I am in a company that is preparing to do an IPO and therefore we need to have an accurate forecasting model. We currently use
Forecasting standards from private to public
Answers
I've used Cognos within a large public company which was reasonably useful and also Outlooksoft which is Excel based (in a public company). Cognos, sometimes slow in processing, was better in terms of control it seemed. Using Outlooksoft, one had to monitor the spreadsheets and if someone got hold of a spreadsheet and wanted to make changes without your knowledge, they could. That was frustrating, especially if it created re-work and caused trust problems with colleagues. Seemed like a decent product, though.
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You can prevent changes without your knowledge in Outlooksoft which is now BPC.
We have built in CDO email send functionality into our input templates that notify recipients as to what numbers were booked and by whom, you can also lock/unlock intersections server side with work status functionality. In terms of controls you can also enforce business rules and data relationships on the back end to prevent
I am using Adaptive Planning for our budget and forecasting. It is a SaaS application with the look and feel of excel. I am able to budget and forecast using model and cube sheets for specific gl accounts and get very spefice as to the vendor and when we will realize the expense. I found it to be very affordable and quick to setup. We are a small company and have only three users.
Adaptive Planning is the best SaaS system out there.
I used Hyperion at an unnamed Fortune 100 company. Had its upsides and downsides. Upside is that it's massively scalable and can cross boarders, currencies and levels of the organization. Downsides however are that you have to customize it heavily (not sure how current gen does this, i'm speaking to older gen) which was slow and expensive and dramatically slowed the process in the FP&A group. In fact, frustratingly for this dec-billion dollar company we still used Excel ON TOP OF Hyperion for some rollups and reports. Doing it again I think i would look at some of the new SaaS models out there, although I haven't used them myself so I'll not recommend any. But what I've heard sounds promising and I use a lot of other apps that have changed my thinking about enterprise software.
If your organization has multiple legal entities, and/or overseas
*Forecasting (which implies reporting actuals against it, in a multi dimensional manner, likely combining financial and non-financial data), *Statutory Reporting and Consolidation (by legal entity, in other dimensions, with tools to manage CTA, forex gains/losses, interco eliminations, etc etc).
What do you currently use for your ERP/
Other solutions that may be candidates (based on your needs( could include Host Analytics (does consolidations as well as forecasting/reporting), SAP Business Objects.
I am evaluating options for a client in a similar situation as you, so let me know if you'd like to follow [email protected].
I like Alight Planning for mid-market companies because it has the best modeling and it:
* is a driver-based (as defined by the user) planning tool,
* is designed for rolling forecasts which get away from the calendar year budget approach
* can update multiple scenarios at once
* incorporates URA (Units X Rate = Amount) design throughout with back calculations for actuals
* has object based linking which links any object to any other object (as opposed to cell based linking in spreadsheets)
I have used many tools in this arena for the past ~20 years including Hyperion (including Hyperion 1.1 way back in the early 1990's), Peoplesoft, SAP, Cognos, Clarity, and Excel. What I have found is that the most critical questions have little to do with the tool itself. Each of these tools have advantages and disadvantages - most of which ultimately rotate around flexibility versus structure. More flexibility necessitates less structure and vice-versa.
If you are having issues with accuracy and errors, I would suggest that you look first at your process. No tool is going to provide you with accuracy as you noted above. Accuracy is a function of understanding of your business and competance in using whatever tool you have employed. Without the requisite understanding, no tool (driver based or "F2 plus") is going to improve accuracy. In broader terms of process, the question usually becomes how do you employ others in your organization to assist with forecasting. This is where Excel models usually choke as it is difficult to build a distributed model using purely Excel. Many of the middle-tier planning solutions have chosen to use Excel as the front-end to a moderately sophisticated database engine. This provides a better balance of flexibility and structure and creates the ability to engage more people across your enterprise whether they be Finance, Operations, Sales & Marketing, and
While this is a list purely off the top of my head, I suggest you consider several dimension of the situation as you assess alternatives:
1. Goal of the forecasting process: what is the purpose of the information (bearing in mind that information that is not ultimately used to make a decision is trivia)? Complexity and need will revolve a lot around the frequency and purpose of this. Also, decisions will need to be made around the linkage of this process to broader strategic planning and budgeting.
2. Complexity of the business: do you have a single line of business or multiple? How complicated is the balance sheet side of the business?
3. Complexity of the financial model (which may be different than (1) above): Beware the "illusion of precision" in addressing this point - more detail does not mean more accurate. In many cases, in fact, adding greater detail can lead to greater inaccuracy.
4. Centralized/decentralized execution: What degree of involvement is needed from parties outside of Finance? The more extensive this is, the more complex the model, and there is a higher need for more model structure.
This is not a comprehensive list (and I am happy to offer a money-back guarantee on the advice!), but should get you down the road. Depending on the size of your business, its complexity and degree of centralization, you may find that Excel is a sufficient tool (heresy to many on this board I am sure).
In terms of the tools themselves, I do have a couple of thoughts. First of all, I would stay away from any planning solution provided by an ERP vendor (such as Peoplesoft and SAP). These are frequently very accounting-focused in nature (i.e. transactional). Planning is a very iterative function, and transactional planning systems are very slow and laborious to manage in my experience. That generally leaves you with two sets of choices: top-tier (Hyperion and Cognos being front-runners) and middle-tier (lots of options here). The top-tier solutions are very structured, but my general inclination is to opt for more flexibility than structure. There are also some big cost differences between the top tier and some of the middle tier solutions.
Lastly - if you think you have line-of-sight to a formal system need even though you don't have a compelling need today, go ahead and bite the bullet. Planning systems have notoriously soft-costs despite what any salesperson says or computes. Getting support for planning systems, as a result, is notoriously difficult.
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FP&A