Financial Consolidations,Planning and Reporting Optimization

© 2011 Proformative. Proprietary and confidential

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Learning Objectives

After participating in this event you will be able to:

• Define how to successfully expand your accounting and financial reporting to cover your growing business

• Associate tools, services and options for managing accounting and FP&A for your multi-entity, global company

• Define how your systems and operations directly effect profitability and outcomes for your global company

• Hear success stories from finance and accounting executives who took their global organizations to new heights in effectiveness and ROI

THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

Paul Turner

Senior Director, NetSuite

Global Business Management

Accelerating Financial Consolidation and Achieving Transparency


Your customers and employees are spread around the globe

Complex currency translation and revaluation

Large #’s of intercompany and minority interest eliminations

Complex local tax compliance (Sales Tax, GST/PST, VAT, etc.)

Increasing need for audit trail

Scant local IT resources

Supporting Today’s Global Business

1

2

3

4

5

6


Substantial Local and Global Change

Greater need for business visibility

Local sales tax changes

Geographical regulatory

change

Mergers and acquisitions

Shrinking IT resources

Launching new subs and geos

New billing models

New Revenue Recognition Models


Australia

REG

IO

N

GLO

BA

L

AMERICAS EMEA APAC

Worldwide HQ

Canada USA Brazil France Germany Japan China UK

CO

UN

TR

Y

Multiple Systems Strain Finance Resources


Lengthy cycle to roll up financial results from subsidiaries

Lack of visibility into subsidiary’s financials

Lack of confidence in financial data for corp and subs

Error-prone, inefficient, time-consuming manual processes

“Siloed” meaning no 360° view of corporate performance

Onerous local accounting, tax and compliance requirements

Error prone managing currency exchange rates with historical

accuracy

What It Means:


Visibility is the Missing Link in Today’s ERP


NetSuite’s Global Business Environment

Publicly traded on New York Stock Exchange (“NYSE”)

$190M+ revenues; 10,000+ orgs in 20+ countries

1,300+ employees with offices in 9 countries

10+ subsidiaries (not all are cost centers)

1,500+ orders processed a month

Operations staffed internationally

Majority of finance/accounting resources outside US


How NetSuite Runs Its Global Business

11

Manage the Entire Business in the Cloud Lead => Estimate => Sales Order => Billing => Financial Reporting

Single System, Single Database No data warehouse

All 1,300+ employees log into the same system Access to information from any location - only limited by role

Real-Time Consolidated Data Full drill-down => from financial statements to individual tx’s

Multi-Dimensional Consolidation Worldwide, Regional and Country views

Local Control, Global Roll-up Localized UI and currency

Regional and global visibility in-context

AMERICAS APAC EMEA

Worldwide HQ

ECOMMERCE CRM+

FINANCIALS

SINGLE DATA

SOURCE

Global Cloud ERP: One Shared Data Source


The Secret for an Efficient

Consolidation Process

Real time financial consolidation and transparency

Easy web access to all parent and subsidiary data

Multidimensional reporting - worldwide, regional, country

Country specific financial and regulatory compliance

Calculation and payment of local taxes in the local currency

Single chart of accounts or custom per subsidiary

Intercompany journal entries posted from a single screen

Automate cumulative translation adjustments

Ability to drill down to each account for audit

Automate period end revaluation

Simplified accounting close process and complete audit trail


Cloud Apps Make Global

Business Management Easier

Mobility Distributed workforce, outsourcing, contingent workers, any device

Self-Service Submit web based time and expenses and purchase requests via the web

Self-serve customers, vendors, partners

Visibility Real-time role based dashboards,

Self-service reporting and analytics

Personalized


Reporting from a Global View….


Reporting the Subsidiary Perspective…


Improved Reporting: At the Customer Level

Cloud Playing an Increasing

Role in ERP Deployments…….


• Launched 2008

• 7,000+ employees

• 20m+ Groupons sold

• 45+ countries

• 500+ cities

• +1 country every 3 weeks

For Example….

Fastest Growing Company in History


Challenges

Managing hyper growth

Great Plains & Sage

Non-integrated

Data integrity

Spreadsheets

Manual process


49 countries

Project Goals

12 months

100% cloud

One system


Australia

Korea

Netherlands

New Zealand

Thailand

Israel

South Africa

Turkey

Emirates

Argentina

Chile

Colombia

Mexico

Peru

Uruguay

Japan

Hong Kong

India

Malaysia

Philippines

Singapore

Taiwan

Austria

Switzerland

5 Countries in 6 Weeks, 26 Countries in 3 Months, 49 Countries by Year End 2011

Global ERP at “Groupon Speed”


Foundation for Groupon velocity

Instant financial consolidation

Multi-currency, multi-language, multi-tax

Eliminated spreadsheets

Self service reporting

Resources on growth, not operations

Results


Is Cloud Right for You?

Viability + Customization is Key

© 2011 Proformative. Proprietary and confidential 25

Cloud Global Business Management Can Transform Finance Performance

Global Cloud ERP enables you to:

Stay abreast of latest accounting changes

Scale a distributed finance organization

Achieve real time consolidation and detailed visibility

Ensure subsidiary customization and control

Grow without local IT resources

Reallocate IT budget from maintenance to innovation


Thank You


Polling Question

THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

Tracy Schreiber

Director, Product Marketing

Adaptive Planning

Planning and Reporting Best Practices


Agenda

• Expectations of Today’s CFO

and Finance

• What You Need to Get There

• Planning and Reporting Best

Practices

• Technology


Stage Transaction Controlling the Planning & Integrated Functional Management Business Analysis Excellence Role Bean Counters Process Managers Business Partners Value Managers Key Capabilities Challenge Number of Consistent process Talent and insight Leadership and transactions excellence into valuable drivers performance management

Finance Organization Vision

Expectations have increased for Finance organizations

• Dominated by reporting and compliance functions

• Focused on process and risk minimization

• Focused on decision support

• Provides sound financial analysis to management for making financial and operating decisions

• Integral part of management team to support value/wealth creation

• Identifies opportunities and provides critical information and analysis to make superior operating and strategic decisions

• Financial accounting

• Management reporting

• Tax

• Audit

• Treasury

• Performance management

• Analysis

• Superior decision support to invest wisely

• Business Development

• Enterprise risk management

Source: McKinsey & Company

1 2 3 4


CFO Leadership &

Performance Management Maturity


Low

er

Hig

her

Le

ade

rsh

ip

Higher Lower

Stage 1: Bean Counters

Stage 2: Process Managers

Stage 3: Planning & Analysis

Stage 4: Integrated Functional Excellence


Obstacles – Does This Sound Familiar?

1. Managers deluged with data, metrics and reports that

provide little value – can’t see the forest for the trees

2. Wasted time, managing to budgets and reports instead of

managing business – this has huge cost

3. Or, no participation from managers at all – lost

opportunity

4. Poor service to business managers from finance –

managers don’t get the information they need, when they

need it

5. Ineffective use of technology – spreadsheets


Corporate Performance Management (CPM)

Integrated

Performance

Management

Continuous Cycle

• Best Practices

• Supported by the right

technology


The Right Technology

• Not Spreadsheets

– Inefficient

– Error-Prone

– Inefficient

– Prevent adoption of best practices

• Not Large On-Premise CPM Applications

– Expensive

– Complex

– Long deployment time

– Huge IT involvement


Cloud-Based SaaS is Mainstream for Business

“SaaS is now commonplace and having a very real impact on IT. Users should not wait but should explore cloud and SaaS

opportunities from new vendors.” Gartner

Worldwide SaaS Market Growth 2007-2012

CA

GR

On-Premise

ERP, SCM, HCM, CRM, PLM

SaaS

ERP, SCM, HCM, CRM, PLM

Source: AMR Research


SaaS Delivers Significant Advantages

On-Premise Model Cloud-Based Model

High upfront cost Low annual subscriptions

Need new HW and SW Does not need new HW or SW

Implement in months/years Implement in weeks

IT support needed (initial & ongoing) No IT involvement required

High risk: big upfront purchase Low risk: can cancel at any time

High overall TCO Low overall TCO

New releases every 1 – 2 years New releases 4x per year

Time consuming, costly upgrades Automatic, disruption-free upgrades

Designed for techie users Designed for business users

Difficult to try before buying Immediate trial – try before you buy


Allow Finance to build better plans and make room for higher-value work than

formatting and troubleshooting spreadsheets

• Driver-based and assumption-based planning

• Integrated financial statements

• Automated workflow & audit trail

• Automated consolidation, across worldwide entities & currencies

• Centralized database with tight integration with other enterprise systems

• Version control

• Reports, dashboards, KPIs, scorecards with real-time data

• Easy to use; no programming skills required

Provide true value to managers, elevate value of Finance,

lighten reporting load for the entire organization

Purpose-Built Planning & Reporting

Application


CPM Best Practices

1. Deliver timely and accurate

dashboards, KPIs and

reports

2. Re-forecast frequently

3. Create driver-based plans

4. Perform what-if analysis

5. Drive enterprise-wide

collaboration


Stage Transaction Controlling the Planning & Integrated Functional Management Business Analysis Excellence Role Bean Counters Process Managers Business Partners Value Managers Key Capabilities Challenge Number of Consistent process Talent and insight Leadership and transactions excellence into valuable drivers performance management

Finance Organization Vision

Expectations have increased for Finance organizations

• Dominated by reporting and compliance functions

• Focused on process and risk minimization

• Focused on decision support

• Provides sound financial analysis to management for making financial and operating decisions

• Integral part of management team to support value/wealth creation

• Identifies opportunities and provides critical information and analysis to make superior operating and strategic decisions

• Financial accounting

• Management reporting

• Tax

• Audit

• Treasury

• Performance management

• Analysis

• Superior decision support to invest wisely

• Business Development

• Enterprise risk management

Source: McKinsey & Company

1 2 3 4


CPM Best Practices

to Improve Processes and Reporting



reports





collaboration


Best Practice #1:

Timely and Accurate Dashboards, KPIs & Reports

• Integrate actual data from other enterprise applications (or just

your GL)

• Import data easily and frequently

• Use drag-and-drop report builder to create variance reports,

month-end management and board packs

• Give managers dashboards to analyze results

Make budget managers more autonomous and efficient with self-service reporting tools, and free finance for higher-value

added activities


CFO Leadership &



Low

er

Hig

her

Le

ade

rsh

ip

Higher Lower




Stage 3: Business Partners

– Planning & analysis

– Focused on decision support; provide sound financial analysis to management

– Capabilities include performance management

– Challenge = insight into valuable drivers


CPM Best Practices

to Improve Planning & Analysis



reports





collaboration


Source: Beyond Budgeting Roundtable (BBRT)

At what point do you expect your annual budget

targets to become obsolete?


Best Practice #2:

Re-Forecast Frequently

• Continual rolling forecasts for improved validity and

better decision-making

• React to changing conditions

– Market

– External factors

– Internal factors

• Ensure that forecasts do not become unrealistic over

time

Make better decisions, more quickly


Best Practice #3:

Create Driver-Based Plans

• Calculate revenue, expenses, balance sheet and cash

flow using key assumptions

• Focus planning process on controllable activities

• Create plans that are integrated across functions

• Free managers from focusing on minute details in

planning

• Results in model that can be easily updated for what-if

scenario analysis

Drive more accurate plans, and free finance and managers for higher-value activities


Best Practice #4:

Perform What-If Analysis

Perform what-if scenarios and change analysis before finalizing plans

Be prepared for all occurrences

Consider factors with huge implications on plans

Predict effects of key events

Preparedness makes a big difference in the success of your business


CFO Leadership &



Low

er

Hig

her

Le

ade

rsh

ip

Higher Lower




Stage 4: Integrated Functional Excellence

Stage 4: Value Managers

– Integrated Functional Excellence

– Integral part of management team; identifies opportunities and provides critical information & analysis

– Capabilities include superior decision support

– Challenge = leadership & performance management


CPM Best Practices

to Improve Planning & Analysis



reports





collaboration


Best Practice #6:

Drive Enterprise-Wide Collaboration

• Involve more people in the process

• Consider viewpoint of all functions

• Lower-level employees can have visibility that

executives do not have

• Make it easy for your managers to participate

– Clear process

– Easy-to-learn tool

– Customized to fit their business

More people involved in the process results in better insight into the business, and more accurate plans.


• Finance can earn its place at the strategy table

– Deliver value-added services and performance improvement

insights

• Liberate your managers

– Free them from detailed annual planning

– Replace budgets with continuous planning reviews

– Fast, frequent, relevant KPIs

Summary

Best practices + SaaS technology + purpose-built planning and reporting application =

effective corporate performance management


Thank You


Polling Question


Q & A


If you have questions about CPE Credit please contact

Tonya Walsh at [email protected]

We will send you a follow-up survey and would

appreciate your feedback.

Please join us at www.proformative.com to ask any

additional questions you may have and to continue

this conversation with your peers and the experts

you heard from today.

mailto:[email protected]

http://www.proformative.com/


Event Sponsor

Financial Consolidations,Planning and Reporting Optimization

Economy & Finance

Transcript of Financial Consolidations,Planning and Reporting Optimization