4 Tools to Accelerate Your Company’s Financial Planning & Analysis Models

In the not so distant past, corporate finance teams built their models and shared Excel files via email. While this was effective at the time, it has become less efficient when dealing with cross-functional teams and large datasets. Sharing files across departments leads to version control challenges and increased potential errors.  Any financial planning and analysis (FP&A) analyst can commiserate when their massive 50MB financial model crashes while updating assumptions.

Luckily, it is 2019 and software companies have identified ways to enhance the reporting, planning and forecasting process. These corporate performance management (CPM) tools are useful for a company’s finance and accounting departments to better provide information on business performance. Although there are many solutions currently in the market, Adaptive Insights, Host Analytics, Anaplan, and Vena Solutions are a few of the top performing offerings.  These tools provide cloud-based solutions that enhance the reporting, budgeting, and forecasting process.

In previous roles, I have used Oracle’s SmartView (formerly known as Hyperion Essbase) and felt it was helpful. This software served as a multi-dimensional database that could be downloaded as an Excel Add-In to enable users to create complex financial models. Smartview would connect to the company’s database and return financial information across multiple variables (product/service line, division, financial metrics, periods, etc.). However, this tool had its shortcomings:

• Inability to undo edits: refreshing new data could mistakenly overwrite formulas and formats forcing rework

• New line item limitations: users needed to monitor templates and manually add new line items; this required periodic updates that needed to be resent and re-linked to other models

• User experience: rules were not intuitive and required much training for power users and novice users; this became a challenge when sharing templates across departments

The CPM platforms (Adaptive Insights, Host Analytics, Anaplan, and Vena Solutions) mentioned above have addressed many of the pain points I experienced in the past. For example:

• Auditing: added ability to view prior versions of a file and track modeling changes

• Cloud based: hosted online to minimize capacity constraints from on prem servers

• Dynamic user interface: administrators can incorporate variables to customize the user template based on permissions to ensure ease of use

These three benefits can help address pain points of planning across functions and managing large datasets.

Cross Function Planning: sharing templates and files during the planning process is streamlined through workflows that notify users when they need to review, update/edit, sign-off on their template. Managing the process through a workflow diagram helps track progress and uncover where the main bottlenecks are in the process.

Managing Large Datasets: most CPM tools are cloud-based and can handle the majority of the data pulls and calculations prior to exporting into the excel file. Centralizing the calculations helps reduce file sizes and as a result, makes it easier to update and edit in real-time. This aspect would be especially useful when assessing an opportunity and tinkering with a variety of assumptions and scenarios.

In addition to these enhanced CPM offerings, FP&A team members can leverage automation software to offload the manual, time-consuming tasks of the planning process. Software bots can be built through tools such as Ui Path, Automation Anywhere, and Blue Prism that can mimic human involvement in manual processes. For example, an FP&A team member can program a software bot to run at off-peak hours to refresh reports, extract data from company systems and roll forward models. These tasks can be tedious and would enable the team to spend more time analyzing the business performance and providing more thoughtful insights to their managers.

FP&A teams provide valuable internal support functions throughout an organization.  Technological innovations geared toward this corporate function such as CPM and automation, provide company-wide benefits not solely seen through the P&L but also through employee morale and productivity.