Presentation by Geoff Noble of the CFO Group - September 2014 1. What is Financial Performance Management? – Why we think it’s important to you as Chartered Accountants 2. Performing a self-assessment health check – Effectiveness and efficiency scores – Solution roadmap and business case 3. Implementing a solution – Critical success factors – How-to guide for projects

1. Simplifying Financial Performance Management
Systems
Geoff Noble
9th September 2014 at 4:45pm Auckland
Prepared by CFO Group for Chartered Accountants Australia
and New Zealand members

2. Agenda
1. What is Financial Performance Management?
– Why we think it’s important to you as Chartered Accountants
2. Performing a self-assessment health check
– Effectiveness and efficiency scores
– Solution roadmap and business case
3. Implementing a solution
– Critical success factors
– How-to guide for projects
4. Summary and Q&A

3. 1. What is Financial Performance
Management?

4. Financial Performance Management (FPM)
§ Planning
§ Budgeting
§ Forecasting
§ Closing
§ Consolidation
§ Management Reporting
§ Statutory Reporting
§ Regulatory Reporting
§ Scenario Modeling
Corporate / Group
Operations / Divisions

5. We often find these processes supported by:
• Multiple systems requiring data transfers and reconciliation
• Manual intervention and adjustment
• Big Excel spreadsheets with Macros that sometimes fail
• Key person dependencies when failure occurs
• Excel and Word for disclosures
• Lots of scaling, rounding and manual balancing
• PowerPoint for presentations
• Lots of copy / paste
• Lots of checking and re-checking
But the complexity in these multi-step fragile processes is
often “unseen”, with bottlenecks and failure points costing an
enormous amount of time and effort.

6. Great potential opportunity by simplifying FPM
Add more value
Free up time
Reduce costs
Reduce effort
Streamline processes

7. We think FPM is particularly important for
Chartered Accountants
CFOs are telling us:
- Want Finance to become business partner / advisor / catalyst / strategist
- make time available for analysing information
- proactively bring opportunities to the business
- Need to reduce the cost of Finance
- streamline processes
- off-shore the mundane
- beat the top performer benchmarks for finance costs % revenue
- Improve quality and timeliness of performance information
- Deliver the right information to the right people at the right time
… automating and simplifying FPM supports all the above and
Chartered Accountants Australia and New Zealand members have the
right qualifications to make this happen

8. 2. Performing a self-assessment health
check

9. If you don’t do this, a terrible thing will happen
NOTHING!
“I get all the information I ask for”
“They don’t realise I was up to 2am preparing that forecast”
“But it’s OK, we get by”
“Finance seems very responsive”
“With all the copying and pasting, checking and re-checking,
every iteration of the budget nearly kills us and
there is absolutely no time for analysis.”
“But it’s OK, we get by. We have to.”

10. How to self-assess your FPM processes
• Interview the key stakeholders of each FPM process
– Recipients of the output
– Contributors in the process
• Assess current situation by scoring processes out of 10 for:
– Content effectiveness
• Relevance
• Accuracy
• Timeliness
• Alignment (e.g. Budget to Strategic Plan)
– Process efficiency
• Time (benchmarks are available)
• Effort
• Cost
• Satisfaction
• Rank the processes in order of importance to fix

11. FPM Scorecard
! Effectiveness!of!output!(0010)! Efficiency!of!process!(0010)! Importance!
FPM!Process! Relevant! Accurate! Timely! Aligned! Time! Effort! Cost! Satisfaction! Priority!
Strategic!
! ! ! ! ! ! ! ! !
Planning!
Budgeting! ! ! ! ! ! ! ! ! !
Forecasting! ! ! ! ! ! ! ! ! !
Closing! ! ! ! ! ! ! ! ! !
Financial!
! ! ! ! ! ! ! ! !
Consolidation!
Management!
Reporting!
! ! ! ! ! ! ! ! !
Statutory!
Reporting!
! ! ! ! ! ! ! ! !
Regulatory!
Reporting!
! ! ! ! ! ! ! ! !
External!
Reporting!
! ! ! ! ! ! ! ! !
Board!
Reporting!
! ! ! ! ! ! ! ! !
Scenario!
Modeling!
! ! ! ! ! ! ! ! !
Operational!
Planning!
! ! ! ! ! ! ! ! !
Operational!
Reporting!
! ! ! ! ! ! ! ! !
!

12. What is required to score a 10?
• For each process, identify what could be done to get a 10:
– Identify the existing reports, usage and the issues with them
– Outline what new reports are required and rationalise existing
– Map out the steps of the existing process identifying bottlenecks
• Look for copy / paste to Excel, Word and PowerPoint
• Look for manual intervention and manual adjustment
• Look for failure points and duplication of effort
– Design a new streamlined and ideal process in outline
– Estimate the future effort and therefore savings
• Document a FPM roadmap
– Quick wins: that can be implemented now within existing “business as
usual” budget or other available budget for this financial year
– High priority: Next financial year priorities and budget required
– Future: Roll-outs in future years based on priority

13. Create a compelling Business Case for
the implementation of FPM
• Quantify the hard $ benefits of getting a score of 10
– Effort savings (FTE)
– Cost savings ($ calculated from the effort savings in FTE)
• Note the opportunity to re-deploy staff to value-adding activities
• Quantify the soft benefits of getting a score of 10
– Better quality plans, budgets, forecasts, actuals
• More iterations of plans, budgets, and forecasts
• Relevant, accurate, timely, consistent information
– Less risk of reporting the wrong numbers
– Higher staff satisfaction
• Quantify the costs and return on investment
Add more value
Free up time
Reduce costs
Reduce effort
Streamline processes
– FPM software fees and hardware costs or SaaS costs
– Training and implementation services
– Demonstrate return on investment is good based only on cost savings

14. 3. Implementing a solution
Outcome: Know what we have found the critical success
factors to be and how best to approach the project

15. Critical Success Factors for a FPM project

16. Critical Success Factors

17. Financial Performance Management software
• The software industry calls it xPM
FPM
CPM
BPM
Large software
vendors
PM
EPM

18. Most software vendors have bought
multiple products for FPM
Disclosure
Management
tools
Strategy
Management tools
Consolidation tools Planning tools
Closing tools
Analytical tools
Data Integration tools
Forecasting tools

19. Pitfalls using multiple products
• Multiple specialists
• Too many cooks
• Cost é
• Time é
• Complexity é
• Value ê

21. Use a single software product not many
Planning
Budgeting
Forecasting
Closing
Consolidation
Management Reporting
Statutory Reporting
Regulatory Reporting
Scenario Modeling
Group / Corporate
Operations / Divisions

22. Critical Success Factors

23. Typical approach to projects
• The traditional project team:
– Project manager
– Business analysts
– Technical specialists
• This approach falters when:
X The project manager is generic and not experienced in financial
performance management and can’t allocate the required tasks
X The business analysts are generic and do not understand FPM or consider
the natural built-in financial intelligence and capabilities of the software
X Technical specialists build the system based on documented requirements,
leading to poor use of software, protracted development and customisation
It doesn’t have to be this complicated…

25. It is easy with a qualified Solution Designer
Central and key project role.
They define and design the solution.
Their qualifications include:
– Understand finance and management accounting
– Understand financial systems
– Strong analytical and problem solving skills
– Can communicate in a visible, logical and persuasive way
– Can see the big picture and also have an attention to the detail
– Interested in software and how to get the best from it
– Collaborative work style
Chartered Accountants are ideal to take on this role…

26. Critical Success Factors

28. 1. Vision: Deliver a unified system for financial performance management across the organisation
providing an single accessible source for all financial performance information
4. Data Model: 5. Processes: 2.Goals: 3. Outputs: 6. Data Sources:
Business
logic and
financial
rules
• Less effort and
pain to produce
the information
• More relevant
information
• More accurate
and consistent
information
• Transparent
rules and
assumptions
• More timely
delivery of
information
• Less costs to
own, maintain,
run and use
• Flexible platform
to meet future
needs
Management
Reports
Statutory
Reports
Scenarios and
Analyses
Ad Hoc and
other outputs
Dimensions:
• Periods
• Scenarios
• Categories
• Currencies
• Accounts
• Entities
• Products
• Customers
• Other
Financial
systems / GL
Other
sources
Manual
Input
Operational
systems
Management Actuals
Plan
s
Budget
s
Scenario Modeling
Plans, Budgets
and Forecasts
Dimensions and
logic to support
outputs
Statutory Actuals
Forecast
s
Timetables
Workflows
Approvals

29. Critical Success Factors in Summary
1. Right software
2. Right people
3. Right approach
Take any away
and the project
will likely fall
over.

30. Benefits we have seen from applying this
simple top-down methodology
ü Successful implementations of FPM systems
– On time, on budget, on scope
ü Get the right numbers out faster to the people that need them
– With less pain and effort
– With reduced costs
ü Happy users
– High staff satisfaction in both Finance and the business
ü Provide far more time for analysis…
– Finance to become the partner as intended proactively introducing
opportunities to the business

31. 4. Summary and Q&A

32. Approach to simplifying FPM…
• Perform a self assessment scoring each process for
effectiveness and efficiency out of 10 and rank them
• Prepare roadmap and business case to get to 10s
• Implement the unified vision in stages
• Combine three ingredients for a successful project:
10
• Right technology – Pick unified to keep it simple
• Right people – Chartered Accountants ideal to design solution
• Right approach – Top down from outcomes and outputs
Case Studies…please email me for copies
Benchmarks…please email me for details

33. Questions?
Thank You!
geoff@cfogrp.com

34. Simplifying Financial Performance Management
Systems