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WEBINAR Translating Finance to Strategy. How FP&A Can Win Executive Friends, Influence Corporate Strategy, and Improve Shareholder Returns 40% By Doing What They Do Anyway. Agenda. The Strategy – Execution Gap Finance at the Nexus Common Challenges to FP&A Translating Finance to Strategy

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Webinar translating finance to strategy
WEBINARTranslating Finance to Strategy

How FP&A Can Win Executive Friends, Influence Corporate Strategy, and Improve Shareholder Returns 40% By Doing What They Do Anyway


Agenda
Agenda

  • The Strategy – Execution Gap

  • Finance at the Nexus

  • Common Challenges to FP&A

  • Translating Finance to Strategy

  • Calculating the ROI


Big thinking marginal results
Big thinking, marginal results

Source: McKinsey & Company study (2012)

Most companies allocate the same resources to the same business units year after year. That makes it difficult to realize strategic goals and undermines performance.



Execution isn t easy
Execution isn’t easy

Strategies are a lot easier to communicate than to execute


Agenda1
Agenda

  • The Strategy – Execution Gap

  • Finance at the Nexus

  • Common Challenges to FP&A

  • Translating Finance to Strategy

  • Calculating the ROI


Finance is expected to execute strategy
Finance is expected to execute strategy

Here’s the Corporate Strategy Context.

Thanks. Great context for the budget.

How do I translate this into budgets which maintain continuity and fit into corporate targets?


We look for ways to reduce the gap
We look for ways to reduce the gap

CFO’s Know Technology to Support Decision Making is Inadequate

  • …So we revert to what we know

Source: Gartner/FERF presentation at FEI Summit Leadership Conference, May 2013

Source: modified template from CPM Methods consulting engagement 2012


Agenda2
Agenda

  • The Strategy – Execution Gap

  • Finance at the Nexus

  • Common Challenges to FP&A

  • Translating Finance to Strategy

  • Calculating the ROI


Guidance is usually too limiting
Guidance is usually too limiting

All budget requests should be within 3%

Can you make me a slide that shows how this budget reflects our strategic goals?

Leadership

What’s the point?

Finance

Executive

Business Units ---- Functions ---- Regions



Data can be ambiguous
Data can be ambiguous

We’re not sure how to provide scores to correlate with corporate goals?

How confident are you in this assessment of our corporate goals?

Leadership

That’s okay, just do your best

Here is our consolidated outlook…

“4” means it

is not a “5”

“4” means higher than average correlation

“4” means strong correlation

Business Units ---- Functions ---- Regions



Circumvention is too easy
Circumvention is too easy

The gap makes it easier for strong business leaders to get supplemental budget, effectively widening the gap through end runs.

If I’m going to hit these revenue targets I need some margin relief and more budget

I can probably find this in the corporate pot somewhere



Improvements are incremental
“Improvements” are incremental

“Improved” Planning Tools, Business Intelligence Tools do not address the gap

Thanks. Even better context for the budget

Based on your improved analytics, here’s the new and improved corporate strategy presentation

Still not sure how I translate

this into budgets which

maintain continuity and fit into

corporate targets?



Agenda3
Agenda

  • The Strategy – Execution Gap

  • Finance at the Nexus

  • Common Challenges to FP&A

  • Translating Finance to Strategy

  • Calculating the ROI



Fpg is unique solution
FPG is unique solution

Funding Profiles

Feature Function

BI, CPM, ERP

Dashboard

/Scorecard

Modeling

Construct

Library

Preconstructed Queries

Strategy Visualized


Agenda4
Agenda

  • The Strategy – Execution Gap

  • Finance at the Nexus

  • Common Challenges to FP&A

  • Translating Finance to Strategy

  • Calculating the ROI


There is a material impact on the bottom line
There is a material impact on the bottom line

Companies that evaluate the performance of business units, acquire and divest assets, and adjust resource allocations based on each division’s relative market opportunities will be worth an average of 40 percent more after 15 years.

Using Funding Profiles helped us gain actionable insight into our strategic plan and helped us bridge our long-range plan with our operating budget.

Vice President of Finance and Investor Relations at Advent Software (NASD:ADVS)





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