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The Goal of Financial Planning & Analysis — and How to Get There

Author: Todd Rebner | 7 min read | July 5, 2017

A new white paper released by Datavail explores the evolution of Enterprise Performance Management (EPM) from spreadsheets to sophisticated Business Intelligence software suites such as Oracle’s Planning and Budgeting Cloud Service (PBCS). Entitled Why Finance Leaders Are Dropping Excel for Oracle PBCS, the white paper is available for download today.

The white paper examines some of the failings of spreadsheet software, the capabilities of Oracle PBCS, and the process of migrating from the former to the latter. In this post, we’ll look at what a strong enterprise management system looks like and why it’s worth investing in.

The Purpose of Enterprise Performance Management Systems

The first goal of EPM software is to provide an accurate record or audit trail of activities and transactions. While improving performance of an organization is a major reason for keeping records, the requirement for such detailed and accurate reporting stems largely from legal reasons such as taxes, financial reporting, securities laws, privacy laws, fraud prevention, and self-defense.

A second and parallel goal is to improve operational efficiency. Strong record keeping and good data visualization lead to recognizing data patterns that point to opportunities, mistakes, irregularities, strengths, vulnerabilities, and profitability. Through strong data entry, analysis and presentation, processes are continuously improved and a record of incremental improvements is maintained.

A third major objective of financial systems is data security. Strong access control and user tracking systems result in a tight record of such things as who has seen a file, who has not, who needs to see it, and who has been notified. It’s difficult — if not impossible — to attain such nuanced access and tracking systems when everyone is using their own version of an Excel spreadsheet with no central activity tracker.

Those are the basics. What does the advanced system look like? According to Ken Fick, founder of Pierce the Fog consulting firm:

“FP&A answers strategic questions, forecasts for the future, ensures a timely accounting close, prepares board reporting packages, preps the executive team, divests a division, analyzes product line profitability, performs due diligence on an acquisition, and oh yeah does the budget.”

Performance Goals for a Financial Planning and Analytics Systems

When you combine all the capabilities of a software suite such as Oracle’s Planning and Budgeting Cloud Service, asking what it can do for you is like asking what a smartphone can do for you: Where do you start? On a smartphone, you’d want — at minimum — to be able to make calls, send text messages, and record images, sound, and video.

For an EPM system, you’d want it to do budgeting, planning and forecasting:

  • Better Budgeting with EPM 

One of the biggest benefits of using Oracle PBCS, according to the Datavail white paper, is the ease with which you can run scenarios on a wide range of variables and get results in seconds. With access to historical data, Oracle PBCS can sharply predict line item ranges, compare them with actual spending trends, and alert you of potential problems.

  • Better Planning with EPM

PBCS is a lot more than a bookkeeping system in the cloud. It combines rule sets such as FASB accounting standards, pre-built logic, and best practices hard-baked into the software which is maintained, patched, and upgraded by Oracle in the cloud. Fast-growing organizations are hard to plan for. PBCS makes it easier by providing system feedback when assumptions don’t match data trends.

  • Better Forecasting with EPM

The majority of businesses with annual revenues under $1 billion are able to accurately forecast cash flows for only a few months into the future. Past four months out, most manual forecasts based on compiling spreadsheets are useless. With an EPM system that is well-configured and successfully adopted, it’s possible to make accurate predictions of long-term projects such as entering new markets, entering new territories, setting compensation levels, and predicting data warehouse needs.

  • Faster Execution with EPM

“Always Be Closing” might be good advice in sales but it’s terrible advice in financial management. If you are always playing catch up trying to document what happened instead of projecting what’s coming, then you’re wasting a lot of organizational talent pool and many opportunities that pass before you are able to see them. In an Oracle survey of small and medium businesses (SMBs), 93% of financial managers say the ability to execute strategy quickly is the most important feature in a budgeting and planning system. Strong data management combined with strong data visualization leads to the ability to see signals quickly and act on them with greater confidence.

Configuration Goals for Cloud-based FP&A

A great deal of the benefit of good financial planning software is not how complex it is but how simple it is to do complex things. A good system has to have a fast adoption curve in order to inspire daily use, to bring new hires up to speed quickly, and to respond to a market that expects real-time analytics.

Here are some of the goals for EPM systems that guide the decision of what to use for planning, budgeting and forecasting:

  • Built-In Assistance.  Guidance for everything from deploying the system, migrating data, and building reports and dashboards.
  • Accessible from Anywhere. It’s a given that in today’s world, authorized users want access to their data instantly, wherever they are, on whatever device they want to use. PBCS combines great access tracking and control with responsive design to empower modern dispersed teams.
  • Scalable. You will not be outgrowing PBCS as soon as you finish learning how to use it. You can scale up data storage, processing, and analytics in the cloud whenever you need it. As your operation scales with new locations and users, your financial management system scales, too.
  • Great Visuals. Come for the financial controls, but be sure to stay for the pretty pictures. PBCS transforms two-dimensional data into colored, textured, layered analyses that visually highlight important trends or inconsistencies. PBCS provides terrific templates and tools that allow you to customize your data sets without corrupting everyone else’s view. Improvements you make to reports and dashboards can be securely stored and shared with everyone.
  • Cost Savings. A major reason for making the move to cloud-based PCBS is the financial savings. In the cloud, you pay only for the resources you need for as long as you are using them. The auditability of closed-loop EPM systems saves enormous time in tasks such as quarterly closings, securities filings, and other required financial disclosures.

Upgrading from Excel to Cloud-Based FP&A

One of the benefits of moving from on-premises or cloud-based spreadsheet software to true financial planning systems such as Oracle PBCS is how painless the transition is. Oracle PBCS features intelligent deployment, which will warn you if you’re trying to structure something that violates best practices.

PBCS’s flexible deployment can accommodate 10 users as well as 10,000 users. The software includes built-in help with templates, migration, diagnostics, process flows, and alerts. It has great file transfer capabilities that let you move data quickly from on-premises to the cloud. And it offers great data integration, with Excel, of course, but also with any other Oracle cloud application.

If you are ready to upgrade to a serious EPM system, Datavail’s experts are available to help assess, plan, and execute your move to the cloud. If you’ve never been to the cloud and you are curious how much the migration would cost, how long it would take, and what results you can expect, contact Datavail today for a free consultation.

Datavail is a specialized IT services company focused on Data Management with solutions in BI/DW, analytics, database administration, custom application development, and enterprise applications. We provide both professional and managed services delivered via our global delivery model, focused on Microsoft, Oracle and other leading technologies.

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