In today’s fast-paced environment, organizations can no longer rely on outdated financial data systems — quick responses to changes in the market and business are integral to success. Plus, relying on Excel is a headache.
Instead, companies need to understand what their data tells them and how to react accordingly and quickly. One way this can be achieved is through an agile planning, budgeting, and forecasting system. This advanced technology saves time and yields more accurate results to keep pace with the speed of business.
The fast track to better financial forecasting involves three basic steps...
1) Admit that you think you know, but you don't
Know what drives your business. Many companies we work with are convinced they know which business segments drive revenue, even in the absence of solid data. For example, one pharmaceutical company believed a rise in price would have a significant impact on business, but after implementing automated, driver-based budgeting, we found that the increase in margins from a drug going brand-name to generic had a far greater impact on their bottom line.
Because Excel is error-prone and de-centralized, investing in an EPM solution can save a lot of money in the long run by providing fresh, accurate, and sometimes surprising analysis to drive business.
2) Implement driver-based budgeting and forecasting with an EPM solution
Many businesses that rely on Excel have decentralized data spread across various business units — an environment that requires multiple, unnecessary bottom-up iterations that do not consolidate come financial close.
With a driver-automated system like Oracle Hyperion Planning, management can make adjustments for corporate-level initiatives and objectives (e.g. payroll-related scenarios, tax and benefit implications, expenditure reductions), see consolidated results at a top level, and then push out to business units so they can make their plan accordingly. Driver-based systems allow for fewer iterations, versus firing shots in the dark with Excel and creating unnecessary work for your team.
3) Centralize data
With an EPM solution, data is no longer siloed in individual business units, reducing reliance on single gatekeepers within an organization. In some companies we’ve seen as many as nine different business units planning in nine different ways, with data from some spreadsheets even relying on another.
With a centralized system, opportunities for more accurate analysis open up to more people throughout the organization to see how the data fits together. This approach improves accuracy while increasing speed. And ultimately, faster delivery of financial results allows an organization to respond quickly to changing business opportunities.
How to get started
Planning, budgeting, and forecasting tools are available for organizations of all sizes. Oracle is the best-in-class leader in EPM solutions, according to Gartner, and offers on-premises environments as well as cloud-based solutions. Learn more about how to get started in our Oracle Planning & Forecasting Implementation Guide.