Who should read this document?
Entrepreneurs, Managers, CFOs, Controllers, Financial Managers, Key Users, Auditors, Tax Advisors, Bank Managers, Financial Analysts, Management Consultants, Business Professionals.
Roman Empire army can still teach something nowadays to enhance Enterprise Integrated Financial Planning (EIFP) as part of FP&A.
Adopt an innovative approach for financial planning analysis during board meetings that supports corporate decisions and assists with strategy definition.
Adaptation of image from “Ryse: Son of Rome” (Game Movie) – Copyright and Trademark of Crytek GmbH
WHAT WOULD POSSIBLY GO WRONG IN A BOARD MEETING
The preparation of top management meetings where financial planning analysis plays a central role is a demanding task, whether it is performed in SMEs or Large Organizations.
Different size of the business drives different types of difficulty, such as coordination, harmonization and common approach in large fragmented corporations or lack of time, resources and skills in SMEs.
During the meeting you, as a financial professional, need to support the discussion with accurate and meaningful data and help the managers for any question that may arise around forecasted figures.
As far as more questions are put forward, you should be able to respond quickly or, as a second less welcome option, take note as an action item for the next meeting.
But what happens if unexpected alternative scenarios are foreseen during the meeting?
What if the magnitude of the scenarios impact cannot be easily and quickly traced and measured across the entire company business processes?
What would be the consequences on company profitability?
Would it also affect the company in term of re-thinking strategy?
And what if these scenarios cannot be simulated on the fly despite the real time access to backbone applications (ERP, BI, analytics etc.) which are far too rigid and require an off-line preparation simply not feasible right now?
In other words, what if you cannot quickly address the board questions?
Well, as said before you can certainly argue that these scenarios can only be prepared for the next meeting, but you may not “carpe diem” to impress the board of directors right now.
After all, you prepared the meeting meticulously, accompanied by the required documentation, knowing what kind of questions would have been asked due to your long experience, so what went wrong?
HOW TO MAKE SURE THAT THE MEETING OF THE BOARD OF DIRECTORS RUNS SMOOTHLY
What would basically prevent you from making the board happy is lack of Agility.
Agility provides a competitive advantage that is increasingly crucial.
But what is agility in the context of a board meeting centred on financial planning?
Agility can be seen as the ability to make change a regular activity during these meetings and give prompt answer to unpredicted scenarios.
In this regard, Agility is depicted as an adaptability to new events, new environment and challenges that, nowadays, occur more and more often.
adaptation of Photo by chadmula from FreeImages
ASK THE ROMAN EMPIRE ARMY FOR HELP
The Roman Empire army conquered the world more than 2 millennia ago.
Among other reasons, this was due to the exceptional efficiency of the army, together with the organization in legions, divided into cohorts and centuries.
Strict training ensured that the formations were capable of manoeuvring, resting on the battlefield with war machines.
But what did the army of the Roman Empire devise to change the fortunes of a battle in its favour when brute force and organization were no longer enough?
The element introduced by the Roman Empire army were the Agility of the Auxiliary Troops, smaller and more flexible than legions.
They supplied mainly cavalry departments: a specialty neglected in the military order of Rome. But they also provided light infantry departments, as the heavy one was typical of the legion.
The auxilia also performed support functions such as exploration, research, contact with the adversary, construction of defensive fortresses.
PARALLELISM BETWEEN ROMAN EMPIRE ARMY AND EIFP APPLICATIONS
Transposing the Roman Empire army approach to a business organization, we can compare the legions to the backbone applications (BA) that govern business processes.
Thus, when the Legions (BA) couldn’t overcome the enemy (unexpected scenario), they re-thought their organization to adapt to unforeseen events (Agility).
These non-Roman soldiers proved to be essential for the defense and expansion of the Roman Empire.
ROMAN EMPIRE ARMY
brute force and organization
extensive data processing and archiving
non-citizens bringing new war techniques
§ third party bringing agility and responsiveness
§ disclose further elements for discussion and corporate strategy guidance
The auxiliary specialized troops became an integral part of the legions and were deployed on the wings of the formation to make war strategies more efficient and agile.
Hannibal was defeated also thanks to this innovation.
ASK AUXILIARY APPLICATION FOR HELP
We can now appreciate the value of auxiliary support and identify the characteristics of an application that can quickly simulate a financial multi-scenario planning on the fly:
Agile: the application should be able to rapidly respond to multi-scenario planning.
Comprehensive: encompassing the organization fundamental business processes such as Procure-to-Pay, Plan-to-Produce, Order-to-Cash etc.
Interdependent: the what-if changes should propagate across all relevant business processes and give evidence of variations. For example: change in Production Scheduling affects Inventory which, in turns, impacts availability for Demand Planning which reflects on Financial Statements and KPIs.
Collaborative: managers from different departments will provide input to the scenario’s analysis which, in turns, will be translated by the financial professional into the application to assess the impact. Non-financial managers (e.g. sales manager, operations manager, human resources manager, plant manager etc.) will immediately realize stakeholders value change when their areas are involved in new scenarios.
This will give more consciousness of value drivers across the organization.
Such a tool will allow organizations to perform scenario planning with a quick simulation in real time, and assess opportunities and risks effectively, enriching the corporate culture with the ability to perform analyses in evolving environments and be ready for unforeseen events.
OUR INNOVATIVE EXCEL/VBA SOLUTION FOR ENTERPRISE INTEGRATED FINANCIAL PLANNING (EIFP)
We, at Crown Consultancy Services, know that it is possible to develop an Excel application with the highest degree of security, data consistency and reliability to elevate Excel to the rank of professional EIFP application.
For this reason, we designed, developed and market ProfitQube™ – the first and the only EIFP software– that brings together the ease of use of Excelthe power of VBAlanguage and the end-to-end business process simulation for manufacturing, trade and services companies within one modelling environment.
ProfitQube™ is a simulation software tool that provides Excel interface for modelling complex integrated financial projections producing IFRS Financial Statements with Charts, KPIs, Ratios and more.
ProfitQube’s mission is to enable SMEsLarge OrganizationsFinancial Professionals to manage budgets, forecasts and plans for critical decisions.
New Product – ProfitQube Consolidation is now available.
ProfitQube Consolidation is a management accounting add-on of ProfitQube which enables the consolidation of Income Statement, Balance Sheet and Cash Flow (Direct and Indirect).
The consolidation process is aimed both for corporate internal control, plan, budget or forecast and for evaluating strategic investments and joint ventures.
Crown Consultancy Services Company is a leading provider of EIFP financial simulation software.
ABOUT THE AUTHOR
Crown Consultancy Services was founded in 2000 by Dr Gian Paolo Avanzo PhD (Business and Economics University).
He has been involved as Chief Financial Officer / Financial Analyst in multinational
companies (Unisys, Avdel, Chubb, TNT) for 10+ years.
He has also acted as Senior Consultant/Project & Transformation Manager implementing SAP ERP and Organization Projects worldwide for Blue Chips (Total, Novartis, Shell, ABB, AbbVie, Kraft Foods, Owens Illinois, Saudi Electricity Company, Fuji and more for 20+ years).
PARTNERS: Accenture, Atos Origin, Axon HCL, Bull, CRA, Deloitte, E&Y, IBM, Infosys, KPMG, PWC, Siemens, Tata, Unilog and SAP.
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PROFITQUBE™ is a Crown Consultancy Services Ltd product. All rights reserved.
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