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Advice and Information for Finance Professionals

5 Things a Comprehensive Planning and Forecasting Solution Always Has

Guest Author

By Wayne Heather and Marc Seewald, Oracle

You may have heard that there are a lot of “imposter” EPM applications out there—that is, some providers promise that their enterprise performance management (EPM) applications can do more than they actually can. 

When it comes to planning and forecasting, having less-than-comprehensive capabilities can mean users spend more time setting up workflows and forms than doing quick-response, data-driven planning that supports business strategy.

Are your planning and forecasting applications as powerful as your business needs? To help you answer that question, compare them against these five attributes of comprehensive applications like those in Oracle EPM Cloud.

1. Built-in planning intelligence and best practice planning frameworks

Some vendors started their EPM platform as a consolidation system, or basic aggregation engine. So, by nature, they're missing typical features that are required for robust planning. For example:

  • They lack purpose-built capabilities for long-range planning (long range strategic plans have requirements that are unique from traditional bottoms-up planning) 
  • Predictive planning requires a third-party add-on (no native prediction capability)
  • Spreading features are not provided out of the box, instead they must be scripted
  • They lack the ability to do driver-based planning by any dimension
  • There is limited ability to do sandboxing and modeling

This, of course, doesn’t stop the vendor from positioning their EPM product in the market as a “planning” system. To mask the deficiencies in planning, they provide a scripting language (such as VB) and some sample starter kits. So, the demo looks nice, but be aware, what’s underneath the covers matters. Customers can't use the starter kits; in reality, they must build their planning solutions from scratch. This results in implementations that are substantially longer then necessary. Additionally, the customers that are forced to implement these kind of solutions in effect become software providers themselves, as they must hire expensive consultants to enhance their system in the future.

Oracle has taken a different approach. We’ve built in things like predictive planning, driver-based budgeting, robust what-if scenario modelling, sandboxing, bottom up-top down budgeting, approvals and workflows as best practices that you can start using right away. Likewise, we provide planning modules, such as long-range planning, workforce planning, capital asset, project financial planning, etc. These are not just demos or starter kits, but rather fully functioning modules that are designed to work together and are seamlessly integrated with existing customer-specific planning processes.

In short, with Oracle EPM Cloud, you don’t just get a repurposed consolidation engine, you get a true planning and budgeting platform that you simply configure to reflect your business. All the underlying budgeting, planning and forecasting best practices are delivered for you to consume as standard. This delivers more agility in your processes, reduces implementation costs significantly, and lets you focus on performing your planning process, not building it. 

2. Capabilities span finance, operations, and line-of-business planning

A truly comprehensive solution provides not just financial planning, but also operational planning and modeling to address lines of business such as HR (e.g. strategic workforce planning), IT (e.g. IT financial management), supply chain (e.g. IBP, or integrated business planning) and sales (e.g. territory & quota). Again, look for pre-built best practices for specific planning and forecasting processes across finance and lines of business. This should be  developed and maintained by the vendor, and not simply an add-on available in a "marketplace." 

You need a connected planning platform in the cloud where content is constantly being evolved through vendor innovation and then pushed out to users automatically. When addressing workforce planning, project financial planning, capital expenditure planning, sales and operations planning, ensure that you get best practice capabilities for these processes as standard, out-of-the-box capabilities. Make sure they are fully supported and will be constantly innovated upon by the vendor.

3. Users can perform large-scale, free-form modeling 

The demands of today’s fast-paced, agile business models require the ability to model financial and operational scenarios easily. A key capability behind this is the system’s ability to take in and process large volumes of data to be used in free-form modeling. Imposter planning engines, that started their life as a consolidation engine, will really struggle with large data sets, and will also struggle with giving users the flexibility required for true modeling.

Planning is an umbrella term that describes all kinds of business processes, but modeling tends to be done on an individual basis as a person reviews what-if scenarios to make the best decision when presented with several options. Ideally, this is taking place all the time across an enterprise, so that people in all lines of business are always making informed decisions with quality data. But it takes a powerful back-end engine to handle the vast amount of data that businesses use for such analytics today. This is a must-have for a planning and forecasting solution to live up to promises about ad-hoc modeling.

Make sure scalability across large volumes of data and users can be easily handled. 

4. Robust management reporting

Reporting can be a catch phrase for doing a lot of different things. You might want to do ad-hoc analysis, slicing and dicing your data. You might just want to use a standard dashboard for status updates. You probably still require a standard pack of pixel-perfect reports that can easily be printed. And most organizations are looking to modernize and streamline their management reporting by adding collaborative narrative elements when preparing their reporting packages. Make sure that planning systems can do all of these—not just as a demo, as with imposter planning systems.

A comprehensive EPM planning solution should make all of this possible via browsers, mobile devices and other familiar tools. All reporting requirements from complex budget books, with narrative through to ad-hoc analysis, should be available in spreadsheet interfaces that finance professionals are familiar with and can easily use. This kind of flexibility is important because the fast-changing nature of global business requires a lot of ad-hoc analysis. For example, currency fluctuations related to Brexit are having ongoing impact on companies that do business in the U.K. 

No solution can anticipate all of the questions that will arise in business planning, so it’s important that users can quickly delve into that data, and be able to answer questions with fast ad hoc queries, and then collaboratively develop management reports without compromising integrity and security of data.

5. The vendor is making big investments in emerging technologies

Emerging technologies, such as machine learning, are quickly changing business practices. Through the use of data science, predictive analytics can uncover correlations, outliers or exceptions that a person alone wouldn’t be able to recognize. It can materially improve the accuracy of planning and greatly reduce time spent in planning processes.

Emerging tech truly will transform the way finance does its job over the next several years. However, the R&D investments required to bring this technology to an EPM platform is very expensive. Imposter planning systems will talk the talk, but are they walking the walk? Are they making the necessary investments to keep a competitive edge for your finance function?

At Oracle, we are leveraging our economies of scale to bring the latest emerging technology to your finance function. Innovations like Monte Carlo simulation for planning is a good example. This a data science-based approach that allows you to de-risk your planning models by better understanding the impacts of the important variables on plan outcomes. Predictive planning is another good example. By leveraging predictive algorithms, you not only have the opportunity to increase accuracy and speed, but you can remove bias and improve the objectivity of the planning process.

These are just some examples of the existing emerging tech already built into Oracle EPM Cloud. Oracle continues to invest heavily in these game-changing technologies. Don’t fall for the “talk” from imposter planning vendors. 

Take planning and forecasting to the next level

If you decide your planning and forecasting applications just don’t deliver anymore, the good news is that Oracle’s flexible solution provides a variety of options to start improving. Make sure you do your homework on the 5 areas of planning that every vendor should have.

Download the buyers' guide, "Future-Ready EPM: The Essential Features of an Optimal Solution."

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