Improving Agility in Planning and Forecasting

Performance management

In the recent webcast, How Finance Leaders Plan and Forecast with Agility, a survey highlighted that nearly 55 percent of respondents see planning and budgeting as their primary EPM priority.

Yet, despite that goal, an astounding 57 percent of respondents were still relying on Excel as their primary budgeting approach, even though it provides low agility and accuracy. In the webcast, the panelist dug deep to unearth the best tactics for achieving optimal agility in the planning and forecasting process.

Watch the Webinar Replay

The Biggest Challenges in Budgeting and Planning

The budgeting and planning process is unique to each business, but there is scarcely a company that hasn't faced at least some challenges. Janet Golla, the Vice President of Planning and Analysis at Capitol Petroleum Group, says the biggest challenge her team has faced pertains to the volatility of petroleum marketplace.

Since the petroleum industry is dependent on fuel for profit, and fuel prices fluctuate rapidly, it makes it incredibly difficult to accurately model their gross budget. Another challenge they had stemmed from the use of spreadsheets. In spreadsheets, their budget consolidation process took days to complete, requiring too much manual labor. Now they rely on a cloud-based Enterprise Performance Management (EPM) solution for their budgeting, which has streamlined the process considerably.

Best Practices for Shortening the Annual Budgeting Process

As Golla noted, the budgeting process can take much longer than needed, especially if a business is relying on spreadsheets alone. Fortunately, there are some best practices that can be implemented to streamline the process. Jim Perry, Senior Manager of Finance and Business Intelligence at iCIMS, outlined some of the best practices his company has found for speeding up the budgeting and planning process, while ensuring high levels of accuracy.

He says the most important thing to keep in mind is to "do your homework all term so you don't need to cram for the final exam." By ensuring periodic forecasts are carefully created and reviewed to ensure accuracy throughout the year, they can enjoy a much smoother budgeting process, as the budget can rely partially on past forecasts.

Performance management

Streamline Budgeting and Planning with Cloud-Based EPM

While all three panelists outlined an array of challenges with budgeting and planning, they all agreed cloud-based EPM has been a well-received solution at their companies. Cloud-based EPM can provide a lot of key functions, enabling businesses to gain greater accuracy and agility with finances, while streamlining and shortening the process.

At Capitol Petroleum Group, Golla says the asset management group has a very tight budget, so they utilize the EPM platform frequently. As a result, they've been able to increase the accessibility of information through the cloud-based platform. In turn, they experience greater agility that allows them to make more informed business decisions by having all the data they need immediately available to them.

Using Rolling Forecasts to Update Budget Assumptions

Rolling forecasts have the ability to substantially increase the agility of budgets by enabling the business to update the budget plan regularly. Perry at iCIMS says his team is fond of rolling forecasts, and they use them daily for various operational aspects. According to Perry, virtually as soon as a budget has been finalized, it's no longer relevant because so much in the economy or business will have changed. As such, rolling forecasts are the most practical solution, as it enables his business to change assumptions on a whim to respond to economic or industry fluctuations.

Tools and Techniques to Handle What-If Scenario Modeling

What-if scenario modeling is an essential aspect of budgeting, but it can also be the most challenging. To simplify things, Derek Hazelwood, a financial analyst of Interactive Intelligence, says his team also relies on cloud-based EPM software. It has built-in scenario management functions that simplify the process. The software provides his team a framework for creating multiple scenarios, thus giving them the freedom to put unlimited imagination into their modeling.

Planning and forecasting is no easy process. Due to the innumerable financial variables that businesses face, achieving financial accuracy is a constant challenge. Yet, with the right cloud-based EPM software, businesses can reduce the burden of forecasting significantly, while increasing their agility and accuracy.

To learn more, watch the complete webcast, How Finance Leaders Plan and Forecast with Agility. Then take a moment to view a demo to see Host Analytics at work. You can enjoy a modern approach to finance as you reduce reliance on spreadsheets and increase the efficiency and accuracy of planning and reporting.

Watch the Webinar Replay

Posted by on August 24, 2016
Topics: Planning
Nick Ezzo

As Vice President of Demand Generation, Nick provides digital marketing and demand generation leadership to Host Analytics, the leader in cloud-based financial applications including planning, close, reporting and analytics. Nick has held marketing, business development, and consulting roles in companies like HBO, Nuance, Equilar, and Aspect Communications. Nick holds a Bachelor of Science in Communications from Ohio University, Athens, Ohio.

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