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The Hackett Group Overview Defining and Enabling World Class Performance
Mission
We help clients achieve and sustain world-class business performance in Finance, HR, IT, Procurement, and Working Capital
Approach
We help clients to measure current performance compared to peers and world-class performers
We identify project opportunities and develop a business case leading to an actionable roadmap,
We implement recommended change and empower our clients to improve the organization
Results Operating in the Americas, Europe and Asia, we have served clients in over 70 countries
Sustainable performance improvement leading to lower costs, higher quality and better margins
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
We have proven our Hyperion implementation capabilities through successfully leading some of the largest and most complex implementations in the world.
Sample Representative Clients
Exceptional Team. Approximately 100 dedicated Consultants with an average of 12+ years experience.
Process Excellence. We integrate our proven Best Practices into each phase of the implementation.
Structured Methodology & Tools. Reduce risk and ensure a comprehensive approach while providing a framework for developing innovative solutions.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Reactions to the downturn have varied, but the realities of the plan / forecast process for many organizations include:
In an effort to gain more visibility, forecasts are becoming more frequent and requiring more detail
Number of off-line models and analysis are expanding to support detail and scenario modeling
Iterations, duration and FTE effort for the plan / forecast cycles are increasing significantly without gains in accuracy
Increased forecast and plan gaming (e.g., hockey stick) given tenuous employment conditions
Effort / cost of the Plan / Forecast cycle continue to increase despite what appears to be diminishing relevance / benefit.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set and Reinforce the Tone Integrate, Integrate, Integrate Move Beyond the P&L Focus on Drivers, Not Details Roll it Forward Define the Gap Mind the Gap
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
Forecasting improvement efforts tend to revolve solely around systems and data, often missing high impact, simple improvements through people / process integration.
Integration
Process
The highest ROI in investments in planning / forecasting software come from streamlining and integrating information, people and processes.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
Recent economic conditions have highlighted the need to push analysis beyond the standard income statement measures and into key balance sheet and cash flow metrics.
Resources Working Capital PP&E Intangible Assets Headcount per function Operating Cash Flow Depreciation Amortization Investments in Working Capital Investments in PP&E and intangibles
Forecast Income Statement Sales Cost of Sales M&S Costs R&D Costs Administration Costs Impairments Other oper. Inc./ Exp.
Leading organizations leverage technology to create, achieve and validate linkage across the financial statements.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
Change the conversation to business analysis forecasting is not forward accounting Eliminate detailed imprecision Additional data does not necessarily equal accuracy Push to exception based forecasting provide a starting point and model from there Move beyond the point Establish a range of potential outcomes with known variables
High
Evaluate
Variability Variability
Consolidate / Eliminate
Low Materiality
Low
Leading organizations have the appropriate balance across the matrix and establish organizational standards (where logical) on drivers and detail.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
While the concept of a rolling forecast has been around for ages, leading companies are adopting interesting variations to suit the needs of their company / industry.
Q4 Q1 Q2 Q3
Strategic Plan
Targets Initiatives
The right balance must be struck across level of detail, frequency and horizon to move to a rolling forecast without overburdening Finance.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
Gaps in the forecast stem from both inaccuracy as well as true changes in market conditions. Applying rigor and controls to improve accuracy will provide opportunity to focus resources on the latter.
Forecast Error
Bias
Time
Variation: Average of absolute errors General variability / market conditions Limited to no control
Re-evaluate drivers
Typically caused by: Bad behavior Failure to understand the business Failure to learn
Technology plays a critical role in enabling rapid, consistent and routine gap / root cause identification and resolution.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Set the Stage Move Beyond the P&L Roll it Forward Define the Gap Focus on Drivers, not Details
Clear, proactive protocols / processes must be in place to address true changes to expected business performance, both positive and negative.
Identify material gaps
Present tactical plan (action steps, owners and due dates) at the time the variances are discussed
Instate and actively monitor a short feedback loop to ensure action / progress
Leading companies spend the majority of monthly operating reviews defining / debating tactical actions as opposed to reporting the weather.
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Where to Start?
Establishing a blueprint provides a holistic review of the processes / systems and focuses future efforts on the areas with the highest ROI.
Two-Day Assessment
Finding 1
Performance and stability are not meeting basic service level expectations and concerns exist with regard to longer term scalability Increasing complexities in the business drive guerilla reporting techniques There are significant inefficiencies and headcount impacts as a result of guerilla reporting techniques Theres lots of data its just difficult to use in a meaningful way; also, data integrity is at risk due to diverse business rules and processing logic
EPM Blueprint
Supporting Observations
Reports are timing out, the system is very slow, users are frustrated and are impacted daily by poor performance Groups operating out of need, creating a complex disintegrated environment of data Businesses are hiring more and more resources to support the manual process of building reports Information does not tick and tie - groups are pulling data from multiple sources, tying it together, adding custom flags for slice and dice
The business has not collectively come together to define core data attributes, definitions, measures, and ownership Continued business growth is causing more and more people to say: give me more, give me more
Limited discussions occur with regards to how to measure the business, what attributes are required, and who owns the data Every group within the organization, including all Business Process Transformation (BPT) threads, require better information and access this demand will continue to increase
Enterprise Business Intelligence comprises the processes, tools and governance for gathering, analyzing and delivering information across the extended enterprise
GET DATA IN Data Sources ERP CRM Financial Other Partners, Customers Suppliers, other external DATA OWNERSHIP ETL DATA WAREHOUSE REPORTING GET INFO OUT
FINANCIAL
Reports
To provide information that is correct, current, timely and relevant at the point of decision making
Initiative
Initiative Charter
Outcome Elements
Highly reliable and current operational and analytical environment Timely availability of information to enable more reliable decision making A common understanding and definitions of principle business information entities A single view of corporate data elements (e.g. customers, partners Etc.) -
Initiative Details
Define and document the companys master data elements, attributes and owners (people & systems) Develop and implement a process that produces agreed upon definitions of information entities, identifies SORs for each entity, defines business ownership for information entity (information stewardship) Document data source and quality issues and recommend fixes Identify prioritized problems for specific data entities requiring immediate attention
Scope
Definition of principle data elements Data sources and systems of record (SOR) for these data elements Business ownership and stewardship for principle data elements Data element lifecycle management Data quality, integrity, and control points Master data, metadata and data transformation management
Establish ongoing data quality and management processes Define key processes, tools, and control points that enable/support data accuracy, timeliness, and consistency and develop a plan for and implement sustainable data quality management processes
Q1 FY08 Apr
BU Rpt
Q2 FY08 May
Net App U
Jun
Jul
DW Redesign
Aug
Sep
PerfApps
Oct
Upgrade Hardware Environment Stabilize BI Application Suite Implement monitoring & metrics program
Establish near-term roles and responsibilities for IT and business Define future-state org & governance models Pilot & implement governance policies, processes and procedures
Define and document NetApps master data elements, attributes and owners Document data source & quality issues and recommend fixes Establish ongoing data quality & management processes
Define current demand and core initial reporting Develop logical reporting maturity stages and to-be objectives Implement early wins Ongoing Report Development
Validate proposed future-state EDW architecture Institutionalize capacity planning procedures Define and document future-state blueprint for BI architecture Execute architecture upgrade/enhancement program
Initiatives Deployment Task Pending scalability resolution
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2009 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.