G A InfoMart Cognos TM1 planning budgeting-forecasting solution
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The document discusses financial performance management and enterprise planning solutions. It outlines challenges such as uncertainty, disparate systems, and business risks. The solutions aim to improve planning, forecasting and budgeting through integrated platforms that support driver-based planning, rolling forecasts, scenario modeling, and analytics. Case studies show how various companies leveraged the solutions to accelerate budgeting, improve reporting and reduce costs.
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G A InfoMart Cognos TM1 planning budgeting-forecasting solution
- 1. Planning, Forecasting and Budgeting powered by IBM Cognos
- 3. Uncertainty – The New Normal Velocity and Volatility “ Over 60% of Finance executives believe that when the recovery takes hold, the heightened uncertainty in the business will remain” CFO Magazine/Duke University Business Outlook, September 2009 “ ~60% of Finance organizations believe that they have to make major changes to respond [to growing industry/sector pressures]...” 2010 IBM CFO Study
- 4. Persistent Challenges Spreadsheets Failing “ there have been well-documented cases of errors and losses resulting from spreadsheet manipulation errors and accidents.” Gartner, August 2007 Disparate Systems “ Average finance organizations operate 11 finance systems per billion dollars of revenue.” Hackett Group, 2007 Business Risks “ 62 percent of enterprises … encountered a major risk event … 42 percent of these enterprises were not well prepared for the event.” IBM Global CFO Study 2008
- 6. This requires improved finance efficiency and business insight Source: IBM Global 2010 CFO study
- 9. Business Analytics SPSS Predictive Capabilities TM1 On-demand Planning & Analytics Business Viewpoint Dimension Management Business Intelligence Reporting, Analysis, Dashboarding, and Scorecarding Controller Consolidation and Corporate Reporting Express BI and planning purpose-built for midsize companies Analytic Applications packaged reporting and analysis to optimize business performance
- 12. Connect Financial and Operational Planning and Forecasting IBM Advantage: Common technology leverage with deep functional & industry blueprints
- 32. © Copyright IBM Corporation 2011 All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. IBM, the IBM logo, Cognos, the Cognos logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others.
Editor's Notes
- Standard template for internal and external presentations. If internal presentations are confidential, please add: “IBM Confidential” to the slide masters. Select: View / Master / Slide Master and add “IBM Confidential”
- Our agenda today is to review: Finance & IT Challenges Overview Of Financial Performance Management Product Portfolio Enterprise Planning & Advanced Analytic Solutions Proof Points Q&A Summary
- Providing business insight drives performance improvement beyond finance. While not optimal, absent Finance Efficiency (e.g. process and data standards) there are still demonstrable benefits to driving better analytical capabilities as suggested by our study. We will follow a similar logic line here, looking at financial and non-financial benefits of having better business insight, and some of the most prevalent things companies have done to increase their capabilities here. We developed a maturity model for analytical capabilities suggesting that basic planning and forecasting capabilities are, like closing the books, a necessity for better business management practices. As such our analysis baseline examines the degree of deployment of this most basic capability. But in our findings are even more strongly correlated and benefits increase even more, as the maturity of analytical capabilities deployed increases. Therefore scenario planning, predictive analytics, and event based automate alerts have an even greater impact on value and capability in finance. But for this theme we will focus just on planning and forecasting in order to keep the discussion simpler and clearer. Before we get into the details, I want to remind everyone that the criteria that define strong business insight are People/Talent effectiveness, deployment of a common planning platform and a high level of satisfaction with analytical capabilities. Therefore, by definition, these companies with strong business insight have already progressed up the maturity curve and have in place a common planning platform deployed across more than 50% of their business, with high satisfaction and strong analytical talent in Finance.
- … business risks abound and these risks put financial systems and processes to the test…plans and forecasts are unreliable, analysis is sparse, and response to business challenges is slow … disparate finance systems often limit accessibility of data and make one version of the truth elusive … and the tools that finance relies on most (spreadsheets) have proven difficult to deploy for collaborative and analytic processes SEGUE > Thinking about the processes and systems that address these challenges is essential. Let’s look at these FPM processes a little more closely… ---------citations------------ “ Measuring/monitoring Business Performance” and “Meeting Fiduciary and Statutory Requirements” were highest on the list of priorities with 84% and 76% respectively; According to the Global CFO Study for 2008 completed in September, in the past three years 62 percent of enterprises with over $5 billion in revenue encountered a major risk event. When a major risk event did occur -- such as strategic, operational or geopolitical -- 42 percent of these enterprises were not well prepared for the event. The Global CFO Study, titled "Balancing risk and performance with an Integrated Finance Organization" was developed by IBM Global Business Services' Financial Management practice and the IBM Institute for Business Value (IBV), with assistance from the Wharton School at the University of Pennsylvania and the Economist Intelligence Unit. Over half of the participating CFOs and senior finance executives participated in a face-to-face structured interview, designed to capture insights on the subject of risk management and finance transformation. The remaining balance responded to an online survey. --------- “ According The Hackett Group, average finance organizations operate 11 finance systems per billion dollars of revenue” These numbers have not been published in a paper to date, as this was composed from a special data cut for relevancy to your intended market (company size per the original concern). Second, while it does seem a bit counterintuitive that small companies will have more systems per billion in revenue that large companies, those that are between $500 million and $3 billion are typically in a stage where they are just becoming multi-divisional or multi-geography in terms of operations, they have grown by acquisition and have significant complexity in their operations. They also don't necessarily have the scale to afford a global systems consolidation effort. Companies below $500 million that have just gotten started would tend to have fewer. One thing to note, the 33 systems per billion is the median value for our small diverse peer group (some are more, some are less - same would hold true for the WC and peer numbers), the small consolidated group which would be regional or single country type operations only have 14 systems per billion. In terms of definitions, a finance system represents any application used to support the process so it would include primary applications as well as any bolt-on or specialty applications, web-based applications, self service tools, etc. that augment the functionality of the primary application. This would include spreadsheet applications but would not include things like e-mail, Internet search engines or other common communication applications. ----------- Gartner: The Growing Dimensions of Information Management in Government Harris, Richard G. August 8, 2007 6 Pages Pressing Areas of Technology The first area relates to the use of spreadsheets. For two decades, spreadsheet tools have been used extensively in public- and private-sector organizations. Spreadsheets are primarily used for financial and other modeling, to support operations and to generate reports. Although an extremely useful tool when used appropriately, there have been well-documented cases of errors and losses resulting from spreadsheet manipulation errors and accidents. This is primarily due to the growing complexity of spreadsheets, coupled with higher levels of compliance requirements and auditing. Not surprisingly, the most-significant spreadsheets are those that have an impact on the overall performance of the enterprise.
- 60% are planning major changes to keep up. 70% are doing this with an enterprise focus widening gap between importance and effectiveness
- So how do we get there and lead a information transformation: Move From: Sense and response => Predict and Act Instinct and Intuition => Real-time, fact driven Skilled analytics experts => Experts Back Office => Point of Impact Automated => Optimized
- Turn our attention to how IBM software addresses these issues through a portfolio of software products specifically designed for the Office of Finance.
- So, what is Financial Performance Management? Financial Performance Management is the systematic reporting, analysis, planning, and optimization of enterprise performance to support growth, profitability, and compliance demands. Financial Performance Management systems structure and automate the processes that help companies Plan, forecast and control enterprise resources; Measure, analyze and optimize performance; Report to external stakeholders with confidence. SEGUE: Finance (the function) plays a vital and special role in initiating and sustaining performance management practice…And has had a difficult time addressing some vexing challenges and balancing business and compliance demands. NEXT>
- A vital set of capabilities to address all priorities in the office of finance. We will be s
- IBM’s Financial Performance & Strategy Management portfolio addresses 3 key areas all financial organizations struggle with: Close, Consolidate, and Report Analyze & Optimize Plan, Budgeting , and Forecasting We will be exploring the Plan, Budgeting , and Forecasting solution area.
- IBM provides Connect financial and operational planning Address both high participation and deeply analytic planning Over 75 performance blueprints to accelerate success Advanced analytic value Dashboarding/Visualization Scenario Analytics Statistics / Predictive Analytics
- Let‘s take a look at another example of how value integrators leverage Cognossoftware to drive superior business insight. We have seen how you can drive efficient business processes. We have also seen a nice example of utilizing superior analytical capabilities to prepare decision making. In this last example we want to take a look at how companies can better identify risks & opportunties and how companies can validate different options.
- And our industry BP’s are expanding as well. With new blueprints for gov’t focused on managing economic stimulus funding, as well as new Carbon Management blueprint for manufacturing and several new BPs for Healthcare.
- Turn our attention to IBM bases planning solutions
- The Plan, Budgeting , and Forecasting solution area includes: Strategic Finance Revenue Planning and Forecasting Expense Planning & Control Workforce Planning Capital and Initiative Planning IBM Cognos Plays a key role in meeting these requirements. A patented 64-bit read-write in-memory OLAP engine that provides compact data storage and exceptionally fast performance Model design and data access that presents business information in familiar formats Ease of use , thanks to a development environment that enables users to create sophisticated applications with no need for programming or traditional IT skills An intuitive, flexible approach , which enables users to easily express complex, multi-dimensional business rules Fuses Analysis & Planning together to provide greater accuracy A component of Cognos Performance Management Platform
- Customer’s expectations of auditability, process integration, data and metadata orchestration have all increased…putting this in the context of the FPA department we see needs across… Plan preparation Contribution and workflow associated with Plannign and forecasting cycles And the subsequent reporting, analysis and control activities… In most of these worksteps our solutions have required a fair amount of DIY initiative…to manipulate and warehouse data to build BI sources that span both Planning and Actual / Ledger domains… In the area of consolidation, we may be at even greater risks… NEXT >
- TM1 provides……. Lets move on to TM1’s modeling capability…
- Major advances this year are suited for the turbulent times we live in and have focused on infusing analytics into these key performance management processes. Innovation with IBM Cognos TM1 has been central to that. As many of you know, last fall we brought you powerful, native access to TM1 from our business intelligence capabilities and that has powered a new set of analytic and BI scenarios on these technologies; This year, TM1 9.5 delivers a truly unmatched blend of high contribution planning and forecasting, scenario analytics, and deployment ease built for the challenges today. TM1 9.5 supports a new deployment option called the TM1 Contributor client. This interface (familiar to many of our customers) is easy to use and delivers a managed contribution and workflow user experience . Truly maximizing the regular and valuable participation of staff from all divisions, departments, and locations without training or delays in forecasting and planning processes. Personal Scenarios enabled by a new technology called “Sandbox”. This new technology allows for unlimited personal (and private) scenarios of an analysis, plan, budget or forecast and may include personalized hierarchies and dimensions. Scenarios playing is a significant tools in coping with uncertainty; and now planning and analytic processes can be both fast and auditable but also supportive of everyone’s need to test what-if. TM1 addresses all of the essential qualities you look for in a planning and analytic technology: Exceptional fast analytics Data and user scalability Choice in user interfaces across Excel, custom web deployment and new managed web contribution. NEXT> [Script] Enterprise Planning… NEXT> The reality in most organizations is that allocating resources to initiatives - answering “What should we be doing?” - happens with many individually created spreadsheets. What is known as spread sheet hell. The result is that resources are not optimally allocated, there is a time delay and the process is open to risk. The issue with excel is not within that team of 15 people. That team has their own business rules, their own calculations, their own assumptions. The issue is that as those roll up they have to be reconciled: Team by team; department by department; function by function; operating company by operating company. While all that work is going on the resources across the company are not optimized. They are not deployed or allocated to best advantage. The spreadsheets also have all the risks associated with spreadsheets – there is no way to back them up, No way to track them, No security, No audit ability, Difficult to maintain Note to presenter These are all the same impacts that are defined in the EP pitch. If this is an EP focused prospect, you can go right into the EP pitch from slide 10
- When we look at the analyze phase of the planning process ..it centers on Explore Performance Gaps Validate Corporate Drivers Define “What If” Scenarios Organizational, Product Family, Product/Channel Mix Validate Planning Assumptions This allows organizations : Ability to meet the dynamic needs of the organization….. Provide a fact based approach planning processes before they set their forecasting assumptions. Lets take a deeper dive on what TM1 brings to Analysis
- Customer’s expectations of auditability, process integration, data and metadata orchestration have all increased…putting this in the context of the FPA department we see needs across… Plan preparation Contribution and workflow associated with Plannign and forecasting cycles And the subsequent reporting, analysis and control activities… In most of these worksteps our solutions have required a fair amount of DIY initiative…to manipulate and warehouse data to build BI sources that span both Planning and Actual / Ledger domains… In the area of consolidation, we may be at even greater risks… NEXT >
- TM1 provides……… Now lets take a look at the all important collaboration phase of the planning process where we collect information and assumptions from our business stakeholders across the organization.
- A model based approach to planning is the “secrete ingredient” to our ability to meet the diverse needs of planning across the organization. Through our modeling approach that is owned by finance we: Centralized meta-data, data and business rule definitions Extend ERP investments through certified connectors to SAP BW & R3 Facilitate the adoption of Best Practices such as Driver based Planning Rolling Forecasts
- Customer’s expectations of auditability, process integration, data and metadata orchestration have all increased…putting this in the context of the FPA department we see needs across… Plan preparation Contribution and workflow associated with Plannign and forecasting cycles And the subsequent reporting, analysis and control activities… In most of these worksteps our solutions have required a fair amount of DIY initiative…to manipulate and warehouse data to build BI sources that span both Planning and Actual / Ledger domains… In the area of consolidation, we may be at even greater risks… NEXT >
- IBM Cognos TM1 provides a broad range of user experiences that are only limited by our customers imaginations and requirements: We provide: Familiar Web & Excel Deployment Rich Workflow Application linkage Start small and expand enterprise wide A component of Cognos 8 Performance Platform Best of all they can start small and build on their success….a real competitive advantage in these challenging times This all results in Timeframe-appropriate Plans High Participation & Data Volumes A Wider / Deeper View…and Increased accuracy Lets take a look at these Contribution capabilities in a little more detail
- IBM Cognos TM1
- The second contribution approach for TM1 is through IBM of TM1 Contributor. This client allows access to the same TM1 object that the excel client will bring the same managed collaboration capability to drive what if scenarios through personalization as described earlier. Managed contribution can enjoy the benefits of workflow, pick-list for executing driver based plans, end user personalization and charting within there existing planning & analysis processes. The data scalability and analysis capabilities of TM1 combined with the managed planning capabilities of Contributor creates a unique & unrivaled user experience in the industry and we are looking forward to proving its value in the market in Q4.
- Lets now take a look at some proof points
- DHL Global Forwarding North America – Leading air, ocean freight Challenge Needed budgeting, forecasting data faster (within 3rd-4th working day of months versus 10th) Solution required to pass internal security audits Solution Consolidated KPIs (of 100K records) in less than two minutes; unified views for management calls Budgeting reduced to one month from three; updates in real-time to meet today’s turbulent economy Complex financial analytics on data updated hourly Comprehensive security, audit trails Live on system within 6 weeks Reduction in travel expenses Quote “ You can change models 20 times if you needs to, and do it rapidly.” – Anand Saxena, Financial Reporting, DHL Global Forwarding IBM TM1 Cognos remains standard solution after five acquisitions.
- BAE Systems, Defense and Aerospace Challenge Data for project costs gathered from a myriad of personnel and business units for Rate Modeling Spreadsheets unable to handle the data volumes on highly complex projects. Solution Fast, accurate financial reporting for projects and financial performance An integrated budgeting process with what-if scenarios, forecasting, analysis, automated consolidation Analysis of cost base, producing 800+ reports/month for budgeting/planning process Quote: We have gone from a single user copy of TM1 to having hundreds of TM1 users across five business sites within the company….This accounts for billions of pounds’ worth of financial transactions on some strategically important projects.” Garry Cook, TM1 Development Manager, Air Systems
- Blue Mountain: Ontario’s Largest Mountain Resort Challenge Slow budgeting and performance management software – delayed data/slow processes Data across 13 units from a multiplicity of systems Difficult maintenance for thinly stretched IT Staff Solution Faster, more simplified budgeting process Greater access to daily reports that directly affect profitability Analytics to identify proper staffing levels and success of marketing campaigns Improved inventory management Results: ROI: 1822% within one month Reduced labor costs by $2.5 million/year Plan daily staffing inside and out Fast adjustments to inventories year-to-year
- [Script] The more continuous, reliable pulse of the sales forecasts, related risk metrics and modeling, is a leading indicator of revenue, and improves the forecasting of related receivables, purchases and payables, inventory and cost of sales All contribute to a forecast of total sources / needs of cash and the ability to fund discretionary investments. Seeing deeper into the fog of this recessionary times improves the lead time available to act and react in the event of a short fall… Cognos Advantages for Enterprise Planning and the VISIBILITY AND CONTROL that connected financial and operational processes bear out include: Ability to easily model and links operational plans, analytics, and metrics with drivers Driver based planning is more intuitive, requires less detail, creates more accountability as managers are engaged with operational metrics rather than abstract financial figures. Ultimately this leads to increased forecast accuracy. Support high participation and dynamic, rolling horizons Allows people closest to translate operational metrics or measures to financial effects in regular cycles of update. Marketing thinks in terms of expense $ per leads. Sales VP thinks in terms of revenue per sales rep. In retail, they think of revenue or expenses per square foot. With Rolling forecasts, companies are better able to manage end of quarter or end of year forecast jitters. This is particularly important in businesses with high demand variability. Our systems supports rapid prototyping and iterative development with great ease. And Cognos Software and it’s Innovation Center for Performance Management can provides know-how and resources to support your transformation. No need to go it alone. Instead, stand on the shoulders of other forward thinking companies who share their insight and best practices.