implementing a cpm solution

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Corporate Performance Management Alberto Zenkner

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Agenda

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Agenda

Budgeting, Forecasting and Financial Modelling

Corporate Performance Management

Implementation Metodology

Budgeting, Forecasting and Financial Modeling

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Strategy What businesses are we in? How will we compete? Which choices will make us more money? Planning How will we align resources with our strategy? How will we measure our progress?

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Budgeting How will we ensure accountability and encourage behaviors needed to execute the strategy? Forecasting How will we adjust to reflect changing conditions?

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A business model will become a virtual reality

representation of how a real business opportunity will

develop.


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To enable this virtual world to be as realistic as possible it

needs to be logically constructed from a set of assumptions

that covers each influencing factor.


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These factors include both the business environment (for

example, inflation, potential customers and taxes) and the

organization (for example, product prices, staff numbers and

product volumes).


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The most comprehensive means of financial budgeting and

forecasting is to develop a series of projected financial

statements with the support of well defined business rules.


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Based on the projected statements, the firm is able to

estimate its future level of receivables, inventory, payables,

and other corporate accounts as well as its anticipated profits

and borrowing requirements.


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A financial model helps managers to explore complex

choices, using sets of assumptions to represent

alternative scenarios, whether they are for budgeting,

forecasting or strategic planning


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CPM supports development of annual budgets and longer-

term plans, including workflow technology to manage

formulation of budgeting processes, and the ability to model

scenario and “what-if” analysis.

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The planning component of CPM supports linking financial plans

to operational plans. These capabilities demand a strong ability

to integrate with existing systems outside of the CPM solution.

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CPM supports techniques such as activity-based costing and

activity-based management, including the ability to model the

impacts of different resource allocation strategies on

performance.

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CPM products include tools such as dashboards, cockpits, and

scorecards designed to quickly and easily communicate key

performance data to users.

Further, CPM products have tools for modeling the relationships

between performance criteria in order to arrive at an

organizational performance model.

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Planning

Monitoring

Reporting

CPM

Modeling

Analyzing

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Business Analysis &

Implementation Metodology

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BA & Implementation Metodology

BUSINESS ANALYSIS SOLUTION IMPLEMENTATION

The process of implementing a CPM solution can be divided

into eight phases that are comprised of three stages

AS-IS ANALYSIS

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BUSINESS ANALYSIS SOLUTION IMPLEMENTATION

In the first stage, will be evaluated technological issues and

the status of the budget process

AS-IS ANALYSIS

Phase 1

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BUSINESS ANALYSIS SOLUTION IMPLEMENTATION AS-IS ANALYSIS

• Identify the state of infrastructure hardware

• Identify the level of maturity of the planning model

• Identify the project main sponsor

Phase 1

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• Identify how many employees are involved in the budgeting

cycle

• Identify how long this cycle takes

• Determine the scope of the project

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The second stage will be defined the managers requirements

and specified of the business rules to meet these outputs

Phase 2

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Definition of the structure of financial statements, KPIs and

other outputs required by managers:

• Income Statement

• Balance Sheet

• Cash Flow



Phase 3

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Make the transition from Financial Accounting for

Management Accounting by converting the chart of accounts

of the company for the new defined structure;



Phase 3

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This phase involves only actual data that will performed at

first to test the outputs and subsequently used to compare

actual x planned results



Phase 4

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Defining templates for inputs of planned data



Phase 5

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Development of financial modeling in accordance with the

business rules defined by managers and accounting staff



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Only in a third stage, with well-defined business rules,

and a stable model, starts the implementation of

technological CPM solution.

Phase 6

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Software Installation;

Load of Dimensions;

Development of formulas, input forms and reports;

Workflow preparation.



Phase 7

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Testing and Validation



Phase 8

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Training of end users



implementing a cpm solution

Technology