The second holy trinity of modern Analysis and Planning tools… Flexibility, Workflow and Security

February 2020

bi5 have been working with organisations for over 10 years implementing modern Planning, Budgeting, Forecasting and Reporting systems and all agree it is the best investment they have made.

For as long as most finance professionals can remember, Excel has been the gold standard. But in this day and age, is it still enough? Although Excel is a great tool which offers numerous features that provide a lot of functionality, it still has limitations that deny users the growth now available to finance professionals.

Technology is rapidly changing the face of finance, along with the rest of industry standard practices and the tools available to support this change.

FP&A is a term gaining more and more acceptance globally as the standard for Planning, Budgeting, Forecasting and reporting …

In the first installment we focused on the data collection and integration or, as we call it, the engine room of Analysis and Planning and reporting tools.

In this second instalment in a series of why you need to change from old style Excel based practices to a new modern Analysis and Planning tool we focus on the ‘front-end’, covering things such as flexibility, security access and workflow.

Top-down, bottom-up, driver-based budgeting and workflow

Enterprise planning, or budgeting, frequently uses a top-down approach for target setting and bottom-up data collection.

In some cases, users (such as divisional managers) will receive an empty spreadsheet to be used for planning. Those users then have to input their data, submit the data, and get approval or rejection, all while meeting very specific standards. Whilst many businesses still use Excel for this function, it is not built to manage those workflows. It is difficult to pre-populate targets (for top-down allocation) in Excel, which often means users start their planning from scratch. Driver based budgeting and forecasting is impossible unless all the relevant data is integrated and organized in a multi-dimensional format, and this is not Excel’s strength.

Workflows are a key function in a modern analysis and planning tools.  Approval/Rejection with comments and data locking are also supported. The solution allows automatic data allocation, so bottom-up planning does not have to start from scratch every time.

 

Permissions and information security in modern planning tools

Properly securing sensitive data such as payroll and forecasts is difficult to achieve with Excel, and potential compliance violations become a real risk. Often the spreadsheets being used for planning and reporting contain some of the company’s most confidential and sensitive information. Some of this data is protected under federal and state laws, including personal details of employees such as salary. When dealing with data such as forecasts, public companies could potentially be in violation of regulations if this data is exposed. Finance professionals must often take great care to protect the data they are tasked with managing. But the utmost care can be compromised when they are then forced to send spreadsheet files bouncing around the office. In an era of heightened data security and breaches occurring at larger organizations, finding a solution that clearly protects highly sensitive data is paramount.

All types of data are subject to the latest security standards. Access levels can be set for specific types of users, data, ‘slices’ of data, or reports so only approved users or user groups are provided the access level their work requires.

 Dashboards and executive reports for analysis and planning

Excel and PowerPoint are often thought of as the friendliest and most commonly used tools to create management reports. However, it is no longer the most modern solution available to finance professionals, as they do not accommodate web-based information, and offer limited capability for deep data analysis and dynamic, on-line reporting. In addition, they are either too heavy and large to easily share or you can only share limited slivers of data, which means your executive team is not getting the full picture. While they can look nice and shiny, it is not effective in the end and can limit the ability to dig deep in the data and see the full picture across the organization.

With the advanced analysis and planning tools now available which cover all business functions, executives expect a digital solution.

With modern analysis and planning tools data can be analyzed from anywhere. Reporting, analysis and planning are seamlessly connected, allowing the system to create proactive alerts to provide more clarity on “the big picture.”

Never-ending models for all aspects of finance

Every organisation is basically multi-dimensional in structure, which means there are many different ways of viewing and measuring activity and performance. Excel struggles to be multidimensional; users are forced to work with their individual worksheets and them it’s up to someone to integrate into a corporate wide view.

For example, a mid-size organization with 100 product lines, 10 regions, and 10 cost centers, spreadsheets can quickly number over 10,000 every year. This number doesn’t even include drafts and simulations! Additionally, making changes to a single template within this mid-size organization means individually updating dozens of spreadsheets.  The risk of incorrect formulas is rampant and despite best efforts the risk can never be entirely eliminated. Quite simply, Excel struggles to be the multi-dimensional tool that a multi-dimensional organization requires.  Multi-dimensional functionality and smart data storage are standard features of a modern analysis and planning tool.

The multidimensional model allows users to work with their ‘sections’ of the overall model rather than individual or departmental spreadsheets. Once they have completed their ‘section’ of the model, they hit a submit button and their data is integrated back into the corporate model and the consolidated impact is immediately visible.

 

Excel is still the primary tool of choice for most finance professionals. Mainly because it is cheap, accessible and a lot of people know, at least a little about how to use it. However, it is and always will be, a personal productivity tool, there are other solutions available that offer increased efficiency, effectiveness, and business value for budgeting, planning, forecasting and reporting.

Today’s successful Data Driven organisation are as moving to modern Analysis and planning tools to make fact-based decisions.