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Innovative Budgeting & Planning Webinar

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Budgeting & Planning WebinarTo be successful, agencies and business alike need to be agile, flexible, and decisive - especially when it comes to budget and financial planning for programs whose funding always seems to be on or near the chopping block. Alion Science and Technology Corporation was able to hurdle those challenges and also achieve a 50 percent reduction in overall planning cycle and effort, greater budget accuracy, and more confidence in strategic decision making. How? By leveraging innovative tools and a demand-based approach to planning and forecasting. Learn about how this organizations' innovative efforts are paying off.

This Budgeting & Planning Webinar video is from the Proformative webinar "Innovative Budgeting and Planning" held on June 20, 2012.  The webinar features presentations from Sarah Bergseth, Solution Implementation Partner, NTT Data Inc., Barry Broadus, CFO, Alion Science and Technology, and Carr Phillips, Industry Marketing Senior Director, SAP.


Budgeting & Planning Webinar


Carl: To set up the discussion for today, I wanted to take a minute and walk through a high level overview of the planning and consolidation framework. For many of you, you live this every day, but it's helpful to have a common point of view for us to start, even if it is overly simplified.

The first step in the planning and consolidation framework is communication. You need communication;   targets, timelines, and guidelines for everyone that is involved in the process. The second step is collection. This is where you collaboratively create plans and forecasts according to the corporate guidelines you've just outlined.

Planning can be anything from strategic planning to production forecasts, financial impact, research and  development, capital expenditure, headcount, staffing, operational expense, and cash flow planning. Then another area is performing rolling forecasts and continuing planning, as well as integrated SOX compliance financial statement modeling.

The third step is an analysis stage, where you consolidate the data and model multiple scenarios. This can include things like inter-company matching, reconciliations, inter-company eliminations, management consolidations, roll-ups and reporting, as well as legal and statutory consolidations.

Finally, there's the report out phase, where you generate and distribute reports and plan as well as perform, and analyze variances to drive re- forecasts. You can be ad hoc in formal reporting, as well as variance analysis, COG analysis, and driver analysis on production, expenses, etc.

I work closely with many of our professional services customers to understand their business challenges. What I hear most from people like you are that budget cycles are way too long, that they have difficulty in modeling the anticipated resource needs in revenue forecasts for upcoming periods. That you need to improve the planning accuracy and reduce the associated cost.

That there's a general lack of confidence in the organization in regards to some of the financial results and the reports they were looking at. There's a need to quickly model potential business strategies, and to take actions on plans that maximize the value. Why is this? Among many other reasons, two contributing factors are the use of different tools and processes to do your planning, to do your consolidating, and to do your reporting.

All of these tools use both structured and unstructured data that is pulled from a wide range of systems across the enterprise. Customers like you have told us that these challenges and issues have significant impact on your ability to get the visibility and operational financial performance that you need as fast as you need it, and in the time you need to be able to make adjustments to any changes in market conditions.

A couple of key takeaways for you to consider. First off, your company has special needs, and deserve a vertical solution. For instance, people organizations like professional service firms are very different in how they organize and operate than an asset intensive industry.

Working with our customers, we have found that they want their tools to have built-in industry standard dimensions and KPIs, sample business rules and logic, sample allocations, dynamic reports and input forms that are relevant to their industry. I'll give a more specific example on the next slide. Nothing will be 100% fixed, but providing a vertical solution goes a long way to reducing the effort and risk for a project like this.

The second takeaway is you want a partner who understands your issues and will actively help you reach your planning and consolidation goals. It seems pretty straightforward, doesn't it? It is important to select a partner who is open to collaborating and co-innovating with you, one that is truly open to supporting your business needs and is committed to your success.

Finally, assess your partners carefully because they're the ones who, long-term, will help you with these two points. This goes without saying as I'm sure you're already evaluating your existing and potential partners, to understand the risk and cost of working with them on any potential project.

Editor's Note: Please take a look at some of the other webinars in Proformative's library: Corporate Financial Planning Strategy Webinar, SaaS Consolidation & Reporting Webinar, Managing Debit & Credit Card Merchant Fees Webinar, Evaluating Accounting Software Webinar and Chief Financial Officers & Cloud Computing Webinar.

I spoke about the typical planning and consolidation framework, which is used by most companies to perform financial planning and forecasting. That said, there are important differences in how this framework is applied in different industries. In the professional services industry, for example, firms need to be able to plan by project, by client, by service line, and by role.

What does that mean? How does that work? First, the professional services firm, the main business operation is the selling and delivering of project-based services. In this process chart, a typical professional services engagement management life cycle starts with a proposal, then works through the project setup, resource assignment, service delivery, and then invoicing and collections process.

All of these activities generate project, client, service line, and role data that you need in order to perform the planning and consolidation process. A couple of specific examples within this process, for instance, the rate model. You would need to set standard hours or days or standard bill and cost rates, burn rates, and currency rates, for each of your roles in your organization. Each of these could vary by project, by client service, by client, and by service line.

Another example would be the service director. That person would need to be able to allocate headcount based on standard hours or days. Again, this could be done by project, by client, by service line, or by role. Finally, another example is the client manager. This person needs to be able to plan, validate, and update days per project, per role, based upon granular knowledge of the roles, the industry, and the utilization, as well as to establish client bill rates.

In order to drive higher profitability for a professional services firm, firms need to be able to plan and forecast. Not just on an enterprise-wide operations level, but be able to plan and forecast for the project, client, service line and role level in order to drive the profitability and improve profitability. Thank you for your time, and I look forward to your questions at the end of the webinar. Back to you, John.

John: Thank you for that Carl. Thanks for that quick intro. Onto what's going to be the longest section of today's presentation, which is hearing from Barry Broadus. Before we get into that, since this is a CPE garnering event, we need to go through two polling questions, as I mentioned up front. I'm going to launch the first of the two polling questions right now, which you'll see on your screen right now.

These polling questions aren't a test of what you're seeing. They're actually a way for us to get the pulse of the folks who are online today and understand what tools you're using in the planning process. We will revisit these poll results when we get to the Q&A panel session at the end of today's webinar.

I would also note, even if you're not here for CPE credit, please take just ten seconds, take a look at that question, and go ahead and give us your answer. All of these poll questions today are anonymized. We're just interested in seeing where the audience stands in terms of these few questions that we'll be asking today.

I will also take a moment to remind folks, please ask questions as we go, and we'll do our (inaudible 00:07:16) best to get to them when we get to the Q&A portion of today's webinar. I'll give you about five more seconds, and then we'll go ahead and close this down and move on to our next speaker.

Okay. With that, I'm going to close the poll and we'll go ahead and hop into our next speaker. It's my pleasure to introduce Barry Broadus who is the acting CFO of Alion Science and Technology. Barry brings over 25 years of progressive business and financial management experience with technology-based companies, providing products and services to the federal government and commercial marketplace.

He currently serves as the Chief Financial Officer acting at Alion Science and Technology. Barry is responsible for the direction of Alion's financial operations, financial management reporting, SEC and other external reporting requirements, financial systems, budgeting, planning, and forecasting functions. Prior to joining Alion, Barry served as VP and Business Controller at Science Applications International Corporation, or SAIC, where he was responsible for the financial oversight of the energy, environment, and infrastructure business unit.

Prior to SAIC, Barry was the CFO for Brainbench, Inc. and at EDS he served as the Military Business Unit Controller. That's quite a bit of fantastic experience, and Barry it's our pleasure to have you with us this morning.

Barry: Thanks, John. It's a pleasure to be here. I appreciate everybody for hanging in there and signing on for today's presentation. I hope that you find this is helpful. Really the main reason that I'd like to present today is to talk about how our companies use SAP's APC product to really transform how our company does all of our budgeting and planning, as well as our forecasting and management reporting. I look forward to your questions as we get through the presentation.

All right. Going on to just a bit of an overview of our company, our company is headquartered in McLean, Virginia. We're in the aerospace and defense business industry, and some of the products and services that we provide our customers are really high-end engineering - naval architecture, marine engineering. That is really where we do ship design for the U.S. Navy and navies across the world.

We have a very sophisticated modeling and simulation business, and this is where we do a lot of 3D simulations, training, or the U.S. government specifically for the..."

End partial: Budgeting & Planning Webinar


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