By Mike Martin, Director, Strategic Cloud Services, Baker Tilly
Times were good, revenue growth was climbing, hiring was like clockwork, and prosperity seemed as if it would never end. There were signals of a slowdown, then a possible recession, but we didn’t expect a global pandemic to begin the year. So, now what?
If your organization ran models and had a financial plan in place for a downturn, perhaps you’re more prepared to make well thought-out critical decisions. If not, let’s look at five examples where enterprise performance management (EPM) software can give your organization the power and visibility it needs to navigate these times of economic uncertainty, and why it’s a perfect time to consider investing in a solution.
Ideally, you’ve already worked through a variety of scenarios for your organization, ranging from best-case to worst. Maybe you’ve even mapped out a plan for “in case of” scenarios. As we’ve seen, recessions happen fast, and quick decisions need to be made. Being prepared can help you make rational decisions before you’re in the depths of a crisis. Having a plan in place can be the difference between not knowing what to do versus making the right critical decisions confidently and accurately.
EPM software can help do exactly that. It can help ensure you have a plan in place for what’s next. Oracle Cloud EPM provides best practices for planning and scenario modeling right out of the box. You can forecast, plan, run what-if scenarios and model your business trajectory in real time. This means no more waiting for IT to run reports to get the information you need to make timely decisions—or working with spreadsheets that can easily break. In the current economic environment, making the right decisions quickly is more important than ever.
The most vital blood line of your organization is cash. We've all heard the expression “cash is king.” When revenue drops, knowing your cash flow options is critical.
You need to be able to make decisions quickly, accurately and thoughtfully. This applies to many areas, including: modeling operational cash flow, determining which financial vehicles to leverage during times of crisis, and/or raising investment capital for M&A.
Many organizations try to model cash flow in Excel, but this can be error prone and time-consuming, resulting in a maintenance nightmare. The same is true for systems based on custom calculations. In contrast, Oracle Cloud EPM provides true out-of-the-box models for the majority of your cash flow drivers, models, and reports, which helps you make speedy, accurate decisions in this critical time and makes it easy to maintain custom calculations.
The strategic modeling capabilities in Oracle Cloud EPM help you rapidly analyze vital cash flow. This is ideal for what-if modeling of business risks, simulation of long-term alternative strategies, stress testing of financial models, development of contingent scenarios, or even modeling how to fund M&A opportunities. You can easily run various scenarios at different levels of granularity, giving you much better capabilities than trying to manage these models with spreadsheets. Baker Tilly customers have used this functionality to renegotiate more favorable terms on debt covenants, refinance debt, model hedging strategies, determine M&A options, decide whether to dissolve unprofitable revenue segments, and reinvest in creating new business lines.
Oracle’s strategic modeling capabilities are the most powerful tools available to help you make quick, game-changing decisions accurately and confidently during difficult times.
Oracle Cloud EPM offers out-of-the-box driver-based modeling, trend-based planning, and predictive analytics built right into the solution. This helps your planners to quickly update their plans. From conducting what-if analyses using numerous versioning options, or simply entering sales numbers, your knowledge workers across the business can easily input their key metrics. This helps you get accurate reports and insight so you can confidently make decisions at the speed of business.
Another vital part of your organization is your workforce. Often it’s the most expensive and important line on your P&L. Modeling how to fully maximize your workforce will be key to a successful recovery. Understanding the skill sets, availability and mobility of your resources and candidates could mean the difference in not only mitigating financial impact, but also maximizing recovery and productivity. Utilizing an EPM solution for strategic workforce planning will ensure you have the right supply of people to meet demand, now and in the future.
We’re currently in a time of crisis, but we must be poised for a time of recovery. EPM can help your organization understand how to navigate this crisis by giving you insights into your cash flow and helping you prepare your workforce for what’s next.