Outdated budgeting, forecasting and reporting processes
Implementation of cloud services
New ownership leads to process examination
The client is a privately held manufacturer and distributor of after-market replacement parts, with operations in the U.S., Mexico and Canada. The Alabama-based company produces alternators, starters, steering pumps, rack-and-pinion products, and brake calipers. Fueled by a change in ownership and new growth via acquisitions, the manufacturer evaluated its legacy Excel-centric budgeting, forecasting and reporting processes.
Process improvement on a limited budget
After careful review, the reporting process was deemed insufficient. The company was unable to produce the regular forecasts expected by the new owners, and the general ledger chart of accounts did not meet corporate reporting needs — they required the use of a decoder and Excel to map segments to financial reporting lines.
Another challenge faced by the client was the lack of visibility into the sales plan. The existing process didn’t allow easy manipulation or movement of data when individuals left the company or were reassigned, making it difficult to adjust historical data to reflect current business structure.
Finally, as the manufacturer confronted the need to invest in a new tool, it also had to face the limitations of lean finance and IT organizations, as well as its unfamiliarity with cloud-based applications.
WHAT THE TEAM DID
Cloud services — one step at a time
The Grant Thornton LLP team assisted the client with the implementation of Oracle Planning and Budgeting Cloud Services (PBCS) to transform its planning and budgeting process. By eliminating upfront licenses and infrastructure investments, the company was able to focus on a measured approach to implementing the new solution, which involved defining multiple releases over a period of time to enable it to reduce risk and improve incremental ROI.
By taking a multirelease, “walking” approach, the manufacturer was able to provide greater user exposure and adoption while avoiding an overengineered solution. It also enabled the company to realize benefits sooner than with a traditional “big bang” approach.
The team ultimately defined four releases of the tool set, with increasing functionality.
The first release established the base application and core dimensionality. This was critical because it created the dimensional backbone to support easier report creation. Key to this dimensionality was the underlying data mapping that was created to support the loading of e-Business Suite data. Finally, Excel worksheets were replaced with dynamic data forms and SmartView reporting.
The second and third releases were implemented simultaneously and incorporated cash flow reporting and sales budgeting. Cash flow reporting established a cash flow statement and supporting calculations and input forms standardizing and simplifying the cash flow process within the tool set. Sales budgeting functionality was built using a second plan type and included new dimensionality for customers, vice presidents and sales reps, which provided more planning and reporting flexibility. One of the application’s highlights is the ability to seed a budget with trend data leveraging historical information. For a budget user, this means they can amend a projected budget instead of creating one from scratch.
The current and final release involves expanding the forecasting functionality. The client is moving to a three-year forecast outlook with the out-years being calculated by drivers, speeding and simplifying the process. In addition, forecast reporting will be deployed to support a 12-month rolling concept, giving the company better visibility into future performance expectations.
Benefits and value achieved
One of the primary lessons learned — unique to a cloud implementation — is balancing pace with momentum. While a multirelease schedule enabled controlling the pace of the project, it’s easy to allow delays to impede the overall project momentum. In addition, the reduced upfront financial investment — inherent in a cloud deployment — can create an environment where deadlines receive less scrutiny. Maintaining consistent momentum is key to realizing ROI.
Consistent momentum requires the ability to make decisions quickly. Cloud implementations follow rapid timelines, so delays in decision-making can have a compound impact. To avoid “analysis paralysis,” the focus must remain on the known and anticipated versus what is possible.
Another lesson learned is to begin data validation and reporting at the same time that dimensionality and initial data are loaded to the application. This activity will enable meaningful confirmation of dimensionality and hierarchies. Accomplishing this validation requires early training in the tool.
Finally, when implementing PBCS with a lean and multirelease mindset, it is critical for the business to understand the primary tasks for which it will be required to contribute. Tasks that are owned by the business include:
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Testing dimensionality to confirm it is appropriate and all necessary intersections are available
Assuming functional ownership of data mapping
Leading and performing data validation
Defining the budget and forecast processes, including timelines, level of detail and required inputs
Assigning and maintaining user security
Defining, designing and building reports
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