Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Application Requirements for Rolling Forecasts By Alight Planning Ben Lamorte, VP Business Development Rand Heer, CEO Pres...
<ul><li>2-Hour Video Workshop on Rolling Forecast Requirements </li></ul><ul><ul><li>Highlights of 4-Hour Conference Works...
<ul><li>Ben Lamorte </li></ul><ul><li>Business Activities </li></ul><ul><ul><li>Vice President, Business Development, Alig...
Requirements for Rolling Forecasts  <ul><li>Today’s 45-Minute Agenda </li></ul><ul><ul><li>30k Foot:  </li></ul></ul><ul><...
At what point do you expect your annual budget targets to become obsolete? SOURCE: Business Finance Magazine
SOURCE: APQC / BBRT Research How Much of Planning Adds Value?
Budgeting Rolling Forecasts Timing Frequency Once a year Often—event driven Cycle time Months/weeks Days/hours/near real t...
<ul><li>Robust Scenario Analysis </li></ul><ul><ul><li>You can’t predict the future, especially in today’s economy </li></...
<ul><li>Scenarios In Spreadsheets </li></ul><ul><ul><li>Separate workbooks is the principal mechanism </li></ul></ul><ul><...
<ul><li>Versions Are For Budgeting </li></ul><ul><ul><li>Create and approve one version at a time </li></ul></ul><ul><ul><...
<ul><li>Forecasts = Scenarios (lots of them!) </li></ul><ul><ul><li>Assessing risk—BE/Hi/Low ranges  </li></ul></ul><ul><u...
“ Be Prepared” “ Develop Situational Awareness” The Goal: Be Prepared
<ul><li>What are the three scenarios that your company needs to be analyzing now as part of your planning process? </li></...
<ul><li>Reporting functionality checklist: </li></ul><ul><ul><li>Compare any two scenarios side by side with variances </l...
<ul><li>Maintenance issues </li></ul><ul><ul><li>Cumbersome maintenance results in errors  </li></ul></ul><ul><ul><li>Time...
<ul><li>Communicating the model in real time </li></ul><ul><li>The new “collaboration” </li></ul>The Excel PowerPoint Cycl...
<ul><li>The “need for speed” </li></ul><ul><ul><li>Everything refreshes in  near real time </li></ul></ul><ul><ul><li>The ...
<ul><li>Scenario Analysis Checklist </li></ul><ul><li>Scenarios have comparative reporting: </li></ul><ul><ul><li>Compare ...
<ul><li>Rand Heer </li></ul><ul><li>Business Activities </li></ul><ul><ul><li>CEO, Alight Planning (Planning software) </l...
Upcoming SlideShare
Loading in …5
×

Application Requirements For Rolling Forecasts Asmi 2

1,188 views

Published on

ASMI Rolling Forecast Presentation 2010

  • Be the first to comment

  • Be the first to like this

Application Requirements For Rolling Forecasts Asmi 2

  1. 1. Application Requirements for Rolling Forecasts By Alight Planning Ben Lamorte, VP Business Development Rand Heer, CEO Presented at ASMI Conference San Diego, CA April, 2010
  2. 2. <ul><li>2-Hour Video Workshop on Rolling Forecast Requirements </li></ul><ul><ul><li>Highlights of 4-Hour Conference Workshop </li></ul></ul><ul><ul><ul><li>http://www.alightplanning.com/Workshop/Requirements-for-Rolling-Forecasts/Video.html </li></ul></ul></ul><ul><li>Books and Websites </li></ul><ul><ul><li>Managing with Rolling Forecasts </li></ul></ul><ul><ul><ul><li>www.johnstretch.com/book/rollingForecast.html </li></ul></ul></ul><ul><ul><li>Future Ready </li></ul></ul><ul><ul><ul><li>www.futurereadybook.com </li></ul></ul></ul><ul><ul><li>Visit Our Website </li></ul></ul><ul><ul><ul><li>www.AlightPlanning.com </li></ul></ul></ul><ul><li>ASMI Private Demo </li></ul><ul><ul><li>Tuesday – Demo Room Reserved </li></ul></ul><ul><ul><li>To Sign Up, Contact Ben Lamorte </li></ul></ul>Resources for Rolling Forecasts
  3. 3. <ul><li>Ben Lamorte </li></ul><ul><li>Business Activities </li></ul><ul><ul><li>Vice President, Business Development, Alight Planning </li></ul></ul><ul><ul><li>Principal, Decision Consulting (Adobe, Kaiser) </li></ul></ul><ul><ul><li>Manager, Business Development, planetrx.com </li></ul></ul><ul><ul><li>Consultant, APM/CSC Healthcare </li></ul></ul>Today’s Speaker <ul><li>Publications </li></ul><ul><ul><li>Author of 2 technical research papers, American Mathematics Society </li></ul></ul><ul><ul><li>Co-author of planning white papers </li></ul></ul><ul><li>Education </li></ul><ul><ul><li>BS Math & Mechanical Engineering, University of California, Davis </li></ul></ul><ul><ul><li>MS degree Stanford University, Management Science and Engineering </li></ul></ul>
  4. 4. Requirements for Rolling Forecasts <ul><li>Today’s 45-Minute Agenda </li></ul><ul><ul><li>30k Foot: </li></ul></ul><ul><ul><ul><li>Why Rolling Forecasts? </li></ul></ul></ul><ul><ul><ul><li>Budgeting Vs Rolling Forecasts </li></ul></ul></ul><ul><ul><li>5k Foot View: </li></ul></ul><ul><ul><ul><li>Summarize Checklist #1: Scenario Analysis </li></ul></ul></ul><ul><ul><ul><li>Special Case Study: Rand Heer on Budgeting & Forecasting at Clorox </li></ul></ul></ul><ul><li>Not doing the 100-Foot View Today: In-Depth Analysis of Application Requirements for Rolling Forecasts </li></ul><ul><ul><li>Requirement #1: Scenario Analysis </li></ul></ul><ul><ul><li>Requirement #2: Driver-Based Modeling </li></ul></ul><ul><ul><li>Requirement #3: Integrated Actuals </li></ul></ul>
  5. 5. At what point do you expect your annual budget targets to become obsolete? SOURCE: Business Finance Magazine
  6. 6. SOURCE: APQC / BBRT Research How Much of Planning Adds Value?
  7. 7. Budgeting Rolling Forecasts Timing Frequency Once a year Often—event driven Cycle time Months/weeks Days/hours/near real time Time horizon Fiscal year Rolling; beyond “The Wall” ______________________________________________________________________________________________________________________ Process Iteration cycles One version at a time Multiple scenarios at one time Participants Many—all managers Fewer—finance; key managers Collaboration Submission/approval Near real time as possible Deliverables Reports in binders Decisions; action __________________________________________________________________________________________________________________________________ Data Type Financial Financial & operational Inputs Many direct inputs Fewer direct; driver-based Measurement Variances Relative change; trends Level of detail Precision driven Relevant; what’s material Budgeting Vs Rolling Forecasts
  8. 8. <ul><li>Robust Scenario Analysis </li></ul><ul><ul><li>You can’t predict the future, especially in today’s economy </li></ul></ul><ul><ul><li>But you can construct scenarios that let see alternate futures </li></ul></ul><ul><ul><li>You can evaluate best courses of action under different conditions </li></ul></ul><ul><li>Driver Based Modeling </li></ul><ul><ul><li>Reduce direct input data volumes </li></ul></ul><ul><ul><li>Increase ‘modeled elements’—operational/driver based planning </li></ul></ul><ul><li>Integrating Actuals </li></ul><ul><ul><li>“ Rolling over” actuals in plan files—apples to apples </li></ul></ul><ul><ul><li>Using actuals to understand trends—focus on rates </li></ul></ul><ul><ul><li>Using actuals as an activity driver/source for plan data </li></ul></ul>3 Key Requirements for Rolling Forecasts
  9. 9. <ul><li>Scenarios In Spreadsheets </li></ul><ul><ul><li>Separate workbooks is the principal mechanism </li></ul></ul><ul><ul><li>A nightmare for maintenance & comparisons </li></ul></ul><ul><li>Scenarios In Budgeting Applications </li></ul><ul><ul><li>Manage to budget versions– aka “version control” </li></ul></ul><ul><ul><li>Process control: who changed that number? what’s approved? </li></ul></ul><ul><ul><li>Compare versions at the product/cost center/account level </li></ul></ul><ul><li>Scenarios In Planning Applications </li></ul><ul><ul><li>Reporting functionality </li></ul></ul><ul><ul><li>Maintenance issues </li></ul></ul><ul><ul><li>Performance [meeting the “need for speed”] </li></ul></ul>Requirement #1: Robust Scenario Analysis
  10. 10. <ul><li>Versions Are For Budgeting </li></ul><ul><ul><li>Create and approve one version at a time </li></ul></ul><ul><ul><li>Version control: who changed that number? what’s approved? </li></ul></ul><ul><ul><li>Once a new version is approved, prior versions are discarded </li></ul></ul>Scenarios Are Different from Versions X X Budget Version A Budget Version B Budget Final
  11. 11. <ul><li>Forecasts = Scenarios (lots of them!) </li></ul><ul><ul><li>Assessing risk—BE/Hi/Low ranges </li></ul></ul><ul><ul><li>Evaluating alternative strategies/programs </li></ul></ul><ul><ul><li>Managing uncertainty— external events </li></ul></ul><ul><ul><li>Actionable knowledge/decisions </li></ul></ul><ul><ul><ul><ul><li>Go/no go decisions on programs </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Reallocate resources </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Change underlying processes </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Manage timing </li></ul></ul></ul></ul>What You Can Do with Scenarios
  12. 12. “ Be Prepared” “ Develop Situational Awareness” The Goal: Be Prepared
  13. 13. <ul><li>What are the three scenarios that your company needs to be analyzing now as part of your planning process? </li></ul><ul><li>What are the three most important decisions your company will be making over the next 12 months? </li></ul>Questions about Scenarios
  14. 14. <ul><li>Reporting functionality checklist: </li></ul><ul><ul><li>Compare any two scenarios side by side with variances </li></ul></ul><ul><ul><li>Compare any two scenarios with variances at all levels of detail </li></ul></ul><ul><ul><li>Line up scenarios side by side at all levels of detail </li></ul></ul><ul><li>Examples </li></ul>Scenario Analysis: Reporting
  15. 15. <ul><li>Maintenance issues </li></ul><ul><ul><li>Cumbersome maintenance results in errors </li></ul></ul><ul><ul><li>Time consuming maintenance kills the use of scenarios </li></ul></ul><ul><li>Maintenance checklist </li></ul><ul><ul><li>Create a new scenario by copying any existing scenario </li></ul></ul><ul><ul><li>Make value changes across scenarios in one operation </li></ul></ul><ul><ul><li>Make structure changes across scenarios in one operation </li></ul></ul><ul><li>Examples </li></ul>Scenario Analysis: Maintenance
  16. 16. <ul><li>Communicating the model in real time </li></ul><ul><li>The new “collaboration” </li></ul>The Excel PowerPoint Cycle The Need for Real Time
  17. 17. <ul><li>The “need for speed” </li></ul><ul><ul><li>Everything refreshes in near real time </li></ul></ul><ul><ul><li>The planning tool is the presentation tool </li></ul></ul><ul><ul><li>The planning tool enables collaboration on-the-fly </li></ul></ul><ul><li>Performance checklist </li></ul><ul><ul><li>Change values of a scenario with ripple through in real time </li></ul></ul><ul><ul><li>Change dimension filters with ripple through in real time </li></ul></ul><ul><ul><li>Toggle between scenarios in seconds </li></ul></ul><ul><ul><li>Update scenarios for structure changes in seconds or minutes </li></ul></ul>Scenario Analysis: Performance
  18. 18. <ul><li>Scenario Analysis Checklist </li></ul><ul><li>Scenarios have comparative reporting: </li></ul><ul><ul><li>Compare any two scenarios side by side with variances </li></ul></ul><ul><ul><li>Compare any two scenarios with variances at all levels of detail </li></ul></ul><ul><ul><li>Line up scenarios side by side at all levels of detail </li></ul></ul><ul><li>Scenarios are easy to create and maintain: </li></ul><ul><ul><li>Create a new scenario by copying any existing scenario </li></ul></ul><ul><ul><li>Make value changes across scenarios in one operation </li></ul></ul><ul><ul><li>Make structure changes across scenarios in one operation </li></ul></ul><ul><li>Application meet “need for speed” for scenario analysis: </li></ul><ul><ul><li>Change values of a scenario with ripple through in real time </li></ul></ul><ul><ul><li>Change dimension filters with ripple through in real time </li></ul></ul><ul><ul><li>Toggle between scenarios in seconds </li></ul></ul><ul><ul><li>Update scenarios for structure changes in seconds or minutes </li></ul></ul>Complete Checklist: Scenarios
  19. 19. <ul><li>Rand Heer </li></ul><ul><li>Business Activities </li></ul><ul><ul><li>CEO, Alight Planning (Planning software) </li></ul></ul><ul><ul><li>Co-Founder, Aspirity (Microsoft BI consulting) </li></ul></ul><ul><ul><li>Founder, FP&A Train (Essbase training) </li></ul></ul><ul><ul><li>Founder, Pillar Corporation (Enterprise budgeting) </li></ul></ul><ul><ul><li>CFO/Finance Director for 2 public companies </li></ul></ul>Today’s Special Speaker <ul><li>Publications </li></ul><ul><ul><li>Coauthor: “Business Intelligence: Making Better Decisions Faster” </li></ul></ul><ul><ul><li>Author of 10 white papers on planning/reporting topics </li></ul></ul><ul><li>Education </li></ul><ul><ul><li>MBA degree Harvard Business School </li></ul></ul>

×