The countdown is on. Today marks just three days out from the start of our annual customer conference, which will run May 14-18. This year, we’re going down south, holding the conference in Austin. I guess it’s true that everything is bigger in Texas, as this is by far going to be our biggest event yet.

The theme for this year’s conference is “Bridging the GAAP.” New research confirms CFOs have far too little time to conduct proper strategy. Something has to give. At the conference, we’re going to demonstrate through Host Analytics and partner best practice and customer presentations how a cloud CPM approach helps organizations make much better operational and financial decisions by streamlining and automating their consolidations, planning and reporting processes. You’ll hear from the likes of Groupon, Calypso, Check Into Cash, Acciona, Stylesight and more.

The days will be action packed and filled with fun events and also hands on training and breakout sessions on a variety of topics, including dynamic reporting, managing multiple currencies, getting the most out of rolling forecasts and much more.

And our keynote with Todd Buchholz, former director of economic policy at the White House, a managing director of the $15 billion Tiger hedge fund and an award-winning economics teacher at Harvard, is sure to be a winner.

I’m so looking forward to the rare opportunity of meeting face-to-face with our treasured customers at the conference and hear first-hand their stories about how Host Analytics has impacted their business and the bottom-line. Please don’t be afraid to approach me, I welcome the conversations.

See you in Austin!

More information on the conference can be found at: http://decisions2012.hostanalytics.com/

Less than two weeks until Decisions 2012! We are very excited to see our customers to share best practices and thought leadership around leveraging the Host Analytics CPM Solution. The theme of this year’s conference is “Bridging The GAAP”, and will include breakout sessions, demos, and networking–even an exclusive breakfast with Jon Kondo, President and CEO of Host Analytics. And don’t miss our keynote speaker Todd Buchholz, an award-winning economics and teacher at Harvard University. Buchholz targets his entertaining remarks to the cutting edge of economics, finance, and business strategy. He has advised President Bush, and is a frequent commentator on ABC News, PBS, CBS, and recently hosted his own special on CNBC.

Over 90% of last year’s attendees believe the improvements made to their business outweighed the cost to attend the conference.  Understanding more about the corporate performance management application helped them take advantage of all the functionality in their application, get their organization more involved with the planning and reporting processes, and subsequently made better decisions and better managed cash.

And if that’s not enough …… the majority of attendees interviewed last year said they would recommend it to a friend or colleague, considered it a great value, and most importantly, they would like to return in 2012! If you have to first convince your boss that it is worth your time and the company’s money to attend Decisions 2012, make sure to point out how you will be able to solve immediate problems in your finance processes and understand how you can use technology in your longer term initiatives.

Customers sharing their stories

Customers such as Calypso, Stylesight, and Martin-Brower will share their stories of leaving behind the “organized chaos” of excel spreadsheets, and discuss how their business have benefited from Host Analytics, including implementation, functionality, and efficiency.

New to Decisions 2012

Coming new to Decisions2012 is the Genius lounge. You will have the opportunity to meet with our experts from our engineering and product management teams. You can test drive new functionality available now, ask those gnawing questions, and experience a sneak peek into exciting roadmap items. For example, have a hands-on look at our dynamic reporting functionality and our new business analytics platform. We also want you to provide feedback to us – we can’t wait to hear your opinions on new functionality and its utility within you organization.

Demo stations…. Using one of our products and want to see what else can take your organization to the next level?  Take a tour of Host Analytics Consolidator, Decision Hub, Enterprise Report Manager or Host Analytics Budget and see what they can do for your organization with very little implementation effort.  Grab some time at refreshment breaks at our expert-staffed demo stations for a test drive.

Our Sponsors

We are excited and thankful to our sponsors for this year’s Customer Conference which include:

Cervello
Birst
ERP Logic
Proformative

We look forward to continuing to deepen our business relationship with all of you!

Interested in becoming a sponsor? There are a variety of sponsorship options allow you to meet your cost and ROI needs, including:

Dedicated showcase hours that optimize interaction time with our customers.

• Invaluable exposure to other Host Analytics partners.
• A La Carte event marketing opportunities to enhance your brand’s visibility at the event.

Whether you are demonstrating your product at the Partner Showcase or sponsoring the conference, don’t miss this valuable networking opportunity! Click here to view the sponsor prospectus.

Join the conversation

For up to date information on Decisions 2012, follow Host Analytics on Twitter using #decisionsconf, Like our Facebook page, visit the Decisions 2012 event page on LinkedIn, and of course the Host Analytics website.

Most of us in today’s society go about our day plugged in to the Internet or connected through our phones. I know I do!  Sometimes, however, it is nice to take a break from email alerts, instant messages, and Skype alerts.

With Host Analytics Offline Planning, you can take a break from the “plugged-in” world and still get your work done.

Host Analytics Offline Planning Workbook (also referred to as Offline Planning) was created to allow you to perform budgeting tasks while not connected to the Internet.  It consists of an Excel Add-In created by Host Analytics, which allows you to open specific templates in Excel.

Offline Planning allows you to do more than just “open templates” in Excel, however.  With Offline Planning, you can check template data in and out, synchronize offline data with online data, and refresh offline data with new budget data input by co-workers who are online or plugged-in.

Offline Planning is fully secured and accessed via Host Analytics. In fact, you must login to Host Analytics to access or save templates from the Excel Add-In (depicted below).  However, before you can login, administrative users must provide you with access privileges to Offline Planning.

Once logged in to Offline Planning, you can open multiple templates for a Budget Entity in the same Excel Workbook. The following page displays a template opened for “budget input” in the Offline Planning Workbook.

Besides inputting budget data, Offline Planning enables you to apply spreads, apply global fields, apply forecast methods, and modify the spreadsheet grid. For those of you who are not familiar with these capabilities or terms, it means that you can do a whole lot of “stuff.”

I recently heard that there are more Offline Planning capabilities coming down the Host Analytics pipeline in the near future! So, if you can’t always be plugged-in or don’t always want to be plugged-in, check out Offline Planning. And, to those of you who are or have ever been Michael Jackson fans, “rock on” (as in Off the Wall)!

Want to learn more? Watch the demo.

Host Analytics is offering an all-new type of reporting by joining two types of existing reports—ad hoc and financial. It’s good news for users because they will be able to benefit from both in a single interface.

An ad hoc report is a non-standardized type of report. The Host Analytics’ ad hoc reporting tool offers a simple and flexible reporting method with an intuitive interface to easily perform financial data analysis. For example, you might use an ad hoc report to verify the accuracy of data.

The typical structure of a financial report consists of an X-axis (row) and a Y-axis (column) on a report grid. For example, an income statement report might be shown with years and months on the column axis and income statement accounts along the row axis. At the intersection of each member along each axis is a cell, which displays the measure data for the company or department.

Together, ad hoc and financial reports can be thought of as the Dynamic Duo. For those of you who aren’t familiar with this term, the Dynamic Duo has been used to describe Batman and Robin; two superheroes that always needed each other to “get the job done.”

Dynamic Reporting offers all the same features as financial and ad hoc reporting (report sets, insert formulas, formula exceptions, ranking) through a common and fully integrated user interface. The new Dynamic Reporting user interface was designed to provide the best possible experience by offering drag and drop capabilities, quicker report building and design functionality, and a more user-friendly method to modify previewed reports. This interface also enables you to easily toggle between financial and ad hoc modes.

The image below depicts a Dynamic Report in the report results pane. You may use this pane to further manipulate report output data. You may also drill through the output, insert formulas (average, sum, maximum value, etc.), and pivot the columns and rows.

Host Analytics is currently continuing to evolve the Dynamic Reporting feature. If you’re a finance professional and need a reporting tool to “get the job done,” Dynamic Reporting may be the answer.

Want to learn more? Watch a video.

Ad-hoc Reporting

Financial Reporting

Decision makers must be discriminative when it comes to financial information gathering and sharing. It’s important to have the right information that is easily accessible to make fact-based financial decisions. So, where do decision makers go to get the right tool to gain valuable financial insight to make the best possible decisions? The answer is Host Analytics.

Host Analytics has a feature called Executive Report Manager (ERM), which provides presentation quality, real-time, fact-based financial reports via an Internet browser. This means that you can be anywhere in the world and as long as you have access to a browser, you can access and report on real-time financial
information.

One question I asked when I first heard of ERM was, “is ERM just for executives?” The answer is, “absolutely not.” Executive Report Manager is for anyone in a decision-making role. Heck, the 3 Little Pigs could have used ERM to realize that even though building a brick house was more costly, it was a wise financial decision when dealing with unruly wolves.

Now, let’s get down to the nitty gritty and explain how ERM works. Executive Report Manager is an integrated solution, meaning that it works with Host Analytics Scorecard, Host Analytics Consolidator, and Host Analytics Budget by pulling data into one central location. Information is gathered and compiled into one informative Executive Report as depicted below.

Not only does ERM enable you to generate reports, it also provides distribution capabilities. After all, fact-based information is even better when shared. The solution also has a unique and user-friendly Workflow feature that provides you with a high level of collaboration.

Executive Report Manager is customizable, has an automated table of contents, and built-in capabilities to format your documents any way you like. You can also add graphs and snapshots to any of your ERM reports. If you are a discriminative decision maker, ERM is the way to go.

I was recently reading an article about SaaS and on premises software, which pointed out the pros and cons of each, mentioning a lack of configuration options with SaaS.   I think that may have been a good argument for some SaaS applications five years ago, but when I think about the applications we use and how we integrated them together, the term “Imagineering” comes to mind.

“Imagineering is a portmanteau word combining “imagination” and “engineering” most notably used by Walt Disney Imagineering. However, contrary to popular belief, the term was neither coined by Disney, nor originated there. “Imagineering” was popularized by Alcoa around 1940, and appeared widely in numerous publications and promotional print materials throughout the decade.”

We “imagineered” or current SaaS solution.  The diagram below shows some of our current SaaS applications.  The “boxed” items represent our SaaS financial applications. 

SaaS Imagineering along specific core application platforms

We didn’t settle for a stack of disparate applications that require significant “fat fingering” between applications.  We purchased solutions that work around core platforms.   The core of our financial system is NetSuite for ERP and Host Analytics for planning, budgeting and financial consolidation.  In addition we have Avalara for sales tax calculations, Paychex for both payroll and expense report submission.  We also have a SaaS based fixed asset system not on this slide, all integrated together in a seamless applications merging best of breed solutions to accomplish our particular requirements.  We also leverage Boomi for data integration if SaaS applications don’t talk to each other, but to this point we have only used it on our non-finance applications.

As I thought about it, we “imagineer” our internal SaaS solution around four key “core platforms”.

1. Financial platform by implementing SaaS based ERP solutions as an accounting solution and Host Analytics for financial planning and reporting.
2. Sales and Marketing platform by implementing CRM, Marketing Automation and Social Media Management software that integrates with each other.  Multiple SaaS solutions are deployed to tailor the solution to the company’s needs. (for an example of SaaS Imagineering in Marketing Automation please check out this blog post.)
3.  Human Resource platform by implementing Payroll and HCM applications to manage and pay the talent in the organization.
4. Operational platform.  These solutions vary depending on the industry of each company.  In our business we leverage Accompa, Parature, and OpenAir.  The last two applications integrate with Salesforce to provide a holistic customer view.

By focusing on these core platforms and tailor the group SaaS solutions within these areas to meet your needs business users are driving integration and the benefits of automation to higher levels.

Since late June I have been writing about integrated business planning. On July 25th I introduced the key components of an integrated business planning process and then in subsequent posts I walked through each of the components and also talked about best practices. In this final post around integrated business planning I will highlight situations/challenges we experience at Host Analytics when implementing an integrated business planning process.

1. Many companies have the key components of an integrated business plan, they just aren’t connected. The diagram below highlights a typical situation. A company will have all four processes: Strategic Planning; Project/Capital Planning; Operational Planning via S&OP; and Financial Planning; but they are managed by separate groups and the dots are never connected between the plans. At a minimum each plan is “siloed.” Chances are, each plan is fighting for the same resources and could be in conflict with the other plans. To mitigate this challenge companies should start by taking an inventory of all of their planning processes and work together to understand where one plan stops, the other starts, and integrate the plans.
   

   Siloed Planning

2.  For a multi-division corporation the challenge is multiplied because each division has their own Strategic Plan, Project/Capital Plan, Operational Plan and Financial Plan. These plans need to be consolidated at the divisional level. They also need to be consolidated and coordinated at the corporate level, i.e. combining all divisional Project/Capital Plans, Operational Plans, and Financial Plans. Strategic Plans should normally start at the top of the organization and driven down to the divisions and coordinated across divisions. To mitigate this challenge, divisions must have a well defined integrated business planning process, and then corporate planning will need to work through the plans and abstract and standardize the common planning elements throughout the plans. Too often, corporate mandates the planning process of what they require and divisions maintain two separate planning processes, one for corporate and one for internal management.
   

   Coordination becomes key when managing a corporate planning environment

3. The third challenge is to create a flexible plan at both the divisional and corporate levels. This requires plans to be predominantly driver based and where possible having plans across divisions use the same drivers. Traditionally when we think about budgeting we think about a bottoms up, detail line item budget with a lot of line item input. In order to allow the plans to be flexible at both the divisional and corporate levels they need to be driver based. To mitigate these challenges, divisions need to understand both the risk aspects of their plan (i.e. where could things go wrong) as well as the “fixed,” “semi-fixed” and “variable” nature of the plans and model them accordingly.

When I started this series in early May on “The Future of Planning” I focused initially on the data dilemma and external factors that drive a business, then I went into some detail on integrated business planning. In my next couple of posts I will finish up this series and tie in my prior post on Moneyball by focusing on a metrics approach to management, effectively bubbling up key information into leading and lagging indicators to drive the business and react to changes in business climate.

I saw the movie “Moneyball” starring Brad Pitt (http://www.moneyball-movie.com/), within the first fifteen minutes I was seeing significant parallels between that story and the story of business management/business planning. 

Early on in the movie, a group of scouts and managers for the Oakland A’s baseball team are sitting around a conference table trying to figure out how they can replace key players they lost because they could no longer afford them given the team’s budget constraints (budget constraints sound familiar?).  The loss of these players left a huge hole in the A’s program. As you might expect, the meeting was a lot of “shoot from the hip” characterizations of existing players based on assumptions as varied as what the player’s wife looked like or what car they drive.  In this meeting Billy Beane (Brad Pitt) and Peter Brand  (Jonah Hill) suggest that the past just doesn’t matter, the only thing that truly matters is “on base percentage”.  Their thinking was if they could get players on base, they will win. They proceeded to identify those undervalued players with the highest “on base percentage”.    

Bingo!  This line of thinking made me think of the Balanced Scorecard Methodology and the passionate belief in certain key metrics driving the business.  To Jonah Hill’s character, it is all about getting on base, any way you can, it is about on base percentage (Key Metric).  To Brad Pitt’s character, only one game mattered, winning the last game of the season…the World Series game (goal).

During the movie:

• There was a familiar problem; the coach (management) wasn’t following “the plan,” specifically not playing/developing the players with the high on base percentage that was previously agreed to.   In the business environment this would be similar to business managers doing business as usual rather than making decisions that support the strategy. Brad Pitt (I.e. the CEO) took radical corrective action.
• It wasn’t just a matter of just hiring the right players with the right on base percentage, however.  Jonah Hill’s character (I.e. business analyst) worked closely with the players and coached them on their current metrics and how they could increase their on-base percentages.  Business translation: even though the importance of key metrics may be obvious to you, people need to be coached on their use and sub-metrics that support them.  When ahhh moments happen, they get it.

Other observations that parallel business:

• Baseball has always had tons of metrics (known as saber metrics).  I remember 30 years ago listening to the game and the announcer stating the batting average of the player at the plate on even dated Tuesdays against this pitcher (I exaggerate, but you get my point).  It doesn’t matter what you measure, until you use them in day to day business for fact based decisions.
• The opening scene I mentioned above reminded me of business meetings I have been in discussing customer profitability.  Everyone shoots from the hip because they haven’t looked up or don’t have a way to measure customer profitability but it is key for corporate profitability.   I was reminded of a book I read titled “Time-Drive Activity-Based Costing:  A Simpler and More Powerful Path to Higher Profits”  published  by Harvard Business Press (April 4, 2007) by Robert S. Kaplan, Steven R. Anderson  and what is referred to as the  “whale curve of cumulative customer profitability”, which is typically never part of the discussion  (shown below). 

Source: Page 246 of “Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher Profits” by Robert S. Kaplan and Steven  R. Anderson, published by Harvard Business Press, 2007.

Based on the analysis in the book, many companies experience  a minority of customers  that create 150% – 300% of the total profits.  As show in the graph when the line starts at zero and moves up to about 180% on the “y-axis”.  The majority of customers often break even.  The line on the graph is horizontal at the 180% and maintains current profitability but doesn’t add to it.  The least profitable customers can lose 50% – 200% of total profits and hurt the overall profitability of the company as shown by the line going below the 100% line. (because the cost of serving the customer is greater than the revenue)”. 

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My main take away from the movie (as a declaimer, if it’s not obvious, I’m an analyst at heart) is let’s learn from the innovative leadership of this legendary A’s team, if  better metrics-driven management with proper coaching of those metrics can have a positive impact on a baseball team — where individual split-second performance at the plate and in the field is what matters  and we use averages to explain it — there’s no reason the same positive outcome shouldn’t come from better metrics-driven management and fact-based decisions in the business as well.

Speaking of major league baseball, huge congratulations to the 2011 World Champs, the St. Louis Cardinals!

I recently read a blog by Sandy Richardson, titled “Is the Balanced Scorecard Out of Date?” and found it very interesting, I felt that it was dead on point so I wanted to share it (click here to go to that blog). 

As part of Sandy’s analysis she highlights the criteria needed “to succeed in the business conditions we are facing today,” which I think needs repeating.

“The short list of key requirements includes the ability to:

1.            Know when business performance is heading in the wrong direction as early as possible and have the business intelligence required to change course, eliminate performance gaps/root cause problems in a surgical way, and produce improved results in a short period of time;

2.            Have quick access to accurate and timely data that facilitates meaningful and consistent decision-making across the organization;

3.            Leverage key external and internal insights and information efficiently and demonstrate agility (the ability to modify the business strategy and align tactics quickly) in the face of changing business conditions (including customer and market needs);

4.            Access cause and effect data that can help make targeted investments that are guaranteed to produce specific outcomes and results;    

5.            Optimize operational efficiency and increase the capacity of existing human resources by eliminating duplication of effort and streamlining work activities; and

6.            Develop the capacity to produce better business performance results on a consistent and sustained basis.” ¹

¹ From Sandy Richardson’s blog titled “Is the Balanced Scorecard Out of Date?” dated 10/11/2011.

I found this list interesting for a few different reasons, first as a check list to measure if an organization has the necessary tools to compete in this business climate and second in the breakdown of the items. The first four items require access to information to support decisions.  The last two are focused on the ability to consume the information and affect business outcomes.  

In my most recent posts on “The Future of Planning” I’ve focused on the components/methods of Integrated Business Planning, but this process breaks down unless you have information to support better decisions.  When I started this series on “The Future of Planning” I focused on “The Data Dilemma” and “External Information”.  In my next couple of posts I will finish up this series by focusing on a metrics approach to management, effectively bubbling up key information into leading and lagging indicators to drive the business and react to changes in business climate.

This week’s post is on Strategic Planning.  This is the last component of the four key components of integrated business planning.  Like project planning from the previous post, strategic planning focuses on the “grow” and “transform” business functions.

As a way of background, for the past 25 years I have worked within companies, as well as alongside them as a consultant to facilitate the creation of their strategic plans.  Early on this process was very loosely defined and resulted in a lot of good ideas. The executive team felt good about the plans, but unfortunately, in most cases those plans failed.  They typically failed for any number of reasons including:  it produced a nice fancy document no one wished to keep up to date and revise;  it was poorly communicated beyond the executive team so it had little support;  the vision was documented but the projects to accomplish were not planned, quickly forgotten or they were killed in the next budget revision and went unfunded; no one established the criteria to measure the progress of the plan and hold individuals accountable and departments for their part of the plan.

In the mid 90’s I was introduced to the Balanced Scorecard Methodology, developed by Drs. Kaplan and Norton.  At that time the Balanced Scorecard Methodology focused on strategic measurement.  Over time that method has transformed based on how companies use it to a strategic planning methodology.  When that happened, my world became clearer.  That ever evolving process suddenly became well defined process.  All the information I had tested and tried using other strategic planning methods became noise.

Just to give you an idea how it has evolved, the slide below shows a timeline of the books written by Drs. Kaplan and Norton and just viewing the titles alone, you can feel the transformation from strategic measurement to strategic management.

Timeline of Books written by Drs. Kaplan and Norton on the Balanced Scorecard Methodology

I don’t have the space in this post to dig in any detail to the process of the balanced scorecard methodology, but I would like to offer you a free book:  “The Execution Premium” by Drs. Kaplan and Norton. This will provide detail on both the process and case studies of organizations that have successful implementing the balanced scorecard methodology for strategic management.  Click on this link and it will take you to a page to register.

The book has some tremendously helpful takeaways for strategic planning, including:

• Clarity of vision – using strategy maps and theme reports help companies focus on what is important to their business
• Communication – it provides a methodology to get everyone in the company focusing on how their job contributes to the overall plan.
• Measurement – When you hold people accountable for realistic goals and objectives and their measurement is clearly defined, magic happens.  The model I use for sales reps is telling them what they need to do and how they are compensated and they achieve it.
• Converting “transform” and “grow” projects to action – by linking the action plans defined during the process to the financial plans.

I know there are those opposed to this methodology, claiming it doesn’t work or perhaps it failed for them but I think the key is it gives you a place to start and a process to follow, over time you will keep what works for you and tweak what doesn’t work within your organization’s culture.

My next post will focus on the challenge of integrating these four areas in a corporate environment.