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 todays 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