SAP Cloud for Planning – We Changed the Old Rules

by Gerrit Simon Kazmaier, Vice President and Head of Engineering, SAP Cloud for Planning

In our last blog, Ivo Bauermann asked me about “Why design isn’t just for designers, but also engineers for whom “Code is law.”

We changed the rules when we designed SAP Cloud for Planning. SAP Cloud for Planning is truly a designed application, and I would like to share with you what that means for us.

Design is not a department. It is culture, behavior, attitude, and a key ingredient for an engineering organization. True design is pervasive in the software development process and the software itself. To design an application means to craft software that is tailored to a specific process, a use case, and eventually, a person. However, classical computer science is having its own technical value propositions such as decoupling, abstraction, independence, generalization, and so on. They are, when applied correctly, powerful concepts. But when overused they lead to suboptimal solutions, poor performance, and just-wired applications.

A very interesting characteristic of design is that it is an emerging property of systems. You cannot track it down to a single piece of an application such as a beautiful logon screen, one well-working function or a nice chart. It is the result, or better the symphony, of every piece in an application working together as a whole. In reverse, you cannot destroy a good design by removing one single part. However, when removing too much from it, good design suddenly vanishes. It’s more than the sum of all parts and only emerges when it’s present in every one of them.

Beijing Bird's Nest sunset scenery

Form and Function Meet in New Generation of Planning in the Cloud

Lawrence Lessing coined this famous term “Code is Law” in an essay on liberty in cyberspace. I found this to be very true for business applications as well. When any programmer writes any line of code it reflects his understanding of the subject matter. It precisely defines the laws of how something executes, how it is called and what results it produces. He becomes the lid of how a piece of software can be used.

Ever wondered why an application behaves so weirdly? During my university days I worked for multiple software companies as a programmer. One experience nicely shows this principle. In an ordering system, the first view for customer data was “change customer.” Weird, right?! I expected the common case would be to create a customer and so I asked the responsible developer and got a perfectly logical answer: “I have one customer record. To test new functions I just alter this one, much easier than to create one from scratch”. Code is law, enforced on every single customer

When you experience odd behavior, bad scaling or performance, most likely something – maybe you – is just violating the laws of the system. I used to be a programmer, and I still am. This doesn’t happen because we are bad guys secretly teaming up to torture users. It happens unconsciously – lack of domain knowledge, systems context, business development (scale issues). But still code is law.

Melvin Conway introduced the “Conway’s Law “in 1968. He stated “Organizations which design systems … are constrained to produce designs which are copies of the communication structures of these organizations.”

Conway’s law nicely states a key flaw in many software systems. People create interfaces and abstractions to decouple themselves and foster independence between groups. Often you find vertical departments or teams for the user interface, application logic, database schemas, and so on. The vast majority has a hard cut at the database because its development is not part of the company that develops the application. Exactly these organization-cuts are reflected in the system architecture and are deeply rooted in the reasoning of engineers.  And yet this has nothing to do with the problem they are trying to solve.

In addition, they’re having an extreme separation at the database level which mostly ends up in virtualizing data centric functions on top and (consequentially) inhibiting real optimization and scale. Oddly, they are making this an argument – “It runs on any database.” Good marketing… and just so old school.   Why should anyone care in a cloud solution? And how will they ever provide you the best possible performance?

SAP Cloud for Planning – The Differences are Key

So what did we do differently for SAP Cloud for Planning that allowed us to build this beautifully designed application?

For SAP Cloud for Planning, we removed all “cuts”. From the graphical designers to the SAP HANA engineers, we were an intermixed cross functional team that sat side-by-side in one big space that we called our “Engineering War Room.” This enabled us to streamline the whole application without any artificial boundaries. Unlike first generation cloud vendors, we didn’t abstract away from the database. In fact, we optimized for SAP HANA to the fullest and decided to stay “native” wherever possible. All planning operators were developed directly as a first level engine in SAP HANA and as an extension of the general calculation engine. This not only gave us maximum performance but also unlocked the direct usage of all other data engines such as analytics, predictive, search ….you name it.

We embraced design thinking when we developed SAP Cloud for Planning. A methodology to enable us to be conscious about the people using the application, their environment, and ultimately their work. We just visited a large company in China and researched how they work, sat in on their daily work, and talked to them. We created prototypes, validated them and re-iterated. Over and over. Everyone is involved in this: every developer, designer, solution expert and manager to establish one common understanding about how we create the biggest value for our users. We have quite a unique setting – one team that brings in core database developers of SAP HANA (which is one of the most disruptive innovations in data management), application experts, user experience and graphical designers. This is one awesome, creative cocktail. It’s wild and challenging but ultimately yields results that are beyond reach for each single group.

We go native and remove all boundaries throughout the entire software stack to create the most streamlined application that brings true value to our users. And yes, it will have kick-ass performance.

Originally published on SAP Analytics, 27 October 2014. Reprinted with permission.

Technology Imperative for Financial Planning and Analysis – Part 2

by Malcolm Faulkner, Senior Director, EPM, SAP

In part one of this series of blogs I made the argument that most companies are way behind the “technology wave” and struggling with persistent, fundamental issues that are hard to fix. In this blog I’ll argue that there are two additional factors at work, namely:

  1. IT has a full plate which can actually hinder progress and adoption of new solutions.
  2. Business needs to be a co-pilot in driving the introduction of technology.

These need to be addressed in order to make the transition to a top performer.

Let’s begin with IT.

Co-workers working in computer room

IT Has Issues

IT came into existence as a support function – building and maintaining software applications to make business functions more efficient and effective. Starting with automating transaction-based processes, we’ve evolved to where we are today, with much of the back office transactional systems largely automated (although perhaps in need of an upgrade), with the focus being on increasingly sophisticated analytics, visual tools and mobile solutions. Technology has evolved to the point that it’s driving innovation and changing business models. In kind, the role of IT is evolving to support these new opportunities.

The result is that IT is split between operational “keeping the lights on” activities and an increasing opportunity to support business functions by promoting new and innovative uses of technology.

New technology is fun, and development is fun too. The more new technology and new development IT gets to do the happier they are. They would be happy as can be rolling out new stuff all the time especially if they could outsource all the associated support and maintenance work.

Unfortunately, these “keep the lights on” activities comprise 50-80% of IT’s time (depending on what study you read). This limits the time and resources IT can allocate to new projects. Hence, needed investments may not happen-not because the business doesn’t want to spend the money, but because IT can’t get to them because of other work further up the queue.

When the cost of supporting and enhancing an existing solution exceeds any additional value that can be derived from it a decision must be made to either make do with the limitations or to replace it with something better and more cost effective.

The good news is, when it comes to introducing new technology, if we miss one cycle we can leapfrog to the next. So legacy apps can be replaced with cloud apps and technology laggards can jump straight in with the latest technology.

It used to be the case when IT was used primarily to enable internal processes that the CFO would approve spending based on an assessment of the return on investment. This largely hands off approach has changed as CFOs have begun to expand their horizons and look to be more involved in strategy, growth, and innovation. While, correspondingly, technology is now an integral component in business innovation.

Business Needs to Step Up

Increasingly, business is stepping up and working hand in hand with IT on technology projects. Becoming a top performer means implementing best practices to drive process improvements.   Most of the time adopting a best practice requires implementing some form of software. Finance can’t rely on IT to drive that agenda, because as explained above, IT has a full plate and there’s competition with the limited resources needed to implement new systems.

Furthermore, where IT has limited appre­ciation for the financial and operational consequences of its spending, it can leading to investing in technology for technology’s sake. In this case, it is even more important for finance to vet proposed expenditures.

Vendors have also recognized the need to alleviate IT’s workload and have introduced more “self-service” solutions that are intended to be owned by business. This mitigates the need for business to rely so heavily on IT for information. This is also better than finance going off and creating solutions in parallel with IT.

As the CFO research study* stated, forward-thinking organizations are “adopting technologies such as:

  • Cloud computing, which provides rapid and flexible access to solutions that drive efficiency and adaptability while lowering IT costs
  • In-memory computing, which gives finance and the wider business near-instant insight into their burgeoning amounts of big data
  • Mobile technologies, which provide targeted information and analysis and engage colleagues in a two-way collaboration across a widely distributed enterprise
  • Predictive analytics and risk management, which help identify likely scenarios and access how they might impact financial performance”

There’s a huge opportunity now, regardless of the state of IT automation in your company, to make some real improvements. New technologies have not only dramatically changed what is possible but lowered the cost of doing so. The focus is shifting from trying to push down costs to finding ways to push revenues up. This means addressing some of the messier financial planning and analysis functions so they simultaneously become more effective and efficient (or just simpler) and then allow finance to go further and apply technology towards innovating business process so they can get information into the hands of managers and executives faster – leading to more revenue (value).

For business leaders that have taken a hands-off approach, it’s time to change or risk falling further behind.

Fixing the fundamentals remains paramount, but by implementing these new technologies you have the chance to leapfrog the competition.

In the next blog in this series I’ll look at the issues and challenges finance organizations face in improving financial planning and analysis processes and how to kick off performance improvement programs.

* Shaping the Finance Function of Tomorrow: 2013 CFO Research survey among senior finance executives at large companies to explore the key challenges that finance departments will face in the years ahead.

Originally posted on SAP Analytics, 9 October 2014. Reprinted with permission.

See The Beauty in Your Plans

by Ivo Bauermann, Global Vice President and General Manager, EPM Solutions, SAP

Cloud1

The famous industrial designer Dieter Rams knew good design, dating back to the 1960s when he had major success at Braun. Even today, Apple’s products are heavily influenced by Mr. Rams’ designs (see this comparison). One of his key principles is that designers should eliminate the unnecessary, that good design emphasizes usefulness and disregards anything that detracts from it.

Well, current business planning applications are not exactly adhering to this principle. They’re complex for end-users, focus on technical features, and distract with cluttered interfaces.

This will change. Last week, Gerrit Kazmaier (Vice President, SAP EPM Development) and I announced SAP Cloud for Planning – a brand new SaaS solution for finance and business professionals to plan simpler. It will have things you’ve never seen before in a planning application; but when you do, you won’t believe how you could have done without them.

With SAP Cloud for Planning, we decided to do things differently:

  1. Unlike 1st generation EPM cloud, we’re not taking age-old planning concepts, putting them in the cloud, and calling it a solution. Cloud is an opportunity to re-design planning for the way that people actually work. Why not create a planning application that’s as easy to use as your consumer applications? Are we serious about this? You bet – we have a dedicated design team of graphic and product designers with backgrounds from famous design agencies. No one else has this.
  2. We created a start-up mentality in a big company — a start-up on steroids. This allowed us to innovate fast, break things, and then improve them for the end-user. We’re laser focused on creating the best planning application, period. And with all the latest and greatest technologies and resources that only a big company like SAP can provide. We innovate like a start-up and compete like a start-up but without the drawbacks of immature technology.

Good design is not about removing complex technology that makes a product useful, it’s about hiding it from the end user. Look, for example, at Beats’ music service app on the iPhone. Beats has complex algorithms to search through millions of songs based on your preferences, but it’s still extremely simple to use. Beats designed its app for you to press ‘play’ as fast as possible, since listening to music is the core product.

Similarly, SAP wants you to plan as fast and as easily as possible. While still giving you the ability to perform complex calculations over large volumes of data.

SAPCloudPlanning

That’s why even in the cloud, an industry standard platform like SAP HANA is extremely relevant. Don’t let anyone tell you otherwise. That’s like saying the engine of a car doesn’t matter as long as the steering wheel feels nice. For simple planning to be useful you need high performance and scalability, you need a platform that integrates with other applications better than anyone else.

And even though SAP Cloud for Planning is brand new, you are in safe hands. We know business applications, we are experts in planning, leaders in analytics. It will have the best integration with your other SAP applications like SAP Business Planning and Consolidation, SAP Business Warehouse, and SAP Business Suite. We channel 40+ years of experience into this innovation. Maybe we should call it version 40.1 rather than version 1.

Here’s what I predict will happen:

  • You will love the way this application looks
  • You will like how this application fits your job
  • You will want to work with this

We combine great design with high quality engineering to create a useful planning application that disregards any distractions.

Dieter Rams might approve.

Next blog you will hear from Gerrit Kazmaier. @Gerrit, please tell us why design isn’t just for designers, but also engineers for whom “Code is law.”

Originally posted on SAP Analytics blog, reprinted with permission.

Planning and Budgeting: Is Your Finance Operation Asleep at the Wheel?

Coffee-break with GameChangers

Newsflash: The Big Data revolution has already happened. Your CFO is done relying on gut feelings or antiquated Excel spreadsheets for planning and budgeting. Bring these to his or her office, and you’ll be dismissed as a data dinosaur.

Sometimes the leaders who’ve earned their post are the last and least likely to want to adopt new ways of thinking or, by extension, new technology. During a recent SAP Game-Changers radiocast, panelists Steve Player, program director of the North American region of Beyond Budgeting; Paul Davis, service line director for enterprise performance management (EPM) solutions at NTT Data America; and Pras Chatterjee, an SAP director of product marketing EPM, liken the finance operation to a ship navigating the high seas. The captain wants to forge ahead, but many of the deckhands are staring off the back of the ship instead of helping chart the course forward.

Don’t miss the boat on budgeting

According to Player, “We are spending most of our time looking at the past reporting, or we are yelling over our shoulder. It does not matter how much technology you have. If you are looking backward, you just cannot add a lot of value to the business.”

Davis offers up a possible reason for such resistance. “From a business analyst or a financial analyst perspective, they’re terrified that it means more work for them.”

He continues that Player is diligently working to evangelize the pioneering mindset, touting new planning and budgeting technology as more of an opportunity to shine than a risk fraught with peril. Player is confident that significant gains exist to be won – hidden value, new customers, and more profitable customers. Some (if not many) of the current C-level execs have grown up with the old Excel sheet system, and they need to clearly understand that there is a more proactive way to use innovative tools and technology for planning and budgeting.

Find the people and tools that can make an impact

The newest predictive forecasting tools can help you scientifically identify correlations and trends to define key business drivers. In a sea of data, you need to understand your customers and their behaviors through concrete evidence that correlates to sales. Big Data experiments are becoming less expensive, but they still take active, focused effort.

Chatterjee believes that adoption and acceptance of new technology really comes down to a savvy CFO. “The CFO is one that has to be the leader in the organization and really provide the tools and ammunition to all his subordinates. In order to develop this team, there is a lot of collaboration that needs to happen. We need to start looking at people who have a much rounder skillset – people that understand the accounting but also general business concepts.”

Davis, however, has a different take. He thinks that folks we have now just need to be unshackled from what he calls “dumb stuff,” such as data gathering, mining, and cleaning. Instead, we need to sell them on an entire vision for the future that empowers and excites them.

He envisions three main ways that organizations will employ predictive analytics:

  1. Move into niche markets and focus on their best products and most profitable customers.
  2. Rely on predictive analytics to improve operational metrics – maximizing spend and boosting the bottom line.
  3. Integrate top- and bottom-line processes, where procurement and contract organization meet, for optimum efficiency and win-win scenarios for both customers and sellers.

To explore even more ways that predictive analytics can impact your planning and budgeting processes, listen to the full radiocast.

SAP Announces New Cloud Planning App that Crushes Complexity

Originally posted on SAP Analytics. Reprinted with permission.

By David Williams, Senior Director, SAP

Today at the second annual SAP Conference for EPM in Chicago, we made a big announcement. Hints were dropped along the way, competitors speculated, but the cat is now finally out of the bag. I´m very happy to announce SAP Cloud for Planning, a brand new, built-for-SaaS planning and analysis application (heavy emphasis on “and analysis”).

Clouds, Dusseldorf, North Rhine-Westphalia, Germany

Our mission was simple; build a modern planning app in the cloud with the look and feel of a consumer app and bring collaboration and analytics where they belong – within the context of your planning process. Usability was a key design principle of the solution from the start – not an afterthought – and to make this happen, an entire design team was brought into the development process from day one to focus on user ergonomics.

The app is centered around the user, financial planning and analysis, and other business planners/analysts, so there’s a natural flow between analyzing, planning, collaborating, and consuming information through the Web and on mobile device. This is in contrast to a technology-first approach that determines how one does business modeling or drills into detailed information.

SAP Cloud for Planning introduces a new generation of enterprise performance management (EPM) in the cloud.  Just watch the SAP Cloud for Planning video, and you´ll immediately see we didn´t just try to recreate what was already out there and put it in the cloud. This is different.

But, it´s not just another pretty face. Any customer, whether they run SAP or not, can get up and running quickly with a future-oriented planning and analysis app that performs how and when you expect – no matter how many users or the level of detail. And SAP customers who are already running our widely deployed SAP Business Planning and Consolidation application, and are looking to complement it with a public cloud planning app in a business unit(s), can leverage bi-directional integration between the two solutions for a hybrid approach.

Stay tuned for our next blog which will go behind the scenes of SAP Cloud for Planning with solution owner Ivo Bauermann.

 

 

The CFO’s Expanding Role – Reality or Delusion?

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

Did my last blog on the topic of the annual budget resonate with anyone? I have a suspicion that it probably did. Here in my final blog for a few weeks I am going to turn my attention to the CFO.

Am I alone in wondering if the many references and articles concerning the CFO’s emerging role as a “trusted advisor” is more hype than reality? Increasingly, I read articles and research studies alleging this emerging CFO role to be actually happening. In an article written by Gianni Giacomelli, senior vice-president at Genpact, titled “Can a CFO Innovate?” he states:

“Modern financial executives are moving toward a more central and expanded role as stewards of the company’s longevity, using the finance function to enable growth, especially in new markets and in response to market changes. For those who are ready for change, the new finance is an exciting and rewarding way to help shape a more intelligent enterprise that is better connected to the market and its customers.”

Really? Just to devil’s advocate for a moment, what proof do we have that Gianni’s observation is true? When we cut to the chase, what are CFOs more concerned about – regulatory compliance or organizational performance improvement? Certainly many CFOs monitor and report on performance using scorecards and dashboards. But do they actively participate in assisting line managers to move those dials. For example, do they:

  • Assist sales and marketing managers with identifying which types of customers to retain, grow, win back, and acquire?
  • Assist operations managers to determine which productivity actions and projects will realize gains in efficiency, effectiveness, quality, and cost reduction?

Or do they simply serve as gatekeepers and keep score?

Bean counter or bean grower?

In an article by Myles Corson, a consultant with the Financial Accounting Advisory Services of Ernst & Young LLP, titled “The Evolving Role of Today’s CFO”, he writes:

“In addition to overseeing the company’s financial health, CFOs are increasingly involved in setting operational and commercial strategy, navigating their companies safely through tighter credit markets, more complex regulation and unstable trading conditions. … As organizations continue to adjust to market volatility and economic uncertainty, CFOs must increasingly provide expert advice to support boardroom decisions. In fact, many CFOs feel that they are in an exceptional position to offer this level of strategic counsel because of their ability to gather information from disparate parts of the company.”

But is this evolving role one of just better reporting or one creating a greater impact on analysis and decisions?

In a survey conducted by my fellow Big Fat Blogger Mary Driscoll of the America Productivity and Quality Center, titled, “A New CFO Priority,” she writes:

“Surprisingly, only five percent of survey respondents believe that finance is currently delivering game-changing value to their enterprises. Is this cause for concern? … Finance organizations that are seen as a partner to the business generate thoughtful, clear, and authoritative analyses. However, the biggest barrier preventing business partnership is the lack of time to perform this same work.”

My intent is not to be a naysayer and deny there is truly an evolving and expanding role of the CFO. In fact, my intent is just the opposite. I am a believer that, particularly given the opportunity provided by the nexus of technological forces ( advanced analytics, cloud, in-memory computing, mobile and social computing) the CFO’s finance and accounting function is uniquely positioned at this moment in time to accelerate the adoption rate of enterprise performance management (EPM) methods along with emerging business analytics to gain crucial insights that were previously inaccessible and truly facilitate business innovation in new and novel ways. Finance and accounting professionals were born with a quantitative aptitude – which technology will only further fuel.

Boeing 747 Jetliner Taking Off, Sunset Silhouette

Delusion or reality?

But do we know or just think we know? Which is it – delusion or reality? I along with my colleagues, for example, bemoan the slow progress in performance improvement methods such as the adoption of activity-based costing (ABC) principles. If ABC is done at all it is typically only taken as far as product and service-line gross profit margin line reporting and does not look beneath that line to report and analyze channel and costs-to-serve for arguably more critical customer profitability reporting and analysis. And what about marginal / incremental expense analysis for that matter? This involves classifying available / used resources as sunk, fixed, step-fixed, semi-variable, or variable. This involves an understanding managerial economics, not just managerial accounting. How many finance organizations have built core competencies in these functions?   My suspicion is that many finance organizations are for the most part dealing with more fundamental problems and have yet to build core competencies in many of the practices espoused by analysts, consultants and business pundits.

For now though, my opinion is the CFO function is about to enter a golden age of business analytics and managerial accounting. But we need more evidence. Are CFOs taxiing on the runway, or have they begun lift-off?

I hope that you have enjoyed reading my series of blogs over the last few weeks. I’m taking a break now as I prepare to head to Chicago for the SAP Conference for EPM on 13/14 October, where I’ll be talking more about the subject of performance management and analytics and looking at best practice approaches, as well as taking a look to what we might expect to see in the future. If you’re in Chicago why not pop along and take in the show – but if not then please watch out for my next article as I shall look forward to resuming my blog series soon. Thanks for reading!

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Hear Gary share some of his thoughts concerning EPM innovations and best practices at the SAP Conference for EPM in Chicago, October 13/14, 2014

The best part of the annual budget is when it is over!

By Gary Cokins, Founder of Analytics-Based Performance Management LLC

Jeremy Hope (1948 – 2011) was a special type of management consultant and colleague who I highly respected. He started a revolutionary movement when he co-authored with Robin Fraser the book, Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap (Boston: Harvard Business School Publishing, 2003). Their basic message was that the annual budgeting process is so broken and dysfunctional that the best solution is not to reform it but rather to abandon the process altogether.

Their solution was to understand the underlying purposes of a budget and apply methods, like driver-based rolling financial forecasts, to fulfill the purposes of the budget.

The best part of the annual budget is when it is over!

During a breakout session at a finance and accounting conference that I attended last year, a CFO remarked that the best part of the annual budget is when it is over! The laughter was thunderous. Sadly there is truth in the humor. Many are questioning if the value of budgeting is worth the effort. An annual budget process can take six months or more to develop and finalize (following multiple executive tweaks and revisions), and it can be obsolete almost from the moment it is finished.

Jeremy Hope and Robin Fraser suggested a better way. They co-founded with Peter Bunce an organization called the Beyond Budgeting Round Table (www.BBRT.org ). These BBRT founders explain that the annual budget is a fiscal exercise done by accountants that is disconnected from the executive team’s strategy and is usually insensitive to forecasted volume, product and customer mix. Typically the budget simply increments or decrement’s each department’s line-item expense (e.g., 3% for inflation) without considering the interdependencies of cross-departmental process flows.

The BBRT solution acknowledges that budgeting line-item expense limits are more like shackling handcuffs on managers who may need to justifiably spend more than was planned and approved many months ago in the past in order to capture benefits from newly emerged opportunities. BBRT replaces budget controls by giving managers the freedom to make their own decisions regarding the use of resources. BBRT does invoke controls, but it does so by monitoring non-financial key performance indicators (KPIs) against targets. As a result managers do not avoid being held accountable.

Nor does BBRT leave the accountants empty-handed. Treasury cash flow management, periodic interval-based rolling financial forecasts, and probabilistic what-if marginal/incremental expense scenarios (e.g., make versus buy decisions) are modeled using activity-based costing methods that calibrate cost consumption rates with substantial accuracy.

Risks from being blunt and radical

Jeremy Hope was radical in his thinking. To accounting and finance traditionalists, the thought of operating without an annual budget may be beyond their comprehension.

Perhaps, they could reflect that the electric light bulb replaced oil lamps that replaced wax candles for producing light – while reading Hope’s book in a candle lit room.

I admire radical thinkers like Jeremy. He will be missed. So many organizations are wed to tradition and insulated from change. It is a bit like keeping employees in an echo chamber to ensure they reinforce the same rigid ways of running the business. Jeremy’s observation was that the closer one is to a customer, the faster things speed up and the more dynamic they become. Therefore a static budget is like a fixed contract with managers accountable for meeting or exceeding the planned fiscal year-end results. Locking up resources in an annual plan is too long a horizon. It severely limits an organizations need for agility and flexibility in the face of continuously changing conditions for which constant adjustment and fine-tuning are needed.

Management movements for progressive methodologies need more activists like Jeremy Hope.

In my next blog, to be published just a few days before I am due to speak at the SAP Conference for EPM in Chicago, October 13-14, I’m going to turn my attention to consider the expanding role of the CFO, and ask if this is in fact a reality, or whether it is just hype.

 

About the Author: Gary Cokins, CPIM

Gary_Cokins

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.

gcokins@garycokins.com; phone +919 720 2718

http://www.garycokins.com

Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.

Hear Gary share some of his thoughts concerning EPM innovations and best practices at the SAP Conference for EPM in Chicago, October 13/14, 2014