Enterprise Planning for the Retail Industry

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In the new economic reality, retailers need to plan for the short and long-term. However, most organizations fall short of comprehensive Enterprise Planning due to a combination of inadequate tools and siloed processes. Learn how Hyperion Strategic Finance can be deployed to seed operational plans with strategic targets as well as receive the latest forecasts from Planning and Essbase. In addition to integrating the short and long-range planning processes, we will also discuss how true Enterprise Planning should utilize the same reporting toolset to integrate and enhance analytical and reporting capabilities in the planning process.

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Enterprise Planning for the Retail Industry

  1. 1. Enterprise Planningfor the Retail Industry Ricardo Rasche HSF Practice Director Edgewater Ranzal rrasche@ranzal.com Tel. 312-810-0685 Session ID#8121
  2. 2. Agenda • Introduction • Hyperion Strategic Finance Overview • Customer Cases • Product Demonstration • Questions & Answers
  3. 3. Focus Services People1996 700+/1000 Methodology Customers Partnership
  4. 4. The Ranzal HSF Practice • Established through recent acquisition of Meridian Consulting Int’l • Practice directors with over 35 years of combined experience in HSF and over 150 successful HSF engagements • Corporate finance domain experts on Financial Modeling for Long Term Planning, Scenario Modeling, Funding, Valuation, and M&A • Extensive experience integrating with Hyperion Enterprise, HFM, Hyperion Planning as well as extending HSF capabilities with Crystal Ball and Essbase
  5. 5. Strong Recovery? ? Slow 2007 Growth?Best Use of Capital Global Growth High LeverageCommodity Prices UP Stock Market Boom Another 2008 2009-10 Recession? Survival Recovery Credit Crunch Corporate Cost Cutting Housing Bubble Strengthen Balance Sheet Global Recession Easing of Credit Markets Stock Market Crash Economic Stimulus Bankruptcies
  6. 6. CFO Office Baseline Forecast+ Initiatives FP&A Group+ New Projects+ Acquisitions Corporate Development- Divestitures+ Capital Structure Assumptions Treasury Dept+ Debt Detail, Dividends Strategic Plan
  7. 7. Consolidation of Stores and Regions Comp Sales ScenariosModeling by Prod Category or Store Type What-If Analysis by Brand or Store TypeForecasting Store Openings and Closings Evaluating New Store Concepts Long-Term Ad-hoc Planning Scenarios Retail Industry Solution Corporate Funding Development Analysis Joint Ventures and New Projects Funding Requirements for NSO Growth Mergers & Acquisitions Debt and Covenant Analysis Divesting Unprofitable Stores and BU’s Impact on Credit Rating
  8. 8. Service Ind. / FinancialRetail Manufacturing Utilities Logistics Higher Ed Metals / Mining Miscellaneous Services Stanford University Boston College Yale University Univ. of Vermont ABG SUNDAL COLLIER Healthcare CPG Telecom Life Sciences High-Tech General Mills
  9. 9. Specialty retailer of consumer electronics with revenues of $45B and 19% market share in the U.S. Also operates in Canada, Mexico, China, and TurkeyBefore AfterTechnology  Centralized model enabling strategy Hard to maintain Excel spreadsheets discussions and target-setting at the executive level (EVP’s, CFO) Difficult integration of historical dataBusiness Need  Total company view with detail by business unit, product category, country,• Consolidated 5-year plan for both and brand. domestic and international businesses  Complete set of financial statements,• ROIC scenarios by product category key metrics (incl. ROIC) at each level (for domestic) and country/brand (for international)  Baseline, New Store Openings (NSO), and incremental scenarios for new initiatives
  10. 10. Canada’s largest independent tire dealerBefore AfterTechnology  Integrated financial statements that Time consuming Excel spreadsheets allowed for scenario analysis on both Models lacked flexibility and Income Statement and Balance Sheet accounting integrity  Ability to model new store additions andBusiness Need the impact to financials year to year• Scenario capability around key drivers  Enhanced Inventory, A/R, and Fixed such as new store openings and sales Asset forecasting at each major growth rates by product or region business level• Consolidated long-term plan  Detailed ratios and covenants to incorporating all major business evaluate ongoing capital structure entities
  11. 11. Fast-food company with $2.5 Billion in revenues. Currently owned by private equity firm 3G Capital of Brazil (late 2010)Before AfterTechnology  Able to understand financial impact of Large Excel spreadsheets B/S, CF drivers Difficult to maintain and audit  Run scenarios around opening newBusiness Need restaurants, royalty rate changes• Prepare forecast scenarios for IPO  Evaluate comp sales sensitivities• More visibility into balance sheet and  More visibility into the cash flow needs cash flow forecasting of each market• Understand potential impact on  Calculate impact and pressure-test complex debt covenants complex covenants
  12. 12. Product Demonstration
  13. 13. NEEDS ANDREQUIREMENTS PLAN AND CUSTOMIZED GO LIVE AND ANALYSIS DESIGN PHASE BUILD PHASE TEST PHASE TRAINING ROLLOUT SUPPORT• Current state and • Define a project • Construct • Upload test data • Develop easy to • Review Go Live stakeholder needs roadmap templates and use reference Checklist • User validation analysis models guide • Determine • Move solution • Calibrate models• Identify process, optimal level of • Report / dash- • Develop custom into production system, and detail and board build-out • Document final training and • Provide on-site organizational structure process, system, exercises • Prototype support components org • Design docs reviews • Deliver user • Semi-annual • Detailed work training • Develop data audits and plan with interfaces process/model deliverables reviews TYPICAL IMPLEMENTATION Avg project takes 8-12 weeks to implement
  14. 14. Questions & Answers

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