[Reblog] How to Integrate Financials with S&OP

A few days back, well-known S&OP / IBP consultant Stephen Crane posted an article on LinkedIn entitled "How to Integrate Financials with S&OP." It was refreshing for us here at River Logic to see this type of post coming from someone like Stephen — a big voice in the S&OP / IBP space — as this is a concept we've been trying to push for years now.

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CFOs: Prepare for Trump's Corporate Tax Reforms

Trump’s election victory, coupled with Republican control of both houses of Congress, means we are likely to see a strong and decisive start to his presidency, with tax reform high on the agenda.

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Syncing Financial And Non-Financial Data

A recent blog post by Ira Apfel on SAP's Digitalist Magazine discusses how the role of Financial Planning and Analysis (FP&A) roles are headed toward Integrated Planning (also referred to as Integrated Financial Planning or Integrated Business Planning).

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The Future of Spreadsheets in the Office of Finance

It may seem like yesterday to some old timers, or just the distant past to more recent newcomers, but spreadsheets haven't really been around for that long. In fact, for all practical purposes, the first one (Excel) was only introduced in 1985. Since then, Excel itself has evolved, and dozens of new competitors have entered the marketplace.

Originally a simple organizational resource, spreadsheets rapidly evolved into heavy-duty analytical tools now know as Enterprise Performance Management (EPM) solutions – and that evolution has still not stopped. Still, the simple(?) spreadsheet remains a valued tool in the office of finance.

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2016 Brings CFOs in Favor Integrated and Continuous Planning

If you’ve ever traveled over the holidays, you can relate to the disarray created when supply and demand are disrupted by external forces. It's no secret that, in the world of business, there are hundreds of variables that are difficult to predict in advance. Furthermore, many unpredictable variables can significantly impact a company's bottom line.

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The Analytics Plans for CFO and Senior Finance Executives

Those paying attention to the IBM Insight 2015 conference in Las Vegas heard quite a bit about the future of analytics and applied data. For many, though, you may have missed takeaways that didn’t focus on particular solutions, software, or outlooks for years to come. Today, we’re going to touch on a survey conducted by IBM’s Center for Applied Insights that we found particularly interesting and relevant. Specifically, they conducted a survey which focused in on the role of analytics in the way forward-thinking CFOs and Senior Finance Executives are making decisions and improving bottom lines.

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A Financial Knowledge Framework to Drive Profitability

Have you downloaded our white paper, "The Six Levels of Financial Knowledgeby George E. Manners, Jr.? Though the original publication was released back in 2006 in Strategic Finance, the growing focus on Enterprise OptimizationTM makes it particularly relevant nearly 10 years later. It's a must-read for modern financial professionals looking to drive a new level of success within their company.

Within the white paper, Manner's provides a framework that Management Accountants can leverage in order to a) improve financial understanding across their organization and b) drive profitability within their company. Below are the six levels Manners addresses in the white paper. 

Excerpt from "Six Levels of Financial Knowledge"

"The framework recognizes that we’re on a cusp of decades of development coming together in cost measurement and estimation, data management, business process modeling, enterprise resource modeling and planning, mathematical optimization, raw computing power, electronic visualization, application software development, and more.

As they said on The Six Million Dollar Man, 'We can rebuild him. We have the technology.' I term my proposed framework “the levels of financial knowledge.” As you read the description of each level, I expect you to ask, 'Where is my business?' Any reasonably sized business may find itself with elements of more than one level operating simultaneously — depending on the function, location, or business unit. Nevertheless, the framework should be quite prescriptive for evaluation and planning."

Pretty good stuff, right? Access the full white paper by clicking below. 

River Logic Six Levels of Financial Knowledge White Paper

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5 Ways Optimization Enables Financial Maturity

Financial maturity starts by first understanding how your business has performed. In other words, can you produce a P&L, balance sheet and cash flow statements for the business? As the organization matures, the financial knowledge goes deeper.  Financial statements are produced faster and, more importantly, the organization starts to apply cost accounting principles to understand where it's making money (products, customers, regions, channels) and where it isn’t.

Even deeper knowledge is achieved as the organization begins to apply more complex analyses that look at marginal contribution, achieved by tagging variable, direct and indirect costs. You might be familiar with standard costing, activity-based costing and other approaches that attempt to provide additional information.

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Traditional Cost Modeling is Failing. Here's What You Can Do.

Businesses, non-profits, and even government organizations need cost models to support decision making. Without cost and profitability models, financial planning — much less financial optimization — would be almost impossible.

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Your Risk Mitigation Strategies, Perfected

As we well know, there are risks inherent in almost every major business decision. Even if decision-makers opt out of an opportunity because it seems too risky, that decision in itself can still be hazardous. Being too timid could lead to things like new markets not being pursued, new products not being developed or allowing competitors to gain the advantage. Therefore, it's crucial to have a detailed, data-backed strategy in place to measure and reduce risk.

Risk mitigation strategies are designed to eliminate, reduce or control the impact of known risks intrinsic with a specified undertaking, prior to any injury or fiasco. With these strategies in place, risks can be foreseen and dealt with. Fortunately, today’s technology allows businesses to formulate their risk mitigation strategies to the greatest capacity yet. While every organization needs to identify the strategies that are most appropriate for them, here are a few simple strategies to perfect the process.

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