Making Financial Performance Management Real

Greg Ferenc Nagy
Solution Specialist IBM Cognos, AT/EE, CIS/Russia
Session Objectives
 After this session, you will be able:
• To discuss the role of Financial Performance
Management in today„s business environment
• To identify the value that Financial Performance
Management can bring to the organization
• To obtain insights into how to structure a
Performance Management program and how to
leverage the right Cognos resources
Does this sound familiar?
Spreadsheets Failing
“there have been well-documented cases of errors
and losses resulting from spreadsheet
manipulation errors and accidents.”
Source: Gartner, August 2007
Disparate Systems
“Average finance organizations operate
11 finance systems per billion dollars
of revenue.”
Source: Hackett Group, 2007
Business Risks
“62 percent of enterprises …
encountered a major risk event … 42 % of these
enterprises were not well prepared for the event.”
Source: IBM Global CFO Study 2008
The Monthly Maze
FPM as the GPS
Finance Function Makes a Difference
Driving Performance
“68% anticipate serving as the performance
management experts for the rest of the company.”
Source: CFO Research, Feb 2008
…Enterprise Rewards
“ World-class EPM organizations
deliver 2.4 times the equity market
returns of industry-peers companies.”
Source: Hackett Group, 2008
…with Professional Upside
“Corporate performance and CFO performance are
inextricably linked; CFOs that deliver shareholder
value are most likely to achieve the next career step
they desire.”
Source: CFO Executive Board, Strategies
for Inflecting CFO
Performance, 2004

Finance Function Makes a Difference
The majority have already started to enjoy practical rewards
Source: CFO Research, February 2008
Question:
How automated is
your company's
management of
business
performance?
HIGHLY
AUTOMATED
14%
PRIMARILY
MANUAL
32%
PARTIALLY
AUTOMATED
54%
68% have started to automate
Finance Function Makes a Difference
The majority have already started to enjoy practical rewards
C-SUITE
EXECUTIVES
BOARD/
INVESTORS
FINANCE
BUSINESS UNIT/
LINE MANAGERS
OTHER STAFF/
EMPLOYEES
0% 10% 20% 30% 40% 50% 60% 70%
Highly
Automated
Partially
Automated
Primarily
Manual
PERCENTAGE OF RESPONDENTS SAYING “VERY SATISFIED”
Question:
How satisfied are
each of these
constituencies with
the amount, utility,
and timeliness of
performance
management
available to them?
Highly automated companies report higher levels of satisfaction
with their performance management data
Source: CFO Research, February 2008
Folksam Insurance
Performance Pain
 60% of planning time spent collecting and
consolidating from SAP R/3 and other sources
 40% of planning time spent using
information for planning
Cognos Impact
 Reduced time spent collecting and
consolidating data to 15%
 85% of effort spent on productive,
future-oriented work
 750 daily users with access to
market trends, scenario
planning and forecasting,
revenue and cost statements,
and sales planning;
 New insight into operating
costs per cost center and
product, sales relative to
budget, and premiums paid
and disbursed insurance sums
Nucleus Research
www.nucleusresearch.com
Performance Management Roadmap
AUTOMATION
TRANSFORMATION
Performance Management Processes
• Enterprise Planning
• Financial Consolidation and Corporate Reporting
• Financial Analytics, Reporting, and Profitability Management
• Scorecarding and Strategy Management
Address Initial Needs
People
 Free up experts
 Engage casual users
Process
 Eliminate re-keying
 Enable process visibility
Technology
 Leverage familiar user
interfaces (Excel, Web)
 Implement workflow
Move Beyond
Spreadsheets
Cognos Advantages
 Structures and
automates all key
financial PM processes
 Delivers systems
“driven” by finance
Drive Best Practices
People
 Redeploy experts
 Rethink user communities
Process
 Rethink the horizons
 Drive Faster cycles
Technology
 Leverage common data
architecture
 Model non-financial
measures and metrics
Cognos Advantages
 Offers flexible systems
that support best
practices
 Provides know-how and
resources to support
transformation
Best Practices
Drive Best Practices
RESEARCH, CASE STUDIES, ARTICLES
MEMBERS AND PEER NETWORK / COMMUNITY ASSETS, RESOURCES, EVENTS
Steve Lukens
Global Leader,
Financial
Management,
IBM


David
Axson
President,
The Sonax
Group
Jeremy
Hope,
BBRT


Innovation Roundtables
Member Communities
Best Practices
Performance Blueprints
Wilfried
Lux,
FH Sankt
Gallen


Drive Best Practices
Blueprints
 Pre-defined data, process and policy model
 Reflecting Best Practices
 Integrated and aligned
 Enables rapid time-to-value
 Tried, Tested, Validated
 Flexible, open, smart
Drive Best Practices
Project Accelerator
Tangible
Best Practices
Smart Guide &
Head Start
Benchmarks
Drive Best Practices
PERFORMANCE BLUEPRINTS BY FUNCTION
Best-practice blueprints use planning, analytics, consolidation and BI capabilities
to address recurring financial and operational planning and management processes
 NEW! Strategic Finance
 Expense Planning & Control
 Revenue Planning & Forecasting
 Workforce Planning
 Capital & Initiative Planning
 …
 Management and Financial
Reporting (MFR)
 Close, Consolidate, Report (CCR)
 NEW! Group Consolidation and
Corporate Reporting (GCCR)
 …
Extend Enterprise-Wide
Financial Management
Expense
Management
Revenue
Management
Long Term Asset Management
Cognos Advantages
 Easily models and links
operational plans, analytics,
and metrics
 Supports rapid prototyping
 Provides know-how and
resources to support
transformation
New significant
customer
New Headcount Capital
Expenditures
Updated P&L
Adjusted Budget
Customer
Profitability
Beyond
Finance
Inventory
Management
Extend Enterprise-Wide
Top Planning Areas
From A Survey of 75 Cognos Customers
Beyond
Finance
67%
Finance
33%
Human
Resources
Sales Planning
Prod. & Distrib.
Marketing
Other
Financial
Statements
Expense
Planning
Capital
& Initiative
Extend Enterprise-Wide
PERFORMANCE BLUEPRINTS BY INDUSTRY
Best-practice blueprints that leverage PM capabilities by design to address
industry-specific performance management processes linked to competitive advantage
Financial Services
 Branch Performance
 Retail Banking Customer Segment
Performance
 Corporate Banking Customer Segment
Performance
 Product Performance for Insurance
 Risk-Adjusted Profitability for Banking (IBM)
Life Sciences
 Clinical Trial Planning
 Sample Optimization
Manufacturing
 Sales & Operations Planning
 Trade Promotion Management
 S&OP Executive Review
Retail
 Store Operations (P&L)
 Store Development
 Merchandise Planning
Government
 Program Objectives Mgt
Advancing Performance Management
People
 Lead culture change
 Develop competency
Process
 Improve process
linkages
Technology
 Span enterprise
systems; reconcile
“differences”


Cognos Advantages
 Provides all PM
capabilities
 Leverage all PM data
sources
 Supports development
of competency centers
GOALS &
STRATEGY
PEOPLE &
EXECUTION
SCORECARDS,
REPORTS, PLANS
& FORECASTS
GOALS &
STRATEGY
PEOPLE &
EXECUTION
SCORECARDS,
REPORTS, PLANS
& FORECASTS
Drive Performance
Performance Management System
Requirements
AUTOMATION
TRANSFORMATION
Performance Management Requirements
• Structure and Automate Core Processes
• Drive and Sustain Best Practices
• Report, Analyze, Model, Plan, and Score Enterprise-wide Performance
• Span all systems and connect management decision-making
Wrap Up and Next Steps
Get Started
 The Performance Manager Book
 Innovation Center for Performance Management
• Hackett
• David Axson
• Jeremy Hope
 Cognos Discovery and Validation Workshop
• David Norton
• Brett Knowles
• Larry Maisel
• Accenture
• Deloitte
• IBM
Why Cognos?
 Leader in Performance Management
• Focus and expertise
• Independent system
• Customer success
 Global Innovation Center for Performance
Management
 Functional and Industry Performance
Blueprints
 Global Services, Support, and Partner Network
 Global reach and resources of IBM