The Top 3 Trends in Business Planning

by Gary Cokins 

In my prior blog, I described the three categories that are foundational for effective business planning: destination/purpose, information access, and integration. What are the trends with these three categories?


Business plans are derived from a vision and mission

The primary responsibility of the C-suite executives is to establish strategic direction by answering the question, “Where do we want to go?” Their answer will depend on the vision and mission of the organization. An organization’s mission statement does not always need to be the oftentimes hollow words displayed on the wall of the company’s entry lobby (e.g., “We will be the best …. “). It can be simpler. For example in the 1980s when Bill Gates said “A computer on every desk” Microsoft employees understood his vision and their mission.

The trend in this first category involves answering a second follow-up question, “How will we get there … to where the executive want to go?” The digital vehicle to achieve and execute the C-suite’s strategy is the integration of the various components of the integrated business planning (IBP) framework. These include strategy maps; product, channel, and customer profitability reporting and analysis; driver-based rolling financial forecasts; enterprise risk management (ERM); and lean and quality management techniques for process improvement. Each component should have analytics imbedded in them.

Access to information

Many organizations are drowning in raw transactional data but starving for information. The trend in this category involves converting data into information. This is typically accomplished via modeling.

For example, a one page strategy map is a model of the executive team’s strategy. The process of costing to calculate individual customer profit and loss (P&L) statements is accomplished by modeling how resource expenses (e.g., salaries, supplies) are causally and proportionately consumed as calculated costs of outputs.

Associated with this trend is the emergence of business analytics. What analysts want are two capabilities: (1) easy and flexible access to data; and (2) the ability to manipulate it. The IBP framework enables this via the trend I describe below.

The integration of the IBP framework’s component methods

The more seamless the integration of the IBP framework’s components, the better will be an organization’s performance. The trends in this category involve cloud-based planning, real-time information flows, and analytics.

  • Cloud-based computing – the attractiveness of remote computing power and storage over on-premises computing, maintenance benefits and the ability to easily extend use to enterprise users is commonly accepted today.
  • Information flows – transactional data and its conversion into information today can flow bi-directionally between business operation systems (production, logistics, and customer demand) and financial systems (profit reporting, budgeting, rolling financial forecasts). And the flows can be in real-time (or near real-time) refreshed at short term time intervals.
  • Analytics – The more savvy companies now embrace analytics as a competitive advantage. The goal of analytics should be to gain insights and foresight and solve problems, to make better and quicker decisions with more accurate and fact-based data, and to take actions.

Future trends in business planning?

In a future blog I will answer this question of future trends in business planning. But for now consider that if you can imagine a digital capability, then it will eventually (and soon) be realized.

Join me at the SAP Conference for Financial Planning, Consolidation and Controls in Las Vegas 10-11 November, where I’ll be delivering a presentation on performance and risk management. I hope to see you there!  

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About the Author: Gary Cokins, CPIM


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 .  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, Methods, Risk, and Analytics and Predictive Business Analytics.

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5 Top Tips for Vegas

By Chris Grundy, Director Product Marketing, SAP

As you know from my earlier blog, for many months now I and my colleagues here at SAP, along with a team from conference organizers TA Cook, have been preparing for our next event, the SAP Conference for Financial Planning, Consolidation and Controls. This is the new name for what was previously known as the SAP Conference for enterprise performance management (EPM), because this year we’ve expanded our content to not just focus on EPM, but also upon GRC (governance, risk and compliance). So, with just seven weeks to go until the event starts on 10 November in Las Vegas, I thought it was about high time I wrote a little something about what attendees might look forward to seeing and hearing this year, especially given the fact that we’re going to be joined by a number of industry analysts and thought leaders, along with many SAP customers ready to tell us about their experiences in implementing and using software solutions.

Illuminated Light Bulbs

So here are my tips for 5 top tips for sessions and speakers to see (and hear) at the conference in Las Vegas this November:

  1. Keynote panel day 1. Not one, not two, but three special guests join for what should be a hugely informative informative panel discussion during the day 1 keynote. Guests include Doug Henschen of Constellation Research, Scott Mitchell of OCEG and Brian Kalish of AFP Online. I’m really looking forward to hearing the opinions of this panel of industry experts and thought leaders on the topic of what’s driving Finance and the role of the CFO.
  2. Ray Wang day 2 keynote. I almost need say no more, as Ray is such a well-known observer, researcher and thought leader in the technology arena, being Principal Analyst & Founder of Constellation Research. Ray’s keynote “The secret to the future of planning” is sure to be topical, insightful and one might even hope he’ll throw in a few surprises to really get us thinking. A great reason to get back to the conference center and grab a good seat for this early session on day 2!
  3. Gary Cokins day 1 presentation. I had the pleasure of meeting Gary last year at the EPM Conference in Chicago, when he presented one of the keynotes, and since that time we’ve worked together on a number of projects, mostly related to blogging. An experienced practitioner, consultant, author speaker and prolific blogger, Gary has a vast experience in the area of performance management. I’m always impressed with Gary’s ability to express complex issues in interesting and thought-provoking ways, and the session at this year’s conference towards the end of day 1, where he will examine performance and risk should really get the brain-cells working again. And to top it off, straight after Gary’s session we have a networking reception where Gary along with other conference speakers will be happy to chat with conference attendees in a more relaxing atmosphere.
  4. Bjarte Bogsnes of Statoil day 2…and many other customers too! It’s terrific to see Bjarte on the conference agenda this year, ready to tell the Statoil experience around performance and risk. He’s a great conference speaker, very articulate and engaging and sure to give a great presentation. But of course he’s not the only customer speaker at the conference, and I’m also eager to hear presentations from Sysco, ServiceNow, Maxim Integrated, Southern California Edison as well as SAP over the two days of conference.
  5. Workshops. For those of you who like to dive deep into your solution areas, three workshops topics are on offer at the event this year; FP&A, Integrated Planning and GRC. Led by solution and domain experts, these sessions are intended for attendees who want to absorb a more detailed understanding of solution strengths and capabilities – but be ready to get your thinking caps on as you’re likely to be challenged with practical examples to work through at some point!

And of course many SAP-led sessions and excellent networking opportunities throughout the event and into the evening of the first day of the conference.

I am truly looking forward to the event this year, and to the opportunity to meet and speak with the many people attending the conference. Of course I shall be reporting back to you from the event – so if I don’t see you there, you’ll be sure to hear from me afterwards!


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What Do Personal and Business Planning Have in Common?

By Gary Cokins 

Before we discuss business in this blog let’s start reflecting on our personal lives. I will get straight to the point – how good of a personal planner are you? Once I’ve covered that I’ll then examine parallels between personal and business planning.


Personal planning

There are many types of personal plans ranging from mundane plans to life-impacting serious ones. An example of a mundane plan is, “How should I spend the week-end?” Others are “What should I eat for dinner?” and “What location should be my next vacation?”

Life-impacting serious plans are obviously on a grander scale. “Which university should my child attend?”, and the related question of “How should we plan for that financially?”. And of concern to us all at some point in our lives, “What kind of retirement lifestyle will I be able to afford?”

Regardless of the scope or scale of personal plans, personal plans have this in common: pleasure-seeking preferences and the need for information.

Business planning

The parallels of personal and business planning in today’s high tech lives fall into these three interrelated categories:

  • Destination and purpose – What food for dinner? Where to vacation? In business the primary responsibility of an organization’s C-suite executives is establish strategic direction by answering the question, “Where do we want to go?” Their answer will depend on the mission and vision of the organization. A core planning tool for this is a strategy map with its companion balanced scorecard to report feedback of progress toward accomplishing the strategic plan.
  • Access to information – Do I have the ingredients in my food pantry and refrigerator to prepare my planned dinner? What is the tuition amount for the universities that my child is interested in attending? In business today one cannot be blind to the digital revolution created from the internet, big data, and cloud-based computing power. One must first “collect the dots to connect the dots.”
  • Integration – A vacation plan can involve planes, hotels, and rental cars. In business there are also many interrelated moving parts. The more seamless their integration, the better the organization’s performance. Forecasts that leverage business intelligence (BI) are a primary independent variable for planning operational and financial results. With integration there are many dependent variables (derived from the forecast) such as sales and profit projections. The CFO’s function is like a master architect. Line managers are like the subcontractors who use the strategic plan and forecast to: (1) manage the capacity of required resources; and (2) schedule processes. The CFO’s financial planning and analysis (FP&A) team evaluate the line managers’ plans to determine if the strategic plan is affordable by generating pro forma financial statements including cash flow projections.

Planning our week-ends and our business

We rely on weather reports to plan our personal week-ends. We rely on data and integrated business planning systems to improve the managing of our businesses. The better that automation supports the planning’s categories (purpose, information, and integration), then the better will be the enterprise performance.

Over the coming weeks I’ll be writing more on the topics of business planning, performance and risk management, taking a look at the market trends and technology innovations that are driving business behavior and the ways they are using software solutions that address these needs.

Join me at the SAP Conference for Financial Planning, Consolidation and Controls in Las Vegas 10-11 November, where I’ll be delivering a presentation on performance and risk management. I hope to see you there!

SAP Conference for Financial Planning, Consolidation and Controls_Twitter



About the Author: Gary Cokins, CPIM


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 .  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, Methods, Risk, and Analytics and Predictive Business Analytics.

Linkedin contact:

Be A High-Performing Finance Department, Part 2: Help Your Employees Succeed With Essential Capabilities

By Nick Castellina, Research Director, Aberdeen Group

In my last blog in this series, I illustrated the reasons that successful finance functions must transform as they become even more integral to overall business success. This week I’d like to show you how this transformation can actually be accomplished.

01 Feb 2013, Houston, Texas, USA --- Businesswoman holding tablet computer with pie chart --- Image by © Terry Vine/Blend Images/Corbis

I mentioned that in top-performing organizations, executives commit to financial transformation and push that down through the organization. It is their job to communicate these strategies and to provide the technologies and capabilities I have outlined below.

Financial transformation requires a strategy that will lead to changes to the business. But where to start? The number-one strategy of Best-in-Class (50%) is to conduct an internal investigation of financial processes and technologies. This is why organizations that commit to financial transformation are more likely to implement technologies that improve the organization’s ability to execute on its financial goals. This starts with an end-to-end business suite, but extends to individual functionality tailored to handle individual finance disciplines. For example, organizations that commit to financial transformation are 2.5 times as likely to have a financial controls solution. Note that a majority of organizations that commit to financial transformation have implemented business analytics. These tools enable users to interact more effectively with data and use it to make transformative decisions.

Table 1: Key Technologies


Unfortunately, simply having a solution that can help to record and share financial data while automating processes may not be enough in the current environment. My report “In-Memory and Social Business: Coming Soon to your Large Enterprise” found that leading large enterprises are already 27% more likely than followers to have in-memory analytics technology, with another 42% planning to implement this technology in the near future (Figure 1). In-memory analytics is a way for organizations to consume the increasing amount of data that they are exposed to. Querying large data sets can be handled in random access memory (RAM), resulting in quicker access to reports and analysis. This is important to large organizations with millions of transactions and interactions as they attempt to analyze data and processes in real time to react to trends and monitor compliance. It is also important for individual business functions as they attempt to transform their operations to become more effective.

Figure 1: Consider In-Memory


For organizations that are focused on financial transformation, in-memory analytics can provide some interesting benefits. There are process improvements to be gained as well as a better ability to provide information for decision-making. These benefits could include:

  • Centralized financial data for ease of access
  • Improved compliance monitoring on a real-time basis across a larger enterprise
  • More dynamic, agile, and accurate plans and budgets
  • A better ability to take advantage of available cash
  • Quicker financial close
  • Ability to connect financial and operational data for more valuable insights

This environment is perfect for introducing transformation across an organization. In fact, my research has proven that organizations that commit to financial transformation are more likely to have implemented a variety of capabilities. As shown in the chart below (Figure 2), the most essential capabilities fall into a few main categories.

Figure 2: Transformative Capabilities


  • Real-time data repositories. In order for organizations to report effectively, remain compliant, and support the line of business it is important to provide an easily accessed, sharable, and accurate picture of financial information. Organizations that commit to financial transformation are 3.2 times as likely to have real-time updates to financial metrics. Further, 72% of those organizations store this information in a centralized repository.
  • Collaboration. Finance is morphing into an essential source for organizational decision-making. Additionally, transformative organizations understand that communicating with the extended enterprise (including regulatory bodies) is essential for business success. Transformative organizations enable collaboration both inside and outside of the organization with finance.
  • Streamlined processes. In a modern environment, finance must be a well-oiled machine. Aberdeen’s research finds that transformative organizations have tools in place that ensure compliance, automate financial processes such as tax calculations, introduce emerging technology such as mobile, and enable the individual functions within finance to succeed.
  • Support for change. Innovation and change are, of course, core components of transformation. Organizations that commit to financial transformation are 2.2 times as likely to have business solutions that can be easily tailored to reflect business change.

By  implementing these capabilities and technologies, top-performing finance executives provide a platform for their finance department. If your organization implements them, you will be amazed by the improvements you will see in a variety of essential metrics. In fact, my research has uncovered quantifiable benefits as a result of a financial transformation strategy (click here to see an infographic highlighting this research). To learn what I found, check back soon for a blog where I will reveal those benefits and give you some final tips to achieve them.

high-performing finance


What Top Execs Are Saying about Managing Risk in the Age of Complexity

by Babak Ghoreyshi, Global Marketing Program manager at SAP

Finance executives know that risk is inevitable, but there is a significant debate over how an organization can make the best business decisions to seize opportunities while avoiding the risk. Businesses need to be agile enough and proactively deal with external risks as well as potential risks as they develop. Market leaders consistently find a way to contain risk and comply with regulations while leading the organization in identifying more profitable ventures.

In the spring and summer of 2015, a survey of more than 1,000 finance executives with responsibility for governance, risk and compliance (GRC) was conducted by Loudhouse and sponsored by SAP. The resulting report on GRC best practices is titled “Managing risk in the age of complexity.”

This white paper revealed that a combination of increasing risk and regulation complexity comprises the number one largest pressure felt by GRC professionals around the world today. As that pressure grows, these executives have sought to establish reliable methodologies for strategically balancing risk and opportunity.

Key insights

Just 10 percent of the participants of the survey were satisfied with their GRC tools and technologies and were stating that they have adequate GRC tools, technologies, and processes in place. The same goes in terms of keeping pace with future growth. Only 10 percent are fully satisfied these tools, technologies and processes will keep pace with future growth. As a result, companies are leaving themselves open to risk. The report found that the biggest problems arising from GRC failures are loss of business or revenues, business disruption and damage to the company reputation. That means that the companies which are most vulnerable to risk are those where brand value is a central component of the company’s valuation. For all businesses, the core message is that risk has to be contained more quickly than ever before.


The GRC Landscape

Compliance and regulatory requirements have become more complex over the past five years for 81 percent of the respondents. Finance executives participating in the survey identified the top five risk centers as the primary sources that will be growing over the next two years:

  1. Competitive forces (42 percent)
  2. Control failures (41 percent)
  3. Financial and economic issues (36 percent)
  4. Employee performance (36 percent)
  5. Consumer behavior (35 percent)

Another fascinating observation was the emerging split in what GRC experts see as their top concerns. Just over half (57 percent) are more concerned with external risks while 43 percent look into the internal risks as more crucial. Organizations in Europe and the U.S., tend to consider the main risks as external, while South African and Japanese companies expressed a greater concern for internal risks.


GRC Pain points

The main pain points associated with GRC have to do with a fragmented vs. a more unified approach, which leads to a lack of visibility if there is no integration of risk and control, reporting, accessing and using necessary data. Access to a single source of truth can enable enterprises to reach the goal of turning data into knowledge in planning at the highest levels.

Although issues related to GRC are more closely now across all departments, only 10 percent say that GRC practices are embedded throughout the business. The US leads the world in siloed systems for approaching GRC problems, with three out of four companies pursuing a fragmented approach. Japan is close behind at 73 percent of companies and UK is in third place with 72 percent. More intelligent unified platforms are widely accepted in Brazil at 43 of companies and Germany close behind with 42 percent with centralized approach to GRC.

The most surprising statistic of all is that two out of three companies worldwide (65 percent) are not even able to quantify or qualify their current risk exposures. That is a perilous place to operate and the majority of companies are simply unprepared for current risks, let alone what’s coming next.

Moving Forward with GRC

GRC needs to evolve now and add more value to the business. That statement found agreement among three out of four companies in the survey. The way to do that is to standardize processes, reduce costs and bring greater strategic value to the bottom line. Here are the top priorities, fairly evenly split, that companies identified as areas GRC must address over the next twelve months:

  • For 42 percent it’s “improving consistency”
  • For 41 percent it’s “earlier identification and management of risks
  • For 39 percent it’s “improving GRC efficiency”
  • For 37 percent it’s “improving GRC performance and strategic value”


A 5 Point Plan for GRC Practices

Here are the best practices that have emerged as a result of the survey:

Point 1. Make a case for the strategic value of GRC. – Don’t wait for CEOs to see the strategic value of GRC.

Point 2. Make a decision about who’s responsible. – Award ownership of the process and make someone accountable.

Point 3. Seek a holistic, future-proof solution. – Create a scalable architecture for addressing GRC in the future.

Point 4. Drive cultural change. — The entire organization must respect the importance of GRC in commercial success.

Point 5. Do it now – The consequences of delay are too serious to ignore.

Get the Report

The most advanced GRC tools today can deliver confidence, drive better performance and expand accountability within your organization. Download “Managing risk in the age of complexity,” for a detailed analysis of all these issues and assure that your organization is deploying the best practices in managing GRC for the future.


Managing Risk in a Tsunami of Complexity

The uncertain financial times of the past few years have had a major effect on companies operate these days. Companies that used to operate effortlessly with the help of forecasts and projections now resist making business decisions that are set in stone and as a result companies have a new focus: to manage risk.

Managing risk is as important and difficult as it has always been. New Global research commissioned by SAP reveals that today’s complex business environment severely challenges companies.


The survey of 1000+ executives with responsibility for governance, risk and compliance (GRC) in their organizations found increasing risk and regulation complexity is now the biggest pressure on organizations’ GRC functions.

There is no real business opportunity without risk. Yet according to the research, companies are dropping the ball.  In simple terms, the way to balance risk and opportunity is to look at both as two sides of the same coin. Obviously one is looking for the opportunity side to be bigger than the risk side. Great entrepreneurs have learned how to realistically assess and manage both sides of the coin in the following business opportunity and risk categories.

SAP’s research findings reveal that one in ten organizations are fully satisfied that they have adequate GRC tools, technologies and processes in place. Similarly, only one in ten are fully satisfied these tools, technologies and processes will keep pace with future growth. As a result, companies are ill prepared and may get nailed for lax controls.

While the research reveals different levels of preparedness among companies, the message from GRC professionals is clear: companies are not managing risk properly and should prepare for black swans, meaning an incident that occurs randomly and unexpectedly, and has a major effect on operations.  Black swans may be game-changing, but they are not all that rare and businesses can mitigate against them with GRC tools, technologies and processes. The consequences of delay are serious.

GRC specialists face serious internal pressures to cut costs and prove effectiveness. Within, GRC professionals have to stay on top of changing business environments that introduce a range of operational risks such as employees, third party relationships, mergers & acquisitions, processes, strategy, and technology.


At the same time, GRC technology and processes can only work if it is respected within the company. It should become a key part of business processes and thinking, helping the firm achieve its business goals.

Regulatory environments in all industries are a constant shifting sea of requirements at local, regional, and international levels. The turbulence of thousands of changing laws, regulations, enforcement actions, administrative decisions, rule making and more has organizations struggling to stay afloat.  81% of GRC professionals surveyed say risk and regulation has become more complex in the last five years and without the right GRC tools and mythologies, businesses will be inadequately protected from risk. Read the full report here.


3rd Party Risks? Treat Them Like Your Own, Because That’s What They Are!

By Thomas Frenehard

In today’s economy, all companies operate in an increasingly complex network of actors that represent both a threat and an opportunity. As a result, 3rd-party risk management is broader than pure supplier risk management. Yes, supplier risk is crucial as a disruption in your supply chain will in turn lead to a global disruption in your business. But 3rd-party risk is much more than your suppliers – it’s your investors, distributors, counsels, advertisers… and of course, your customers!


The traditional approach, consisting of performing due diligence, is no longer sufficient, to my mind. Not only does it only cater to the present moment and not any future evolutions, but most of all your degree of control is very different from one party to another.

Take your suppliers. Relying on them often helps you be more agile as it can be a quicker and sometimes more affordable way to increase delivery capability or reduce direct costs. For this type of 3rd party you can have some type of control and you can define indicators to ensure all goes well: service level agreements, quality controls, etc.

Now, let’s take your customers, the ultimate 3rd party. If they disappear, so does your business. Again, you have some degree of control: payment terms for example, and you can also access publicly available financial information if you’re concerned about their health.

Businessman Looking at Computer Monitor

Outsource responsibility, but not accountability

In both cases, the conclusion is identical. If they’re part of your strategy and help you achieve your objectives, then they need to be taken into account in your overall enterprise risk management strategy and as such, included in your risk profile and reported to the board.

Leaving these risks to your procurement department is not sufficient.

Indeed, your company will ultimately be fully accountable for actions carried out by 3rd parties on your behalf. This includes manufacturing of goods or delivery of services but also goes beyond to compliance and reputational risks as well.

Should one of your agents carry out an illegal activity on your behalf, you might be facing prosecution. Even if this is not the case, if the name of your company or product is associated to irregularities, your brand and image will be affected.

Adopt a risk-based approach for continuity of operations

Treat these 3rd parties like your own departments. By including 3rd parties in your risk and control process, you will increase your oversight and reactivity.

To start, I suggest focusing on the most “risky” 3rd parties. To identify them, as for any critical asset or process, start by performing a risk analysis. What would be the impact on your business of a 3rd-party misbehaviour?

For those 3rd parties that could seriously threaten the continuity of your operations, include them in your business continuity plan. This also means having the right dedicated contacts within these companies – an account manager might not be the right stakeholder during a crisis.

Also, when possible, carry out preventative actions, such as source backup suppliers, diversify your customer base, etc.

Personally, I don’t believe managing 3rd party risks should be a very different approach to managing other strategic risks. Yes, there is an additional complexity in how to mitigate them, but for their identification and assessment, I believe they should be treated as your other value-added activities.

Would you agree with this candid opinion?