Planning Process and Solutions are in Transition

Budget Once – Forecast Forever

Power BI provides unparalleled ability to analyze your data, uncover potentials and reveal problems. Exactly what you need when creating budgets or doing forecasting. Why is it that traditional BI solutions do not have forecasting capabilities, except IBM Planning Analytics? IBM just combined Cognos and Watson to enable customers to gain insights AND plan for the business in one solution! Visual Planning from Power ON does exactly the same. For the time being, most companies have at least two different solutions supporting these tasks. This will change in the near future.

Visual Planner from Power ON (www.poweronbi.com) enables budgeting, planning, forecasting and projections in Power BI with Workflow, Allocations, Revenue, Employee, CapEx with Line Item Detail right in Power BI, while Power BI empower users to see the impact in their forecasts right in the BI tool. What are the benefits of this powerful combination? They are numerous, and invaluable!

The Problem

Most companies are investing large amounts on putting together budgets and plans to run their business. The problem they face is that they seldom help make decisions about and for the business. Many companies spend a lot of time on micro managing expenses that you can’t really control, like increases in benefits or legal fees. Additionally, all the insight needed to plan for your business are sitting in different systems, the BI system, and this invaluable information is not readily available to the people when entering their budgets or plans. We are presenting a solution to this planning shortcomings:

FPA&A Trends reports that there is a “New Era for FP&A” that is crystalizing. “There are significant changes in the role of the FP&A function, as it pivots towards a more predictive and analytical future, which will require internal cultural shifts.”

The article highlights that the road to a healthy FP&A process, for Planning, Budget and Forecasting, includes both changing processes and taking advantage of new BI solutions. Visual Planning from Power ON has a great track record of helping organization in achieving this new state of FP&A.

The Solution – Plan and Forecast in your BI System.

New technologies from Microsoft with Power BI are now making it affordable and secure to make all BI data available on any device at any time to everybody within the organization. Power BI is available at ~$100 per user per year. A minimal cost for such a powerful tool, that can potentially help companies save millions.

The solution to the FP&A problem discussed above is to give everybody access to data, and let them plan while they reveal opportunities, and uncover problems in the actual data, so they can be more accurate when they create their plan or forecast. We call it Business Intelligence Performance Management (BIPM).

How do we do it?

There are 4 important elements to enabling Business Intelligence Performance Management, and enabling stakeholder to successful Planning and Forecasting. Do the Budget once, then make the Forecast continue every quarter right in Power BI.

The steps in BIPM are:

Research

Everyone contributing to the plan and forecast need to do a little research educate themselves about what is going on in the company. Management need to share Strategic Plans, including new product mixes, new markets, discontinuation of product lines and hiring strategies. Are there acquisitions or reorgs planned and so forth. Planners might want to do a little research from their team, and understand customers and vendors, and collect insight into where the market is moving. These tasks do not have to take a long time, but are crucial to better complete the plans and forecasts; Acquire the data that is important to you.

Planning and Forecasting also includes the task to estimate expenses that will incur for the forecast periods. Focus on discretionary expenses. It is the Finance Departments job to take care of the non-discretionary expenses.

Design

Now is the time to enter the new targets and commit to them. Use Power BI to slice and filter current data until you get a feel for opportunities and threats. Then enter the forecast numbers at a granular level that makes sense, and that is possible to track. I.e. you shouldn’t budget on specific products, as they may get discontinued, but it would make sense to do it by product category.

Power BI also lets you run Predictive Analytics and Machine Learning Procedures based on your data to assist in deciding trends, seasonality and allocations.

Analyze

The Analyze Phase consists of two elements: Confirming the Plan and Measure the Plan. They are very similar, just stretched out in time.

Confirming the plan before it is submitted:

Now is the most important time to figure out if the plan makes sense, and if everybody is buying into the growth targets, launch plans, marketing events, and planned conferences. Power BI can assist in making a complete picture of the new forecast, and Visual Planner can assist you with making adjustments and set commentaries for that is working and what was changed. This will simplify the review process when text comments and written assumptions will help to understand the past in retrospect.

Measuring as it is put into action.

Part of the Analyze Phase is to see if the current plan makes sense 30-60 days after it has been put into action. Many organizations refer to this as ‘reporting’, but in BIPM it all becomes analyzing and detecting. With a great BI tool, this becomes an ongoing task as visualizations are automatically updated as Actual data keeps flowing in.

Forecast

Finally, the most important task; Forecast. This is where you will spend most of the time until it becomes part of the corporate DNA. Eventually it will become so fluid that it takes over the Water Cooler conversations.

At least every quarter, a 12 months forecast should be Researched, Designed and Analyzed. Important questions should be discussed and the forecast should be updated to reflect the changes in market conditions, hiring plans, customer behavior, inventory levels and optimizing Vendor mix. This forecast can be measured towards actual performance, or towards the prior forecast at any time to observe and correct current state of the union, and take notes and make new adjustments for next quarter’s forecast.

Summary

Since you are considering implementing a new FP&A process, Visual Planning is a cost-effective tool to support you during these endeavors. The benefits are that you do not have to wrestle difficult spreadsheets, deal with 2 or more systems that doesn’t tie. Visual Planner leaves you with a healthy forecasting process that involves all parts of the organization. A solution to live and grow with.

Contact us or one of our partners, to discuss your needs and start seeing the benefits of BIPM.