Operational & Financial Planning
Greg Ferenc Nagy, IBM Cognos, AT/EE, CIS/Russia

and forecasting process  Leading companies are adopting best-practices and moving performance management beyond finance. . budgeting.Session Objectives Purpose of this session is to describe how:  Improving performance management requires more than automation of the existing planning.  IBM Cognos can help you reduce the time and risk to drive greater business value.

TODAY’S PERFORMANCE MANAGEMENT SYSTEMS  Designed in 1930’s when market volatility was low   When companies could ‘ship everything they produced’ Management practices: • Detailed. top-down annual budgets • Infrequent forecasts • Not linked to business drivers nor operational plans • Not linked to strategic objectives • Not linked to market events .

SPEED AND VARIABILITY ARE INCREASING Results:  Resources not optimized  Long time delays  Missed revenue and profit opportunities .

COMPANIES NEED TO SYNCHRONIZE FINANCIAL & OPERATIONAL DOMAINS FINANCIAL  Corporate Planning Strategic Planning Target Setting Operational Planning Financial Planning Reporting Forecasting  EPS. quality. market share. growth…  Corporate Reporting and Analysis SALES & MKTG HR IT OPERATIONS  Sales Forecasting  Qualification/close  Headcount Planning  Attrition rate  IT Portfolio Planning  ROI/TCO Analysis  Demand Planning  Stock-outs  Promotions planning  Resource effectiveness analysis  Shared Services Planning  Throughput analysis OPERATIONAL .

ENTERPRISE PLANNING ALIGNS CORPORATE OBJECTIVES… MARKETING EXECUTIVE MANAGEMENT SALES with operating plans linked to market events and operational drivers PRODUCTION AND DISTRIBUTION FINANCE PURCHASING CUSTOMER SERVICE TECHNOLOGY IT/R&D HUMAN RESOURCES .

Financial Performance Management Challenges Spreadsheets Failing  “there have been well-documented cases of errors and losses resulting from spreadsheet manipulation errors and accidents. 2007 Business Risks  “62 percent of enterprises … encountered a major risk event … 42 percent of these enterprises were not well prepared for the event.” Source: Gartner.” Source: Hackett Group.” Source: IBM Global CFO Study 2008 . August 2007 Disparate Systems  “Average finance organizations operate 11 finance systems per billion dollars of revenue.

confident resource allocation decision-making. Better. PLANS & FORECASTSReliable Forecasts Top-Down & Bottom-Up Alignment Connected Planning Models IMPACT: Timely. reliable forecasts & plans that align operational tactics with financial targets. .Benefits of IBM Cognos Solutions Timely.

Reporting and Analysis PLANS & FORECASTS Collaborative Plan & Forecast Emphasis on user experience. Allocations. auditability and process control .IBM Cognos Solutions for Enterprise Planning Pre and Post-Planning Alternative hierarchies. workflow.

CUSTOMERS USING IBM COGNOS ENTERPRISE PLANNING SOLUTIONS RETAIL PHARMA/ HEALTHCARE FINANCIAL SERVICES MANUFACTURING .

CUSTOMERS USING IBM COGNOS ENTERPRISE PLANNING SOLUTIONS ENERGY PROFESSIONAL SERVICES CONSUMER GOODS FOOD & BEVERAGE TELECOMMUNICATIONS PUBLIC SECTOR .

IBM COGNOS PLANNING CUSTOMERS & THEIR PRIMARY DATA SOURCES Essbase .

IBM Cognos Solutions   Replaces spreadsheet-only processes Engages the whole organization to make better informed decisions Replaces rigid. annual budgeting with continuous planning for higher responsiveness Supports best practices such as drive based planning and rolling forecasts Connects operations and finance    Cognos 8 Planning Cognos TM1 Performance Blueprints .

trending .ENTERPRISE PLANNING Cognos 8 Planning and TM1 Post-Planning Goal seeking. Allocations High Participation Plan & Forecast Pre-Planning Analytics Alternative hierarchies.

TRANSFORMATION ---------------------------- 1 ADDRESS Initial Needs 2 DRIVE Best Practices 3 EXTEND EnterpriseWide 4 ADVANCE Performance Management Embrace and Extend Your Existing Infrastructure .PERFORMANCE MANAGEMENT ROADMAP AUTOMATION ---------------------------------.

Excel 100% Web : Consumption Integration with Cognos PM portal Integrated EXCEL capabilities Centralized Control and Management Central application management – process. deployment. security .Automating the Planning Process With Cognos Planning & TM1 4 Centralized Modeling Approach Familiar Environments Web.

TRANSFORMATION ---------------------------- 1 ADDRESS Initial Needs 2 DRIVE Best Practices 3 EXTEND EnterpriseWide 4 ADVANCE Performance Management Support Best Practices  DRIVER BASED PLANNING  ROLLING FORECASTS  TIMEFRAME-APPROPRIATE Cognos Innovation Center Performance Blueprints PLANS  HIGH PARTICIPATION  A WIDER / DEEPER VIEW .DRIVE BEST PRACTICES AUTOMATION ---------------------------------.

EVENTS Business Content Customer Forums Strategy Development Performance Blueprints MEMBERS AND PEER NETWORK / COMMUNITY … .TRANSFORMATION ---------------------------- 1 ADDRESS Initial Needs 2 DRIVE Best Practices 3 EXTEND EnterpriseWide 4 PM for Strategy Execution RESEARCH. CASE STUDIES. RESOURCES.BEST-PRACTICE THOUGHT LEADERSHIP AUTOMATION ---------------------------------. PUBLICATIONS Axson Sonax Hope BBRT Roth Hackett Norton BSCol ASSETS.

ETC. MARKETING. STRATEGIC FINANCIAL PLANNING & FORECASTING Revenue Plan SALES PLANNING & FORECASTING HUMAN RESOURCES WORKFORCE PLANNING Depreciation Expenses EXPENSE PLANNING & CONTROL Headcount & Compensation Expenses .Enterprise Planning Performance Blueprints: Functional Solutions Market Demand Pre-configured solution building blocks that: • • • Pool collective best-practice knowledge Accelerate time-to-value Increase project success rate FINANCE Reports  Income Statements Balance Sheet  Cash flow  Financial Ratios SALES FUNCTIONAL SOLUTIONS  Strategic Financial Planning & Forecasting  Strategic Long Range Planning  Risk Analysis  Sales Planning & Forecasting  Sales Compensation Planning  Workforce Planning  Expense Planning & Control  Allocations  Capital Project Planning  Discretionary Capital Expenditure  Initiative Planning Operating Expenses CAPITAL EXPENDITURE PLANNING Cap Ex OPERATIONS.

EXTEND Enterprise .TRANSFORMATION ---------------------------- 1 ADDRESS Initial Needs 2 DRIVE Best Practices 3 EXTEND EnterpriseWide 4 ADVANCE Performance Management Model the Whole Business Cognos Solution Map Industry Performance Blueprints Financial Services Retail Public Sector Manufacturing  Link operational plans to financial plans  Increase forecast reliability  Performance Blueprints accelerate implementations Life Sciences .Wide AUTOMATION ---------------------------------.

Extend Enterprise Wide Continued Investment in Industry Blueprints Manufacturing  Trade Promotion Management  S&OP Executive Review   Sales & Operations Planning Transportation and Logistics Performance Pharmaceuticals & Life Sciences     Public Sector  Program Objective Memorandum (POM)  Grant Thornton & Cognos Federal Budget Planning & Performance Framework – Business Partner BearingPoint POM Budget Planning – Business Partner • Higher Ed Performance • Mayor’s Scorecard Retail  Store Operations  Store Development  Promotion Planning  Merchandising Performance Management  Retail Financial Workbench  Clinical Trial Planning Samples Optimization (Joint w/ TM1) Clinical Trial Enrollment Forecasting Sales Quota Allocations Banking & Financial Services       Retail Branch Performance Retail Banking Customer Segment Performance Corporate Banking Customer Segment Performance Insurance Product Profitability Cognos & IBM Risk Adjusted Profitability for Banking – Business Partner BP Loan Pricing .

ADVANCE PERFORMANCE MANAGEMENT AUTOMATION ---------------------------------.TRANSFORMATION ---------------------------- 1 ADDRESS Initial Needs 2 DRIVE Best Practices 3 EXTEND EnterpriseWide 4 ADVANCE Performance Management Pervasive Performance Management Cognos Performance Management Platform Continuous Business Alignment .

analysis and optimization domain . forecasting.Summary  Cognos Planning and Cognos TM1 complement each other and each contributes to a complete Enterprise planning solution  TOGETHER they serve all requirements across the enterprise planning.

Key Principles   Structure and automate the process • Keep Finance in the driver’s seat Adopt Best-Practices • Driver-based planning • Rolling Forecasts • Engage all the right people • Forecast frequently Radiate Beyond Finance • Synchronize financial and operational plans Performance Management for Strategy Execution • Link strategic objectives to the resource allocation process   .

THANK YOU .

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