autonomous and efficient with self-service reporting tools, and free finance for higher-value added activities © 2011 Proformative. Proprietary and confidential
  • 42. CFO Leadership & Performance Management Maturity Stage 3: Business Partners Higher – Planning & analysis – Focused on decision support; provide sound financial analysis to management – Capabilities include performance management – Challenge = insight into valuable driversLeadership Stage 3: Planning & Analysis Stage 2: Process Managers Stage 1: Bean Counters Lower Lower Performance Management Maturity Higher © 2011 Proformative. Proprietary and confidential
  • 43. CPM Best Practicesto Improve Planning & Analysis 1. Deliver timely and accurate dashboards, KPIs and reports 2. Re-forecast frequently 3. Create driver-based plans 4. Perform what-if analysis 5. Drive enterprise-wide collaboration © 2011 Proformative. Proprietary and confidential
  • 44. At what point do you expect your annual budgettargets to become obsolete? Source: Beyond Budgeting Roundtable (BBRT) © 2011 Proformative. Proprietary and confidential
  • 45. Best Practice #2:Re-Forecast Frequently • Continual rolling forecasts for improved validity and better decision-making • React to changing conditions – Market – External factors – Internal factors • Ensure that forecasts do not become unrealistic over time Make better decisions, more quickly © 2011 Proformative. Proprietary and confidential
  • 46. Best Practice #3:Create Driver-Based Plans • Calculate revenue, expenses, balance sheet and cash flow using key assumptions • Focus planning process on controllable activities • Create plans that are integrated across functions • Free managers from focusing on minute details in planning • Results in model that can be easily updated for what-if scenario analysis Drive more accurate plans, and free finance and managers for higher-value activities © 2011 Proformative. Proprietary and confidential
  • 47. Best Practice #4:Perform What-If Analysis  Perform what-if scenarios and change analysis before finalizing plans  Be prepared for all occurrences  Consider factors with huge implications on plans  Predict effects of key events Preparedness makes a big difference in the success of your business © 2011 Proformative. Proprietary and confidential
  • 48. CFO Leadership & Performance Management Maturity Stage 4: Value Managers – Integrated Functional Excellence Higher – Integral part of management team; identifies opportunities and provides critical information & analysis – Capabilities include superior decision support – Challenge = leadership & performance management Stage 4: Integrated Functional ExcellenceLeadership Stage 3: Planning & Analysis Stage 2: Process Managers Stage 1: Bean Counters Lower Lower Performance Management Maturity Higher © 2011 Proformative. Proprietary and confidential
  • 49. CPM Best Practicesto Improve Planning & Analysis 1. Deliver timely and accurate dashboards, KPIs and reports 2. Re-forecast frequently 3. Create driver-based plans 4. Perform what-if analysis 5. Drive enterprise-wide collaboration © 2011 Proformative. Proprietary and confidential
  • 50. Best Practice #6:Drive Enterprise-Wide Collaboration • Involve more people in the process • Consider viewpoint of all functions • Lower-level employees can have visibility that executives do not have • Make it easy for your managers to participate – Clear process – Easy-to-learn tool – Customized to fit their business More people involved in the process results in better insight into the business, and more accurate plans. © 2011 Proformative. Proprietary and confidential
  • 51. Summary• Finance can earn its place at the strategy table – Deliver value-added services and performance improvement insights• Liberate your managers – Free them from detailed annual planning – Replace budgets with continuous planning reviews – Fast, frequent, relevant KPIs Best practices + SaaS technology + purpose-built planning and reporting application = effective corporate performance management © 2011 Proformative. Proprietary and confidential
  • 52. Thank You© 2011 Proformative. Proprietary and confidential
  • 53. Polling Question© 2011 Proformative. Proprietary and confidential
  • 54. Q&A© 2011 Proformative. Proprietary and confidential
  • 55. We will send you a follow-up survey and wouldappreciate your feedback.Please join us at www.proformative.com to ask anyadditional questions you may have and to continuethis conversation with your peers and the expertsyou heard from today. If you have questions about CPE Credit please contact Tonya Walsh at twalsh@proformative.com © 2011 Proformative. Proprietary and confidential
  • 56. Event Sponsor © 2011 Proformative. Proprietary and confidential