Demand Planning is a critical piece of the overall Sales and Operations Planning (S&OP) process.  In fact, ensuring S&OP practitioners and Financial Planning and Analysis (FP&A) practitioners can use a common language is important to driving both operational and financial performance.  How?  One effective way is to leverage the financial and operational planning insights within corporate performance management (CPM) software that align the data and KPIs from both worlds – which allows for driving continuous collaboration across the enterprise planning processes.  Aligning these operational and financial KPIs ultimately elevates FP&A to next-generation Finance with eXtended Planning and Analysis (xP&A).

Aligning Operational and Financial Plans Drives Financial Performance

Everything in an organization has financial implications.  If the S&OP forecast (see Figure 1) inaccurately accounts for how much material is needed to meet demand, for instance, then inventory holding costs and obsolescence issues may increase.  Additionally, if too little material is available to meet demand, then costly rush shipping can impact the bottom line and cash flow.

Today, uncertainty across the global economy is drastically impacting consumer demand, affecting commodity prices, and disrupting supply chains.  Amid such volatility, FP&A teams must help enable and accelerate decision-making processes such as Demand Planning.  Where to begin?

Demand and Capacity Planning in OneStream
Figure 1: Demand and Capacity Planning in OneStream

5 Demand Planning KPIs for Better Financial Results

For FP&A professionals, understanding and utilizing the KPIs from the Demand Planning process creates a common language to unify key processes and drive both operational and financial performance.

Here are 5 Demand Planning KPIs that can inform better financial results.

1. Inventory Turnover

How quickly is inventory being turned over?  As inventory sits, inventory holding costs increase and obsolescence becomes more likely.  Obsolescence issues can then result in scrapped material and money lost as more material must be procured to replace the obsolete material – likely at a higher cost for rush shipping and spot procurement.  And with disruptions to global supply chains and shipping channels, issues that can arise in this domain can cause a heavy financial burden and managerial headaches.

This important metric in the demand planning cycle helps assess the health of the supply chain organization, the variables affecting demand, and the ability to satisfy the demand in time.  Considering the financial planning cycle is crucial because it impacts the budgeting, planning, and forecasting cycles.  Accordingly, bridging the gap between the operational and financial plans can ensure lockstep in the various planning efforts happening across large and complex organizations.

2. Total Sales

Finance professionals are acutely aware of the important role total sales plays in the FP&A planning and budgeting cycles, but the S&OP process also looks closely at this metric.  Sales numbers are essential to understanding the bigger picture.  Specifically, the numbers show how the supply chain and operations are ultimately performing when it comes to fulfilling orders and keeping customers happy – which ultimately generates sales for the organization.

In other words, the goal is to align financial planning inputs with the results of the operational planning processes happening as part of the S&OP process.  That alignment ensures that Finance and Operations are moving in lockstep to measure and achieve organizational goals.

3. On-Time Delivery

Organizations must analyze their supply chains and ensure their teams are delivering products on time to reduce inventory holding costs and ensure customer expectations are being met.  If this isn’t happening, a supply chain issue likely exists and needs to be addressed.

This issue affects more than just the supply chain, however.  Like inventory turnover, on-time delivery metrics are important to understand in the demand planning process and can also help inform the financial planning process.  Finance cares about the impact on financial metrics when customers aren’t happy and therefore aren’t placing orders or, even worse, when the company becomes liable for unmet deliverables and expectations.

4. Gross Margin

Is gross margin hitting projected targets?  If not, why?  Understanding gross margin, which is net sales minus cost of goods sold, and tracking performance against projections matters to both a supply chain organization and Finance.

Forecasting customers and demand volume is a supply chain activity that can map gross margin projections.  And for the Finance group, utilizing the outcome of that activity informs on how to forecast gross margin at the enterprise level.

5. Working Capital Projections

As everyone knows, cash is king, so asking whether the company has as much cash in the bank as the team forecasted is important.  Understanding how much money and what assets are needed to run day-to-day operations matters just as much to operational planning as it does to Finance.  For instance, incorporating the S&OP insights into a 13-week cash flow strategy ensures liquidity – something that is as important as ever with economic conditions becoming more uncertain.

Working capital- Demand Planning

Working cross-functionally with the Operations team and the Finance team ensures all efficiencies in the process and operations are being explored.  Cross-functionality also ensures the financial implications of those efficiencies are being folded into the financial and operational plans.

Final Thoughts

Ultimately, aligning these key KPIs in the plan and tracking them across operational and financial reporting ensures that the organization can sense issues before they impact the financial results and saves time by ensuring effort isn’t duplicated across the planning processes within an organization.  These time savings translate into more time available for generating useful insights and analytics.

Ensuring alignment with the ongoing financial planning efforts is critical to driving financial and operational performance.  Utilizing the shared language and KPIs between Operations and Finance helps bridge the gap between the efforts and gets the plans closer to a single, unified plan for the organization to work toward and track progress against.

Learn More

Want to learn more about why unifying FP&A and demand planning are critical to driving performance?  Check out a recording of our Live Demo: Aligning S&OP and FP&A for Intelligent Demand Planning to hear more about demand planning in OneStream.

Download the Solution

The disruption, uncertainty, and volatility we’ve seen in the past 2 years have had a big impact on enterprises across all industries around the world.  And as supply chain bottlenecks, inflation, and geopolitical challenges continue to cause uncertainty, the need for business agility and resilience has remained in the spotlight – driving steady demand for agile corporate performance management (CPM) and analytics software solutions. 

Drilling into these market trends was the focus of the 2022 Pulse of Performance Management webinar, hosted by Craig Schiff, CEO of BPM Partners.  Read on to learn what the BPM Partners annual survey revealed about key market trends, who the key players are in the CPM/BPM market, and how OneStream stacks up in the marketplace.

The Pulse of Performance Management

Craig Schiff is CEO of BPM Partners, a vendor-neutral advisory services firm helping clients address performance management challenges with a comprehensive, rapid, and cost-effective BPM methodology.  The Pulse of Performance Management annual webinar series hosted by Mr. Schiff is designed to provide an unbiased and up-to-date overview of the world of business performance management (a.k.a. corporate performance management). The information provided is intended to enable companies to have intelligent and informed discussions as they plan their performance projects

So what did this year’s survey of over 300 Finance and IT executives, across industries, reveal in terms of key market trends? 

With the theme of “Transform – Extend – Evolve”, this year’s BPM Pulse survey found that 65% of respondents view their CPM/BPM projects as part of a broader Finance Transformation initiative designed to streamline, automate and optimize processes and transition from static, Finance-driven planning and reporting to dynamic and comprehensive planning, consolidation, reporting, and analysis.  Organizations are extending their planning and analysis processes across the enterprise – and evolving their planning processes with more advanced techniques, including rolling forecasts, scenario modeling, and predictive analytics.  

When asked what’s important for the next 12 months, respondents highlighted continuous forecasting, strategic planning, scenario modeling, and cash flow forecasting as the top 4 priorities. (see figure 1)

OneStream most important

Figure 1 – What’s Most Important for the next 12 months?

Survey respondents also highlighted the increasing focus on extending CPM/BPM into Operational Planning and Analysis.  Key areas of focus include Revenue Performance Management, Profitability Analysis, Workforce Planning, and Financial Signaling according to the survey. (see figure 2)

Operational Planning Figure 2 – Operational Planning and Analysis Focus Areas

When asked about their usage of rolling forecasts, 52% of respondents indicated their forecasts extend beyond the end of the fiscal year, while 43% said their forecasts extend only until the end of the fiscal year.  

When asked about their Finance Transformation projects, the top areas of focus include streamlined processes (74%), increased insights (61%), a more unified system (50%), and increased planning frequency and reduced cycle time (47%) each.

The survey revealed the following trends in planning, budgeting, and forecasting:

The survey revealed the following trends in financial consolidation:

And the survey revealed the following regarding selection of BPM/CPM software solutions:

The BPM/CPM Vendor Landscape

 In reviewing the BPM/CPM vendor landscape, Mr. Schiff reviewed profiles of 15 “core vendors” as well as several new vendors that have entered the market over the past 12 months.  Based on customer surveys, the vendors were rated on a 1 – 5 scale and categorized from Fair to Outstanding based on their overall “Pulse Rating.” (see figure 3)

So how did OneStream’s CPM software platform fare in the Pulse Rating?  I’m happy to report that OneStream received an Excellent rating of 4.70 out of 5.  OneStream’s unified Intelligent Finance platform, with built-in financial intelligence, was cited for its core strengths including Complexity Simplification, Performance/Scalability, Easy Expandability, Integrated Planning, and AI-Driven.  Mr. Schiff also highlighted OneStream’s Analytic Blend engine and its capabilities to blend large volumes of transactional data with governed financial data to support financial and operational signaling.  He also highlighted the recent introduction of our Sensible ML solution for intelligent demand planning.

 In the 2022 BPM Pulse Awards, OneStream was recognized for Excellent ratings in Overall Satisfaction (4.70) and Financial Consolidation Functionality (4.71).

Learn More

To learn more about how OneStream’s ratings in the Pulse of Performance Management compare to our key competitors, download a customized version of the BPM Partners Vendor Landscape Matrix, and feel free to contact OneStream if your organization is ready to take your BPM/CPM game to the next level.

Download the Analyst Report

 

Financial modeling is a powerful technique that helps corporate finance professionals create a mathematical model of their business and the impact of specific decisions on their future financial results.  There are several types of corporate finance models that are used in practice and many derivatives of these can be applied across an organization.  Microsoft Excel® is the tool of choice for simple financial modeling, however, for more complex requirements, purpose-built corporate planning and forecasting software solutions are a better choice.  Read on to learn more.

Corporate Financial Modeling

Financial modeling is a common tool used by individuals and corporations to create an abstract model of a real-world financial situation.  This typically involves the gathering and analysis of historic data, which is then used to create a forward-looking projection for future time periods. Individuals may create a financial model of their monthly or annual income and expenses to help manage their finances.  For the purposes of this discussion, we’ll focus on corporate financial modeling.

Corporate Finance Modeling

Corporate financial modeling is performed by financial analysts in a corporate finance group within an enterprise, or by the line of business analysts supporting a specific functional department such as Sales, Marketing, Customer Service, or other functions. Use cases for corporate financial modeling include strategic planning, long-range financial planning, financial budgeting, mergers and acquisitions (M&A) or divestiture analysis, capital planning, project planning, or evaluating the impact of critical business decisions.  This can include new product development and launch, geographic expansion, pricing of products and services, hiring and staffing, capital investment, and other business decisions.

Of course, in the financial services industry, financial modeling is performed by investment analysts as part of their evaluation of portfolio companies or potential investment targets.

Types of Corporate Financial Models

There are a wide variety of financial models used in corporate finance, so here we’ll cover the most commonly used types of financial models.  These include the following:

5 Steps to Effective Financial Modeling

Financial modeling in a corporate setting is a critical process whereby the results of the process will be used to support decisions that can have a major impact on future financial results.  Therefore, great care should be taken to ensure the inputs and outputs of the financial modeling process are as accurate as possible. Here are five best practices that organizations should consider when performing corporate financial modeling:

  1. Ensure the accuracy of historic data – remember the adage “garbage in – garbage out?” Having accurate and up-to-date historic financial data provides a critical foundation for corporate financial modeling.
  2. Identify key drivers – based on an analysis of historic financial and operational data, key business drivers can be identified and used as levers in modeling future revenue and expenses. Examples include orders, shipments, average price, new customers, customer retention rates, headcount, events, and others.
  3. Create multiple scenarios – once a baseline financial model is built, alternative scenarios should be created and analyzed based on the flexing of key drivers. The traditional approach is to create a base case, high case, and low case scenarios – but many organizations generate a wide range of scenarios that are used to guide critical decisions.
  4. Leverage charts and graphs – while some Finance executives prefer to review and analyze grids of numbers, many find it easier to spot trends and key financial signals through data visualization. So creating charts and graphs to present and analyze financial models is a great way to help users quickly gain insights that can be used to support critical decisions.
  5. Perform stress testing – when the financial model is done, the work is not over. The next step is to start stress-testing extreme scenarios to see if the model behaves as expected and yields realistic results.

Selecting the Right Tool for the Job

If you Google the term “financial modeling” you’ll get a number of results that highlight how Microsoft Excel® can be used to support financial modeling.  And while Excel is the “go-to” tool for financial professionals, it’s more suited to personal productivity tasks and less so to supporting enterprise planning requirements. Why?  Because Excel is error-prone, has no concept of workflow, lacks controls and governance, and has very limited audit trails.  It also wasn’t designed to manage large volumes of data and is two-dimensional in nature.

In corporate financial modeling, large volumes of historic data may need to be integrated, validated, and structured across multiple dimensions to fully support the requirement at hand.  Many Finance professionals have tried to handle this in Excel, but over time they find these models and multi-tabbed workbooks become difficult to maintain, and don’t perform well.  The alternative many organizations are turning to are purpose-built corporate planning and financial forecasting software applications, such as those that are found in modern corporate performance management (CPM) software platforms.

Financial Modeling in Action

One example of an organization that outgrew the capabilities of Excel for modeling and planning and migrated to a purpose-built corporate planning application is Fibrogen. FibroGen recently transformed from a drug development company to a global multi-channel commercial business. Their transition success depended on rapidly building out sales, channel development, and marketing as well as aligning the business and operational goals of their scientists, business leaders, and the Finance team.

Scenario Modeling

Realizing these goals required a more sophisticated corporate performance management (CPM) solution than their Excel®-based planning models and a 20-year-old legacy budgeting system that was fully matured and accepted within the organization. Fibrogen found that OneStream’s unified and extensible CPM software platform answered the company’s vision to gracefully accommodate their requirements to enable activity-based planning across two unique entities.

FibroGen’s China entity required a top-down model for planning and financial modeling while the United States model depended on non-finance users who are VPs and Executive Directors of their departments to provide the input that is needed for program-level and consolidated plans.

Said Alex Lee, Senior Director, Corporate FP&A, “With impending growth and transition, we sought a solution that can support a program-driven planning process and complex calculations and modeling with the ability to expand to include consolidation, reporting, accounting close automation, SEC reporting, and tax provisioning. We had a very specific vision in mind. It has been 10 months since go-live, and I’m still profoundly touched by the magic that is OneStream.”

Learn More

To learn more, download the Fibrogen case study and contact OneStream if your organization is ready to take the leap from Excel to an intelligent finance platform designed to conquer business complexity and help you lead at speed!

Download the Case Study

Ever since CPM applications came to the market, discussions around the performance of the financial consolidation processes have flourished.  Different vendors have often claimed their systems can run faster, complete multiple consolidations in parallel or reduce the time from hours to minutes.  All of that is great since time can obviously impact the overall reporting process, but the actual functions included in the financial consolidation must be considered before making any kind of comparison.

Still, we’re often asked the same question: Will my consolidation be quicker in OneStream than it was in Hyperion Financial Management (HFM)?

Sounds like a perfectly reasonable, simple question.  And the short answer is obviously YES.  Otherwise, why would hundreds of companies have migrated from HFM and other legacy CPM applications to OneStream’s unified CPM software platform?

Your follow-up question, of course: ‘Okay, how much faster?’

We get this question a LOT too – but it’s not an easy one to answer.  Why not?  Well, despite first appearances, we’re not really comparing apples with apples.  OneStream is architected as a unified CPM platform and does things differently from legacy CPM point-solutions such as HFM.

Let’s look at some of the differences.

(We promise to avoid getting overly technical!)

 

Performance Gains

Despite the above promise, we do need to talk a little about systems architecture and servers in Financial Consolidation software since both play a role in performance.  Even ‘in the cloud’, all our numbers are still ultimately processed on real computers – with real processors, memory, disk drives and network links.  Thus, the architecture and servers matter.  We must make the best use of what we’ve built and paid for (directly or indirectly).

OneStream is the solution for Financial Consolidation

Given that, let’s unpack the performance differences between HFM and OneStream.  HFM uses multiple processors/cores to run parallel calculations by entity.  OneStream does the same but for Member Formulas (rules) within the same entity.

Why the difference matters will become clear in the following example.  Pretend a server has 8 processors/cores.  HFM will use all 8 because it’s still simultaneously processing 8 entities.  That parallelism is fine at the bottom of the consolidation, assuming the parent has at least 8 children (not always the case), but not so great at the top of the entity hierarchy where the top-level holding company is being processed by only 12.5% of the available computing power.  Worse, that top-level entity probably holds the most granular data and will therefore take longer to process anyway.

Alternatively, OneStream uses all the available processing power for all the entities, bottom to top, and that makes a difference.  How much of one?  Well, it depends on your exact entity structure, the shape of your data, the details of your rules and a host of other variables – which means we’d be doing you a disservice to simply quote a meaningless percentage.  But the difference in performance is considerably more than nothing.

Architecture

The OneStream platform has also been architected to better use the available processing power.  Specifically, OneStream not only has sophisticated processes to move jobs to the server with the most available capacity but also has plenty of features that allow for separating different jobs (e.g., data load, consolidation, user interface, etc.) to different server groups.  That functionality ensures users don’t suffer a degraded experience during a consolidation or scheduled data load process (See Figure 1).

OneStream Load Balancing Across
Figure 1 – OneStream Load Balancing across Servers

Data Granularity

The level of data granularity ultimately impacts performance.  Some customers, for instance, had massive entity structures in their legacy application that included both legal entities and a lower level of detail splitting the numbers by organisation – at the segment level or, in some cases, even down to cost-centre level. And the cost centre level data doesn’t exactly seem like a logical application of ‘consolidation’ accounting – that only happens at legal entity level.

So why slow things down by running a process that’s unnecessary at that level?  OneStream applications can instead be designed in various ways to avoid all that unnecessary effort.

One option is to recognise that the lowest level of data granularity doesn’t even need to be in a ‘cube’. Via OneStream’s Relational Blend technology, the detailed data can be loaded into relational tables in a single OneStream application and presented through multi-dimensional hierarchies.  Only the entity-level summary of that data needs to be presented in a cube, making the data set for consolidation appropriately smaller.  Of course, you can still drill down to see the detailed data within the same application – but most users won’t even realise a ‘difference’ exists in the structure.

 

Consolidation Approach

The traditional approach to financial consolidation (e.g., in HFM) involves writing all the accounting logic (for eliminations, ownership adjustments, equity pickup, etc.) in Business Rules.  Those rules are simply coded logic that gets run against the data for every Entity, sometimes multiple times in the same consolidation run.

Many of our customers use a similar approach in OneStream – in which numerous detailed differences exist around how those rules are structured, how they perform or how easily their performance is tested.  In fact, many of the rules aren’t even needed or are much simpler due to the many consolidation-specific built-in features of the OneStream platform.

However, an alternative approach to consolidation exists that’s simply not available in HFM: the Investment Register approach (see Figure 2).  Some of our European customers with highly complex consolidation requirements particularly favour this approach, but it can be applied anywhere.

The Investment Register comprises a list of investments and key related details (e.g., acquisition date, acquisition cost, reserves and exchange rate at date of acquisition) maintained in a relational table.  In a process separate from the ‘main’ data-driven consolidation, we then utilise the Reporting Compliance Marketplace solution to generate detailed consolidation adjustments as Journals.  Most rule complexity is therefore eliminated, so the consolidation itself is little more than a ‘translate and aggregate’ process.

As a result, the register approach makes consolidation a whole lot faster – but better still, think about the complete close process.  How often does the data you’re consolidating change during the month-end close?  Quite a lot, actually.  Every time another entity has submitted.  Every time an entity submits late adjustments or supplementary detail.  Every time an inter-company balance gets sorted out after month-end because the process isn’t in place to fix it beforehand.

Now think about how often the group ownership data changes during the close.  Rarely.  Thus, if already created using the Investment Register, the consolidation journals don’t need to be recalculated every time we re-run the consolidation.  In fact, we can usually even get this bit of the close done before Working Day 0, altogether removing them from the busy close period.

 

Summary

Financial Consolidation is ultimately a business problem to be solved.  For many of our largest, most complex customers, consolidation is one of the most immediately obvious ‘big picture’ performance topics.

How that problem gets solved varies depending on the system being used.  But making comparisons between those systems is not always straightforward, so we can’t (and won’t) answer the ‘Okay, how much faster?’ question with a universal percentage.

Consolidation also isn’t an isolated problem amid the many other challenges facing the Finance function. And that’s why OneStream makes a difference.  It’s a unified CPM platform that allows for innovative and highly performant solutions to many different business problems, within and beyond the Finance function – and the entire OneStream community is dedicated, as it is with all our customers, to ensuring the success of your implementation.

 

Learn More

To learn more, download our whitepaper on Conquering the Complexities in the Financial Close.

Download the White Paper

As global organisations respond to macro-economic and geopolitical pressures, collaboration across back-office departments has never been more critical. For professional services firms, in particular, driving innovative ways to enhance client relationships and internal business partnerships is key. Firms must be prepared to respond to the speed of change being experienced in professional service and client markets. Connecting to and getting quality data from an ever-increasing number of data sources is essential to creating value for internal and external stakeholders.

Meeting the Challenges in Legal and Professional Services

OneStream Software recently hosted a leadership dinner for legal and professional services firms in London. We welcomed Andrew Giverin (Partner, NewLaw Services, PwC), Ade McCormack (Intelligent Leadership Hub), and OneStream’s own General Counsel Holly Koczot. We heard that the changing pressures on the office of the General Counsel (OGC) have driven the requirement to become a more strategic business function, with a focus on new commercial and operating models to drive priorities.

Professional and legal service providers need to deliver on the evolving business requirements of the OGC to support value creation to executive stakeholders, whilst driving collaboration and efficiency. The focus on client relationships has never been more important, building a deep understanding of those strategic priorities to enable value creation. This, coupled with offering service scalability to deliver change at speed, is becoming a key demand from clients to retain business.

To fully deliver the value it is critical to putting an effective management layer in place with a unified, intelligent finance platform to bring together key finance processes in a platform designed to evolve and scale with your firm.

Why OneStream?

OneStream provides a market-leading Intelligent Finance Platform (see figure 1) that reduces the complexity of financial operations.  OneStream unleashes the power of finance by unifying corporate performance management (CPM) processes such as planning & forecasting, financial close & consolidation, reporting, and analytics through a single, extensible solution. The solution empowers users with the insights to support detailed planning and analysis for faster and more informed decision-making.

Cloud Financial Close
Figure 1: OneStream’s Intelligent Finance Platform

 

OneStream delivers significant value to organisations through a number of capabilities including:

Hundreds of legal and professional services firms around the world have adopted OneStream’s unified platform to help streamline Finance processes, provide greater business insights, and support more effective decision-making that improves client relationships.

Learn More

Improved collaboration and service scalability is vital to creating value and enhancing client relationships. This of course requires trust and a complete picture of results from across multiple data sources. For example, professional services firm BDO implemented OneStream’s unified platform to handle growing data volumes, and empower key decision-makers with accurate information, rich dashboarding, and reporting. Read more in their success story.

Global legal firm Hogan Lovells is also well on their way to finance transformation. We co-hosted a webcast with them in which they shared how automation is powering their firm’s efficiency. You can watch the free recording here.

We hope these free resources help you as you lead your own organisation’s journey to unlock information and achieve digital transformation. You are also invited to join an upcoming event or contact us for a personal call.

Join an Upcoming Event

Finance leaders continue to face ongoing challenges and economic disruption in 2022. From inflation and supply chain challenges to the war on talent stemming from The Great Resignation, finance teams are tasked with navigating a constantly changing landscape. Using the right tools for their organization’s unique needs can be the make-or-break factor to drive long-term success and differentiate from the competition.

But there is no one-size-fits-all solution. With so many options in the marketplace, how can you cut through the clutter to find the option that works best for your organization? Enter: The BARC Planning Survey 22, which leverages the feedback and experiences of your trusted peers in Corporate Finance to help you determine which solution best suits your organization’s unique needs.

More About BARC: The Business Application Research Center

The Business Application Research Center (BARC) is an industry analyst and consulting firm for business software.  BARC analysts have supported companies through strategy, organization, architecture, and software evaluations for more than 20 years.  For more information, visit www.barc-research.com

To support Corporate Finance teams, BARC covers the following critical areas:

BARC Planning Survey 22

The Planning Survey 22 is based on findings from the world’s largest and most comprehensive survey of planning software users, examining user feedback on planning processes and product selection. Conducted from November 2021 to February 2022, The Planning Survey compiles responses from 1,325 individuals analyzing 19 products or groups of products in detail.

Specifically, the survey examines user feedback on planning product selection and usage across 33 key performance indicators (KPIs) including

For more information on the survey, visit The BARC Survey website.

Laser-Focused on Customer Success

OneStream’s corporate mission is to deliver customer success, ensuring every customer is a reference – one success at a time. As we remain dedicated to this mission, we’re honored to earn a 100% recommendation score from all surveyed users for the second consecutive year.

Furthermore, OneStream earned 15 top rankings (see Figure 1) across four different peer groups. The company was measured across several different KPIs, including:

Planning Survey
Figure 1: The Planning Survey 22: OneStream Highlights Dashboard

Additionally, OneStream earned 33 leading positions across its four peer groups, including product satisfaction, customer satisfaction, flexibility, workflow, recommendation, simulation, cloud planning, and financial consolidation.

“OneStream’s outstanding performance in this year’s Planning Survey reinforces the vendor’s dedication to delivering 100% customer success. As a market-leading CPM platform, OneStream helps organizations improve employee productivity, increase the transparency of planning and improve the integration of planning with reporting and analysis.  The platform’s comprehensive capabilities for financial consolidation and close, planning, budgeting and forecasting, reporting, analysis, and financial data quality management – all in a single application – makes OneStream a modern, future-proof solution for organizations seeking digital transformation,” said Dr. Christian Fuchs, Senior Vice-President and Head of Data & Analytics Research at BARC.

Learn More

OneStream is honored to receive standout results this year in The BARC Planning Survey. The report recognizes OneStream’s capabilities across financial close, consolidation, planning, and analysis as a best-in-class platform. The recognition is all the more meaningful as the rankings come directly from our committed customers and users across the globe.

To learn more about OneStream’s results, click here to download the full BARC Planning Survey 22.

Download the Report

The upcoming celebration of St. Patrick’s Day on March 17th conjures up many images and traditions. Attending parades, wearing green clothing, eating corned beef and cabbage, and drinking green beer are all parts of the modern celebration of this feast.  But what’s the real meaning of St. Patrick’s Day and what can it teach us about corporate performance management (CPM)?  Read on to find out.

History of St. Patrick’s Day

So why exactly do we celebrate St. Patrick’s Day on March 17th?  If you research this topic, you’ll be reminded that St. Patrick is the patron saint of Ireland. Born in Roman Britain in the late 4th century, he was kidnapped at the age of 16 and taken to Ireland as a slave. He escaped but returned about 432 CE to convert the Irish to Christianity. By the time of his death on March 17, 461, he had established monasteries, churches, and schools. Many legends grew up around him—for example, that he drove the snakes out of Ireland and used the shamrock to explain the Holy Trinity. Ireland came to celebrate his day with religious services and feasts.

Modern St. Patrick’s Day Traditions

Roll forward a few hundred years and it was emigrants, particularly to the United States, who transformed St. Patrick’s Day into a largely secular holiday of revelry and celebration of all things Irish.  This took hold mostly in cities with large numbers of Irish immigrants, such as Boston, New York City, and later Chicago who staged the most extensive celebrations, including elaborate parades. In Chicago, they even dye the river green on St. Patrick’s Day!

Nowadays, Irish and non-Irish alike commonly participate in the “wearing of the green”—sporting an item of green clothing or a shamrock, the Irish national plant, on Saint Patrick’s Day.  Restaurants serve corned beef and cabbage specials and even beer is often dyed green to celebrate the holiday.

Over time St. Patrick’s Day symbols such as leprechauns and pots of gold at the end of the rainbow began to make their way into the imagery associated with the holiday.  The folklore around leprechauns is that if you catch one, he will tell you where his pot of gold is hidden. Beware, however, as the leprechaun is smarter than the average wood nymph, and you may be tricked into looking for gold at the ever-elusive end of the rainbow.

This cautionary tale reminds us that relying on luck, magic, and greed can be a recipe for disaster. Instead of working hard and making strategic moves to build financial stability, people can be tricked into wasting their precious time and resources searching—metaphorically—for a pot of gold at the end of a rainbow.

Lessons for Modern Enterprises

The same goes for corporations and other enterprises.  Relying on the luck of the Irish to achieve your goals and objectives is unlikely to yield positive results.  There’s no substitute for having a repeatable, closed-loop CPM process that links your strategies to plans and execution.  Organizations need to set goals, develop plans, monitor and analyze results and adjust plans and resources as needed to have a good chance of achieving financial objectives.

OneStream St. Patricks

And if your organization is relying on spreadsheets and email, or multiple legacy CPM applications to manage your mission-critical financial planning and reporting processes – don’t count on St. Patrick to chase them away like he did the snakes in Ireland.  Once your organization outgrows these approaches, your team will need to identify and evaluate alternative solutions, then do the work to implement the software, train your users and begin reaping the benefits.

That’s where modern, unified, and cloud-based CPM software solutions such as OneStream really demonstrate their value.  OneStream’s unified Intelligent Finance Platform was designed to replace multiple legacy CPM applications, spreadsheets, and cloud point solutions with a single application that supports financial close and consolidation, planning, reporting, and analysis. And the OneStream platform can be extended via a MarketPlace of value-added solutions that can be downloaded, configured, and deployed to quickly address additional requirements without adding technical complexity.  These include processes such as account reconciliations, tax provisioning, people and capital planning, lease accounting, and more.

Finding the Real Pot of Gold

The rewards are proven.  Organizations that have adopted OneStream’s unified platform have realized significant value, in four main areas:

Learn More

St. Patrick’s Day is a fun holiday to celebrate whether you are Irish or not.  But while you are celebrating, don’t get fooled by visions of leprechauns and pots of gold.  If your organization is ready to make the leap from legacy CPM applications, spreadsheets, or point solutions to a modern, unified CPM software platform, contact OneStream and we’ll be happy to demonstrate the value our solution can deliver.  To learn more, download our white paper titled “Exploring Value Realization with OneStream.”

Download the White Paper

Dispelling the Myths About CPM Implementations

This article was originally published on CFO.com.

Myths and misinformation about corporate performance management (CPM) systems and their use in finance departments abound. Many revolve around these tools’ complexity, making it hard for a CFO to see their value at the end of the implementation road. The myths, however, are easily debunked. We address five of them below.

Myth 1: Implementing CPM Will Take Too Much Time to Realize Value

To expedite a CPM project (faster, less effort, minimal cost), CFOs should:

Myth 2: CPM Focuses on Financial Data, Not Operational Data

There is a grain of truth to this statement; however, it vastly understates the importance of operational data.

Myth 3: “We Don’t Need a CPM System Since We Are Migrating to a Single ERP”

Myth 4: The Integration of Acquisitions Will Be a Challenge

While they can support some rudimentary functions, G/Ls often fall short in support of the following:

Myth 5: CPM Solutions Require Significant Technical Support

Modern CPMs are cloud-based solutions and, therefore, less unwieldy than those of previous generations.

The ROI of CPM

There are costs associated with deploying CPM solutions. First, there is the software subscription. Given the cloud-based nature of the modern CPM system, however, the SaaS model has meaningfully driven down the costs (and burdens) of implementation. Second, there is the software configuration. Companies can configure internally or leverage outside expertise. There will be support configuration and labor costs (although less so with an experienced partner). Then, of course, there are the costs of system support (the administrative resources to maintain the system).

CFOs must understand the benefits of CPM to quickly recoup the investment and lead to value creation in both hard and soft dollars. Among the former, the technology drives down costs by allowing business-unit comparisons to identify and leverage best practices. But there is a soft dollar return that CFOs should not overlook. CPM technologies enable CFOs to realign their finance department work to higher value-add functions (decrease in data collection, reconciliation, and consolidation; increase in business analyses and support). And, the insights realized as a result of a CPM system investment help finance chiefs make more informed business decisions and more easily course-correct when circumstances change.

In the two years since the global pandemic started, corporate performance management (CPM) software has proven its value to thousands of organizations.  It has allowed them to maintain a steady pulse on their revenues and costs, perform frequent forecasting as the pandemic unfolded, and run scenario models to support critical management decisions.  It’s with this backdrop that Nucleus Research published its 2022 Value Matrix for CPM Software, highlighting key market trends and ranking the top 16 CPM software vendors.  Read on to learn about the findings of the report and how OneStream was positioned in the market.

CPM Software Helps Organizations Navigate Choppy Waters

Fluctuating demand, price inflation, supply chain disruptions, and labor shortages have put a lot of pressure on organizations to become more agile and efficient in their Finance and business processes. These pressures have driven increased demand for CPM software solutions according to the 2022 Nucleus Research CPM Technology Value Matrix report, which was published in early February.

According to Nucleus Research, “To combat uncertainty and rapidly shifting market conditions, businesses must plan and execute on shorter time horizons than ever before. In the past, where quarterly sales and operational plans might have been sufficient, we see organizations implement weekly strategies, sometimes down to the day. “CPM Technology enables this business agility, encompassing both Financial Planning and Analysis (FP&A) and Financial Consolidation and Close (FCC) functionality.”

Unlike other IT industry research reports that evaluate FP&A or FCC software separately, Nucleus Research makes the case that a single platform that supports both of these core processes provides a higher level of business value vs. point solutions. Here are some of the key market trends highlighted by Nucleus Research in the report:

Inside the CPM Value Matrix

In the CPM Value Matrix report, Nucleus evaluated the top 16 CPM software vendors based on their usability and functionality, as well as the value that customers realized from each product’s capabilities. According to Nucleus, the research is intended to serve as a snapshot of the CPM technology market, help inform customers about how vendors are delivering value and take stock of what can be expected in the future based on present investments.

So what did the 2022 CPM Value Matrix reveal?  I’m happy to report, that for the 5th year in a row, Nucleus Research has recognized OneStream Software as a Leader in the CPM Value Matrix. Here’s what the analysts had to say about OneStream in the report:

“OneStream Software is a leader in the 2022 CPM Value Matrix. OneStream breaks down data siloes between functional departments and provides greater visibility by integrating financial and operational data from internal and external data sources, such as ERP, HCM, CRM, and other systems. The platform enables organizations to cover a variety of use cases and replace multiple legacy applications, point solutions, and spreadsheets across financial and operational reporting, planning, and analysis use-cases.”

CPM Technology Value Matrix

Learn More

We are proud to be recognized as a Leader in the CPM Value Matrix for the fifth consecutive year. Our continued recognition by Nucleus Research and other IT industry analyst firms is a testament to the value users gain from our unified platform to conquer complex business processes and drive efficiencies while navigating rapidly changing market pressures.

To learn more, download a copy of the 2022 Nucleus Research CPM Value Matrix report here.

Download the Analyst Report

In today’s competitive and volatile economic environment, it’s important for everyone in an organization to have visibility into corporate strategy and to make sure their personal and departmental goals and plans are aligned to corporate goals and objectives.  This is easier said than done and requires a structured management process to be in place across the enterprise.

That’s the role of a corporate performance management (CPM) process and software platform.  Read on to learn more about how CPM software helps organizations link their strategy to plans and execution.

Supporting a Continuous Management Cycle

Sometimes those who are new to the concept of corporate performance management (CPM) and CPM Software ask how it’s different from enterprise resource planning (ERP) processes and systems.  They certainly sound similar on the surface.

The easy answer is that ERP systems help organizations “run” their business on a day-to-day basis.  That means taking orders, manufacturing products, distributing them, billings and collections, purchases and payments, depreciating fixed assets, and general accounting.

As a complement to ERP systems, CPM processes and software help organizations “manage” the business.  The primary role of CPM is to help organizations link their corporate strategy and goals to their plans and execution in a continuous management cycle.  (see figure 1)

Figure 1: The Performance Management Cycle

Dissecting the 6 Steps in the CPM Cycle

Let’s look at the CPM processes in a bit more detail and highlight how they work together to create a continuous management cycle.

The results of the analysis step in the CPM process will often impact key business decisions regarding hiring, spending, allocation of resources, investment, or divestments. As depicted in the closed-loop CPM cycle above, this means updating business models, updating plans and forecasts, and then continuing to monitor the results in the next cycle.

The key to success in CPM is integrating and aligning these steps so they work in a continuous cycle, linking corporate strategy to plans and execution, to create a competitive advantage.  This frequency of execution can vary depending on the industry and nature of the organization.  Most organizations run this cycle at least quarterly, while organizations in fast-paced industries may execute it on a monthly or weekly basis.

Pros & Cons of CPM Technology Approaches

Executing a closed-loop CPM cycle that links corporate strategy to plans and execution is nearly impossible without the use of technology.  And there are several technology alternatives available to support CPM including spreadsheets, point applications, or unified CPM software solutions. Here’s a quick look at the pros and cons of each of these alternatives.

Spreadsheets and email – this can be an attractive approach given their low cost, wide availability, and familiarity to most Finance and business professionals. And the spreadsheet approach can be viable for very small enterprises.  But as organizations grow and evolve in size and complexity the spreadsheet approach often breaks down – causing errors, constant reconciliation of data, and delayed planning and reporting processes.

Figure 2:Fragmented Point Solutions

Point Applications – there are many point applications available in the market designed to support specific corporate levels processes such as goal setting, planning, financial close management, consolidation, and reporting.  And while these applications offer more functionality and control than spreadsheets, there are some downsides.  For instance, organizations relying on multiple point solutions to support the complete CPM cycle will find their users spending a large amount of time moving or copying data from one application to another, reconciling differences, and having to deal with multiple points of maintenance.  (see figure 2)

Unified CPM Software – this approach provides the functional advantages of purpose-built applications over spreadsheets, but in a single software platform that unifies the data and processes.  With unified CPM software solutions, users spend less time moving and reconciling data and managing software applications and more time on value-added analysis of the business and supporting more effective strategic decision-making across the enterprise.   (see figure 3)

Figure 3: OneStream Unified CPM Platform

Conclusion

Linking corporate strategy to plans and execution is essential for success in any enterprise – be it small, medium, or large.  Corporate performance management (CPM) is a management process designed to link corporate strategy to plans and execution, in a continuous cycle consisting of six key steps.  When supported by the appropriate CPM software technology, an effectively managed CPM cycle leads to improved communication, optimized resource allocations, agile strategic decision making, and better business outcomes.

To learn more download our white paper titled “Taking Performance Management to the Next Level with Intelligent Finance” and contact OneStream if your organization is ready to move beyond the limitations of spreadsheets and legacy CPM applications to unified CPM software platform.

Download the White Paper

The end of the calendar year is an interesting time for those working in the Accounting and Finance departments.  Of course, there’s a general excitement and rushing around to get ready for the December holidays. But for most organizations, it’s also the end of the fiscal year. That means the end of the annual budgeting process and the start of the year-end financial close and reporting process.  Both of those year-end closing procedures can account for bringing a lot of extra work and stress to layer on top of the holiday-related stress.

Many of us here at OneStream came from the Accounting and Finance profession and have experienced the complexity and stress of annual budgeting, completing the year-end checklist for accounting, close, and other time-consuming tasks during this period.  And we have made it our life’s work to help ease the pain and stress of these year-end closing processes for our customers through the OneStream platform and our MarketPlace of productivity and business solutions.

So for those of you who haven’t made the leap from pulling data from spreadsheets, year-end closing checklists, and legacy CPM applications to OneStream’s unified platform, here’s a little year-end closing gift.  This is a song written by one of our staff team members, Terese Wylie, that will hopefully lift your spirits in your office as you start the year-end closing process.

The 12 Days of Year-End Close (sung to the tune of The 12 Days of Christmas)

On the first day of Year-End Close, my CFO said to me “We should have licensed OneStream.”

On the second day of Year-End Close, my CFO said to me, “We have Two more topside entries and we should have licensed OneStream”

On the third day of Year-End Close, my CFO said to me, “Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream”

On the fourth day of Year-End Close, my CFO said to me “Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream”


 
On the fifth day of Year-End Close, my CFO said to me “Five Irritating Auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream”

On the sixth day of Year-End Close, my CFO said to me “Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream” 

On the seventh day of Year-End Close, my CFO said to me “Seven spreadsheets are not linking, Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream” 


 
On the eighth day of Year-End Close, my CFO said to me “Eight formulas are causing errors, Seven spreadsheets are not linking, Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream” 

On the ninth day of Year-End Close, my CFO said to me “Nine accounts are out of balance, Eight formulas are causing errors, Seven spreadsheets are not linking, Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream” 


 
On the tenth day of Year-End Close, my CFO said to me “Ten accountants are crying, Nine accounts are out of balance, Eight formulas are causing errors, Seven spreadsheets are not linking, Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream” 

On the eleventh day of Year-End Close, my CFO said to me “Eleven reports are not tying, Ten accountants are crying, Nine accounts are out of balance, Eight formulas are causing errors, Seven spreadsheets are not linking, Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and we should have licensed OneStream”

On the twelfth day of Year-End Close, my CFO said to me “Only 12 months to our next year-end close, Eleven reports are not tying, Ten accountants crying, Nine accounts out of balance, Eight formulas are causing errors, Seven spreadsheets are not linking, Six IT supports are ignoring me, Five irritating auditors! Four managers are leaving, Three subs have not submitted, we have Two more topside entries and WE SHOULD HAVE LICENSED ONESTREAM!”

Happy New Year everyone! Download our Reimagine the Close White Paper and feel free to contact OneStream if you need help relieving the stress of your next year-end closing.

This article was originally published on CFO.com

Finance chiefs are under pressure to leverage more sophisticated technologies to professionalize and modernize their operations. They also face increased scrutiny around the accuracy and timeliness of their data. Corporate performance management (CPM) tools, in particular, can play a critical role in these situations but are often poorly understood.

Myths and misinformation about CPM technologies and their use in finance departments abound. However, the bottom line is that CPM is an essential component of any broader strategy to enable finance digitally. Therefore, CFOs need to know how CPM can help meet and execute value-creation plans and be leveraged for minimum cost and maximum return on investment.

Beyond being misunderstood, CPM terminology can also be unclear. CPM solutions represent a suite of technology tools, specifically those that focus on the digital enablement of finance (including financial close and consolidation, budgeting, forecasting, strategic modeling, and financial reporting functions). CPM software complements enterprise resourcing planning (ERP) solutions and analytical reporting environments (data warehousing, data lakes, and data marts).

While some CFOs are ahead of the curve in using CPM tools, most are not. They often see spreadsheets as the quickest and fastest way to stand up some level of CPM-related competencies. Unfortunately, that approach is usually not very successful.

Comparing CPM Software to ERP Systems

To understand CPM solution capabilities, understanding their context is crucial. For example, how does CPM software complement ERP systems? When and where do the systems interact? Can an ERP system be used in place of a CPM solution?

Sophisticated CFOs understand where an ERP system sits within an organization’s overall financial stack: it supports finance’s back-end operations (order-to-cash, procure-to-pay, record-to-report, for example). Equally, these CFOs understand the need for accurate and timely information delivered through a data warehouse, data mart, or data lake.

A CFO’s experience with ERPs and analytical solutions (combined with unfamiliarity with CPM tools) often leads to “shoehorning” close/consolidation and budgeting/forecasting capabilities into the ERP system or data warehouse. That setup is then augmented with large, complex spreadsheet workbooks.

Naturally, there is an inclination to leverage existing technology (ERP, data warehouses, spreadsheets) to address CPM-centric financial functions. After all, CFOs want to make every portion of their tech spend count.

But leveraging technology to support functions for which they were not intended often leads to complex architectures, data integration challenges, diminished functional capabilities, effort-laden processes, and error-prone solutions.

The Automotive Analogy

An automotive analogy can be helpful to simplify and articulate the interactivity and criticality of multiple systems.

The ERP system is the engine in the car; it makes everything run. The data analytics and reporting platform is the dashboard. The operations of the vehicle are faster and more efficient with an informative dashboard. The dashboard tells the driver point-in-time information (how fast the car is going, the amount of fuel in the tank, whether the tires need air).

A CPM solution is like the GPS; It helps navigate the car. It understands where the driver is going and helps them get there efficiently while re-routing for unforeseen obstacles.

CPM systems model multiple scenarios, allowing CFOs to understand various financial impacts and to incorporate an operational context (weaving in operating data side-by-side with financial data). This information is critical in a volatile economy but impossible to attain with ERP and analytical tools alone. The CPM system is purpose-built to support these functions.

Understanding the Relevance

CPM systems originated and matured in large organizations. However, there are many reasons that CFOs of midsize and private-equity-owned companies should consider adopting them. These include the following:

Price. The advent of the cloud has driven down the price point for many subscription-based solutions, including CPM. As a result, mid-market companies can now take advantage of tools historically available only to enterprises, while realizing meaningful ROI from their implementation.

Complex Architectures. Some PE-owned companies have more complex architectures than even the largest publicly held companies since they usually create value through roll-ups, carve-outs, and other kinds of acquisitions. These structures result in complex technical architectures, multiple general ledgers, various back-end operational systems, and numerous financial systems. The CFO is charged with instituting and standardizing the controls and processes required to support internal and external financial reporting and projections.

Rapid Rate of Change. Given the focus on value creation, the rate of change within a PE portfolio company or an acquisitive midsize company can far exceed that of larger organizations. PE-backed companies are in acquisition mode, bringing in new charts of accounts, new organizational alignments, new product lines, and new sales channels. Finance must also act on deal origination and integration within a more accelerated timeframe to meet the demands of the financial sponsor.

Balancing Operational Autonomy with Controls. All kinds of organizations need technology systems that empower them to act with autonomy in a non-disruptive capacity while simultaneously giving the CFO the stewardship and control the office of finance requires to execute its job.

Lean Teams and Limited Resources. Many companies have limited resources. CPM solutions address limitations by minimizing manual data collection, organization, and consolidation processes and maximizing higher value-add functions such as modeling projections and analyzing results to inform decision-making.

Learn More

Even when a CFO understands the importance of CPM to an organization, they may be hesitant to invest in the technology. The second part of this column, to be published later on this blog, will address CPM myths.  To learn more about CPM solutions visit www.onestream.com.