The Role of Process Owners in Successful EPM Implementations

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The Role of the Process Owner in Successful EPM Initiatives

Curtis Neumann CPA AT&T Corporate Finance Systems [email protected] www.curtisneumann.com

Financial Forecasting & Planning Summit

September 15, 2011 | InterContinental | Boston

mailto:[email protected]

The Roles of Process Owners in Successful EPM Initiatives [email protected]

Page Description Page Description

3 Presentation Purpose 17 4. PO Requirement Gathering & Design

4 Process Owners Organizational Structure 18 5. Research Vendor Options

5 Traditional Functional/Process Roles 19 6. Assess Current and Future Needs of

Options

6 Issues with Finance Going it Alone in

Implementations 20 7. Assess Improvement, Productivity & Cost

7 Issues with IT Going it Alone in Implementations

21 8. Prototype Tool

8 EPM Process Owner Defined 22 9. Make Purchase Decision

9 Process Owner Benefits to Finance 23 10. Develop Solution

10 Process Owner Benefits to Finance –

Cont’d 24 11. Process Owner Testing

11 Process Owner EPM Implementation

Case 25 12. Solution into Production

12 Process Owner Operational Model 26 The Process Owner Best Practice Approach

13 Process Owner Operational Model Cont’d 27 Q&A

14 1. Finance Process Strategy 28 Appendix A: The Finance Process Owner

owns EPM

15 2. Sponsorship Message to Key

Stakeholders 29 Curtis’ Blog

16 3. Process Owner Responsibilities

Much has been written over the years about general process management best practices

This presentation is intend to convey my opinions about process ownership best practices as they apply to the Finance arena within the Fortune 500

There are a least a dozen key elements required to construct and maintain efficient and effective financial reporting and planning systems


I

CFO

Accounting Corporate Finance

Sales Finance

Operations Finance

Process Owners

IT Developers

• CFO is catalyst if change is to occur

• Head Process Owner sits at the CFO table

• PO owns all enterprise Finance processes

• Requirements go directly from users to PO

“I support the strategic initiatives to innovate our enterprise Finance processes.”

• PO partners with IT to implement system as per end user requirements


Finance Users

Analyze and accountable to

data

How data is calculated and

viewed is important

Understand business drivers

and strategy

IT Programmers

Understand software

functionality

Understand data

transformation

Programming expertise (SQL

& OLAP)


Too busy to implement

Lack of EPM technology background

Software tool vendor differentiation

Project management background

Integration risk


With complete requirements, IT great at execution

IT solutions may be short term focused

Difficult for IT group to discern HOW tools should produce outputs

Very system technical, but unfamiliar with spreadsheet models

IT team member continuity issue

How to prioritize?


Finance

End User

IT

Developer

An EPM Process Owner has a combination of finance and IT knowledge and skills

Required to project manage and maintain best practice process

Has authority to create change through innovation The Roles of Process Owners in Successful EPM Initiatives [email protected]

Combined finance and technology knowledge provide key insights

Key finance principles upheld across enterprise

The “Single Version of the Truth”

Consistent financial and operation data definitions

Reliable data integration

Consistent planning assumptions and methods applied across enterprise


Relationships with both end user clients and IT based on trust

Efficiencies gained in EPM implementations, PO’s

Understand how to roll out EPM solutions

Able to effectively perform User Acceptance Testing

Leverage knowledge gained in other projects

Dedicated to project implementations and maintenance


A Process Owner’s value to a CFO organization can best be conveyed with a case study example

Let’s say a CFO asks his/her Finance Process Owner lead to come up with a process to replace hundreds of spreadsheets, that encompass a detailed cost allocation and product profitability process, with a best practice more automated solution

The new process should leverage (purchase) current Business Intelligence (BI) technology and implement solution


Strategy

Sponsorship Message

Process Owner Responsibilities 1 2 3


Vis

ion

Execute BI Software Purchase

Implement Solution

Requirements Gathering &

Design

Research Vendor Options

Assess Current and Future Needs 4 5 6

Assess Improvement, Productivity &

Cost

Prototype Tools

Make Purchase Decision

7 8 9


Pu

rch

as E

xecu

tion

Develop Solution

10

Im

ple

men

tatio

n

Process

Owner Testing

into Production

Solution

11 12

CFO understands current process states and collaborates with Finance leaders

What is needed to better manage business

Vision is tied to organizations success

Vision drives change

Identify Process Owner and team


It is extremely important for the Process Owner to be empowered to implement EPM change:

CFO communicates prolifically the framework for change

E.G. “We need to construct a product profitability reporting and planning process to help us make decisions about what businesses we retain going forward…”

CFO announces Process Owner and team by name

Everyone is accountable to be successful

Keep message simple and realistic


Initiative will change the way their work is done for the better

Since PO takes full accountability, he/she decides when conflict resolution is required

Process Owner should communicate his/her responsibilities across a matrix org. structure

Creates design across the enterprise

Implementation and long term maintenance

Builds team

Establishes performance milestone and measurements


Select a good project process methodology (E.G. Six Sigma - efine, easure, nalyze, mprove &

ontrol) and document with a Project Charter

Evaluate Current Process

Collect

User Requirements

Design New

Process

General Process Owner Approach

PO: Finance Knowledge and Skills

PO: IT Skills

Sourcing data mart

Spreadsheets

Reporting

Etc.

Based on Strategy

New Capabilities

How process should work

Determine process steps

What type of technology (OLAP or SQL or both)


General Process Owner Approach (cont’d)

Process Owner: IT Skills

Match BI Functional and Non-Functional Requirements

Consider Legacy Process Integration

Demo Different Software

Customer References

External Research Publications – Gartner / Forrester

Vendor Viability – Sales & years in business

External Research Requirements vs. Software Features


Are there opportunities to expand BI beyond needs currently identified?

Corporate initiative expanding to Business Unit Finance groups

Financial Reporting and Planning BI tool expansion to other functional / operational needs

Order-to-Cash Cycles

Procure-to-Pay Cycles

Sales Forecasting by Customer and Product

Predictive Analytics


Weigh improvements, productivities and implementation cost

Don’t get locked into the initial cost

Process productivities result in redeployment of resources

New BI process will provide additional capabilities not currently available (important)

Faster decisions

More reliable data

Impact of better decisions should figure into ROI (e.g. Higher EPS)


If possible, attempt to test the BI software before purchasing it

Construct a small application

Remote access into vendors’ servers or loading software to in-house server

Easier for company leadership to make a purchase decision, if a working model meets expectations


Prior to decision, Process Owner should meeting with end users, IT and leadership to discuss how purchase decision was reached

The PO should be able to directly tie the process improvements back to the CFO strategy

Create a development timeline with key milestone accomplishments

Purchase BI tool


Requirements should be complete to avoid churn

Development roadmap with detailed timeline

Constant contact and progress reviews

Process Owner delegated to make decisions on behalf of end user client

Recommend same hardware setup for both Test and Production environments


Test at specific roadmap milestones

Resolve issues along the way

Opportunity to provide updates to end user clients on verified progress

Determine “Is this what you were expecting?”

Identify changes

Manage expectations for both IT and end users

Stress testing


Changes only in Test environment, then released to Production

Never make changes to Production – Official data

Monitor BI performance

Good plan for disaster recovery

Anticipate platform growth

Survey users to identify future enhancements

Positive feedback to leadership

CFO initiative met


When executing EPM initiatives, the “Who” (Process Owner) will determine the quality of the “What, When and the How”

Successful Finance initiatives require leaders that are confident about executing change and possess the necessary traits

Finance process knowledge - Book close to Financial Reporting

Technical software application and database skills

Excellent project management skills

And a bit of thick skin to deal with those that are resistant to change


What is EPM? Enterprise Performance Management (EPM) consists of a set of management and analytic , supported by

, that enable businesses to define strategic goals and then measure and manage performance against those goals

Core EPM Management Processes

Shared Data

Setting Goals

Financial Planning

Operational Planning

Consolidation

Reporting

Analysis & KPI’s

The Roles of Process Owners in Successful EPM Initiatives

[email protected]

Curtis’ Blog – www.curtisneumann.com


The Role of Process Owners in Successful EPM Implementations

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