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Advice and Information for Finance Professionals

Planning and Budgeting with Strategic Modeling: A Match Made in Heaven

Guest Author

By Andy Starks, Practice Director, Edgewater Ranzal

Most finance professionals recognize that operational and strategic planning are equally important. However, investments in one area often mean that the other gets shortchanged—especially when it comes to technology. There are only so many resources available, and a focus on improving operational planning sometimes means that improvements in strategic planning get set aside until more money becomes available—or vice versa.

At least, that’s how it has often worked in the past. Today, finance teams have the option of investing in both areas at once—if you choose the right cloud from the right provider.

What is Enterprise Planning?

Enterprise planning can be defined as a methodology (backed by technology) that helps an organization create and link its strategic, financial, and operational plans into a single cohesive system. The process should be used to facilitate the setting of goals, the generation of plans guided by those goals, and the monitoring of results, with the ability to update plans quickly as conditions on the ground change.

To hold true to the definition above, both operational and strategic objectives need to be addressed.

Until recently, planning and budgeting software focused mainly on the more detailed, short-term, operational planning piece of this equation. There were some purpose-built applications available to tackle the unique nature of things like workforce, capital, and project planning, but they lacked the robust functionality to truly handle the strategic planning components, which require an emphasis on full financial statement planning.

As a result, users were often forced back into Excel to evaluate strategic decisions that have long-term cost, revenue, and/or capital implications. In addition, the ability to look at valuation, detailed capital structure optimization, covenants, and full cash flow impact—all of which require a robust balance sheet and cash flow modeling capability—was also pushed out into disparate spreadsheets.

Enter Strategic Modeling

This is precisely where strategic modeling comes into play, rounding out the other half of the enterprise planning equation.

The good news is Oracle Planning and Budgeting Cloud is now available with strategic modeling capabilities built into the application. With a single system, finance can execute both operational and strategic planning in a streamlined, cost-effective manner. This adds value to the planning process and, ultimately, maximizes return on investment.

With the addition of strategic modeling, users now have a true enterprise planning solution with integrated financial statements, robust modeling features focused on capital structure optimization, valuation analysis, and M&A modeling.

The Right Tool for the Right Job

One of our mantras at Ranzal has always been, “The right tool for the right job.” We don’t believe in burdening a system or application with something that it wasn’t meant to do.

By including strategic modeling within Oracle Enterprise Planning and Budgeting Cloud at no additional cost, Oracle has made it infinitely easier for users to evaluate each business process—ranging from detailed cost center expense budgeting, to capital planning, to long-term financial forecasting—and, ultimately, select the right purpose-built tool for the job.

For more information on this “match made in heaven,” watch our webinar.

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