Budgeting, planning and forecasting is a collaborative exercise, especially in a matrix’d management structure that requires a consensus approach. In broad terms, the more participants in the process, the more diverse the functional areas from which they are drawn and the closer the individuals are to the sharp end of the business, the more likely it is that forecast outcomes will be realistic and dependable. But for most organizations, the collaborative, high participation approach has remained surprisingly elusive. Up until now, the technology underpinning a more collaborative process has not been up to the job, but the tide is changing, says Gary Simon, FSN’s managing editor.
Collaboration has been at the forefront of planning professionals’ minds for more than a decade but its implications are more far-reaching than the number of concurrent users that need to be accommodated.
Integrated business planning in which different functional areas work together to provide a single and consistent view of the business requires different strands of data to be brought together as well. This in turn drives up complexity, modelling dimensions, data volumes and, most likely, the size of the underlying business model(s). And this is the nub of the problem. Earlier generations of BPF software could not cope with massive (1 million cell) data models, so organisations ended up with fragmented applications architectures comprised of loosely coupled ‘cubes’ of information to cater for different dimensions, different levels of granularity and complexity. For example their might be one cube for a sales plan and a different cube for the production plan to which it was related. The net effect was an unwieldy model that performed badly and was difficult to administer and maintain. However, a new generation of products is transforming BPF capabilities and fascinatingly the advances are being spearheaded by second time around CTOs (Chief Technology Officers), such as Anaplan’s Michael Gould and OneStream Software’s Bob Powers who have put into practice what they learned from their experiences with first generation products (Adaytum and Hyperion respectively).
Central to Anaplan’s technology is a unified environment (single centralised business model), and patented Hyperblock technology (imbued with multi-core, 64 bit and in-memory processing) can handle the most demanding of models, i.e. with billions of cells, dynamic hierarchies and real time model changes. For example, Brussels Airlines uses Anaplan to get insights on product planning and allocation, cost planning, and capital expenditures. The airline leverages Anaplan to determine passenger revenue allocation to flight numbers in real-time. The Belgian company can also more accurately forecast future demand, and adjust plans ‘on the fly’ to account for personnel costs and functional costs.
If there were any lingering doubts about the musculature (scale, complexity and processing speed) of Anaplan’s business modelling prowess in the Cloud then one need look no further than large scale implementations by Aviva and HP for proof. For example, HP’s Vittorio Sanvito, Director, EMEA EG Sales Productivity & GTM, says that his ‘Sales Performance Management’ application in Anaplan covers 4,000 sales representatives, 22,427 customer sales quotas, 79 different sales plans, 165 sales metrics, 61 countries and currencies, 10 million transactions per month, 4,000 bonuses and 70 different SLA’s with third party organizations.
OneStream Software’s CEO Tom Shea, told FSN that OneStream’s new generation systems architecture has been pivotal to satisfying the massive data needs and complexity of “Global 2000” enterprises. OneStream, is also architected around a single unified CPM environment and what the company calls its “Extensible Architecture”. The latter allows OneStream to overcome the tension that often exists in BPF applications between corporate head office requirements and local requirements by allowing the model to be flexed in ‘horizontal’ and ‘vertical’ dimensions to accommodate specific operational needs without compromising the integrity of the single unifies environment. Tom and his management team lovingly refer to the extensible dimensionality as OneStream’s “secret sauce”.
During a recent visit to London, Tom told FSN, “It really differentiating at the high end of the market where there are complex needs. In the past companies have had to build completely different applications to meet different needs with all of the inefficiency and cost that this involves. Prospects and customers are amazed when we show them in just a few days of ‘proof of concept’ prototyping that we can do everything they want in one model.”
AAA Life Insurance Company is an example of a business that has implemented OneStream XF to deliver multiple and related solutions to meet all financial reporting requirements in one application. “We now have a unified system that is giving us significantly improved access to our data with flexibility in reporting and analysis. We also have significantly more transparency, visibility and control over our business,” said Tim Foley, Controller at AAA Life Insurance.
In the BPF space the debate is not so much around whether the application is managed in the cloud but more pertinently whether current solutions are muscular enough to handle changes ‘on the fly’, hundreds of users and vast multi-dimensional models while still recalculating with near real-time responsiveness. And with the world’s data doubling every year and many businesses seeking to combine operational and financial data in their plans the issue of handling billion cell models is unlikely to disappear any time soon. But don’t look to legacy products for a solution. Anaplan and OneStream are demonstrating compellingly that big requirements need a fresh approach.
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