Scenario Planning: Pivoting from Pandemic to Proactive

On a scale of 1-10, how far off was your 2020 budget? Feel free to go as high as 14.

We started off 2020 with a great deal of promise: “the roaring 20’s 2.0” with perfect 2020 Vision. Two months in, the global economy got slapped in the face with the reality of being a global economy. And yet, we persevered. How? By reacting quickly.

Reactionary Scenario Planning

Once the pandemic became real, every company that’s still in business quickly came up with multiple scenarios for how the impacts of coronavirus would affect the lives of their employees, the lives of their customers, and the life of their business. We took the information they had (which back in March 2020 wasn’t very much) and created financial plans. Most people had three scenario plans ranging from “short-term recovery” to “multi-year recession” though we all hoped for the best.

We took those scenario plans and we compiled a set of actions: What we would do if that particular scenario came to be the right one. Short-term recovery? Minimize discretionary spending. Year-long economic hit? Stop our least profitable products and locations. Multi-year recession? Stop everything that isn’t making money, cut costs dramatically, and determine how long until the money runs out.

And then the data started coming in. The economic dip was deeper and faster than 90% of the predictions anyone made, so we revised our scenarios down. The economic recovery after the massive drop was faster than 99% of the predictions, so we revised our scenarios up. COVID-19 turned out to be more deadly, longer-lasting, with cases and deaths coming in multiple waves, so we extended our scenarios around recovery. The vaccines were developed and approved faster than any in history, so we allowed for scenarios with faster resumptions of more traditional spending and economic activity.

2020 was a year of – to coin a new term I hope doesn’t catch on – Reactionary Scenario Planning. The CFO of Coca-Cola called it “Scenario Management.” Yes, we were coming up with possible scenarios, but only in response to events. We were looking ahead by responding to what had already happened. We spent 2020 reacting to the world. Things happened to us; we did not happen to things.

Proactive Scenario Planning

You made it. You’re in 2021. And many companies made it through the year by Scenario Planning. Japheth Jev, CFO at Triumph Power and Gas in Nigeria said in an article on Financial Management News, “We let the management and the board understand that this crisis would definitely affect us, and it was going to affect our customers' businesses and destroy some of our revenue lines. We assessed the risk and ascertained the level of impact that we are going to suffer. And we also introduced scenario planning. To be frank, I never appreciated the importance of scenario planning until the advent of COVID-19.” [It’s a great article, by the way, and you should go to https://www.fm-magazine.com/news/2020/dec/japheth-jev-managing-cash-during-coronavirus-pandemic.html and read some of Jev’s wisdom on crisis planning.]

But now 2020 is over (and no offense, 2020, but good riddance). We’re planning our scenarios for 2021, and we need to pivot from being backward-looking about potential scenarios to being proactive about the scenarios we want to make happen. Take a pause, look ahead and say, “now that the end is in sight, what are the most plausible scenarios for 2021 to 2025.” It might be “Global Expansion” or “Delayed Expansion” or “Let’s Definitely Not Expand Ever.” It could be anything from “our new products launched well in 2021” to “well, that didn’t work.”

On that note, you probably should throw in a worst-case scenario, because in the words of a great Cylon prophet, “All this has happened before, and all of it will happen again.” There will be another catastrophic event, so take the time now to plan for how you’ll respond to it, so you’re not reacting in the moment.

You will find that there are too many possible scenarios for you to plan for, so group them together into broad categories that cover the 3-5 most likely general cases. Expand them – drive them off KPI’s, so they’re easy to revise – into full financial scenario plans. Then take those plans and come up with a set of actions to prepare for those scenarios and how to respond to those scenarios if it turns out to be reality.

Most importantly, make sure those scenario plans are circulated widely. If some of the plans are dire – otherwise known as the “start updating your resumes” scenarios – make sure everyone knows what to do to avoid those scenarios.

Make 2021 the year where things don’t happen to you; you go out and happen to things.

Next Steps in Making the Pivot

Each year, I conduct a global survey of Business Analytics. Last year, I asked over 250 companies how they were doing in the world of reporting, analysis, planning, and consolidation.  If you want to see where you should be planning before it happens and you find yourself reacting to it, I’m unveiling the results on a webcast the last Wednesday of January. You’ll learn how your Analytics & EPM (Enterprise Performance Management) stacks up against the rest of the world so you can get there before everyone else. To register, go to:

http://epm.bi/webcasts

If you have any questions, ask them in the comments or tweet them to me @ERoske.

I gave up my cell phone & laptop for the weekend: This is what I learned

It was time for a technology detox. When I left work on Good Friday, I left my laptop at the office. I got home at 3PM and put my mobile phone on a charger that I wouldn't see until Monday at 9AM. And my life free of external, involuntary, technological distraction began... along with the stress of being out of touch for the next 3 days. Here's what I learned.

Biggest Lessons

1. It's really stressful at first, but you get over it.
2. All those people you told "if it's an emergency, contact my significant other" will not have any emergencies suitable for contacting your significant other.
3. It will leave you wanting more.

I learned far more about myself and we'll get to that in a second.

Why in the name of God?

Thanks to the cruel "Screen Time" tracking feature of my Apple iPhone, I found that on the average day, I lift up my phone more than 30 times before 11AM every day and then it gets worse from there. In general, I am using my phone 6+ hours per day and many days are a lot worse. I pay more attention to my phone than the people around me: if it's always within arm's reach and I use it for everything. As a CEO, my outward reason for my phone addiction is that I have to be connected: emails and text messages must be dealt with immediately and without my calendar, I might miss a Very Important Meeting. In reality, I am completely addicted to my cell phone and the whole "I have to stay connected" thing is largely rationalization.

But about a week ago, I looked around at the people in my life and realized that we're all addicted: for some of us, it's about communication. Others live in their games. Some people are on Instagram looking at puppies and kittens. Whatever your thing, you're getting it through either your phone or your laptop.

So why take a break? Mostly to find out 1) if I could make it for 42 hours; and 2) what I could learn from the experience. I settled on Easter weekend (April 19-22).

Things I thought I couldn't live without

Texting. According the aforementioned Evil Screen Time, I knew that I spent 1.5 hours a day on text messaging. To be clear, I'm not a tween: my company uses text messaging more than any other communication vehicle, it's how I stay in contact with friends (who has time for phone calls?), and it's about the only way my kids will talk to me.

Email. While texting is great for short communications and quick back-and-forths, I get around 200 non-spam emails on the average day and about 50 on the average weekend. When you have something longer to say or it's not urgent, email is the way to go.

Navigation. I have long since forgotten how to drive without the little blue dot directing me. There are about four places I felt I could find on my own (work, home, airport, grocery store), but I was sure that I would be lost without Google Maps or Waze.

Games. I am level 40 on Pokemon Go (humble brag) and I have played it every day since July 2016. It's literally the only game on my phone, but I have to keep my daily streak going lest... I don't know, actually, but the stress of missing out on my 7-day rewards was seriously getting to me.

Turns out, I didn't miss Pokemon Go, I'm actually a decent driver without a phone (it's like falling off a bike: you never forget how), and if you're off email, you never know what you're missing. I did miss texting, but not in the way I thought I would. So what did I actually miss?

Things I actually missed

Bitmoji. I genuinely missed sending cute pictures around to my friends of me as the Easter Bunny and receiving their pictures dressed up inside Easter eggs. I kept wanting to sneak peeks at my wife's phone to see if she was getting anything cute, though I did manage to resist.

Information. I had forgotten the days when questions didn't have answers. What's the address of Academy Sports? I didn't know, so I just had to drive in the general area where I thought it was. What time does Salata open? No idea, so I drove there and got to wander outside for a bit until they opened for the day (fun fact: stores still post actual opening/closing hours on their front doors!). What time is the movie Little playing at the AMC Grapevine Mills 30? Who won the Texas Rangers game (when in doubt, assume it's the team they're playing against)? Who is the actor that plays that one character in that movie, oh, come on, you know who I'm talking about, that guy, let me just look it up for you, oh, damn, I can't until Monday, FML?

Calendar. I worried all weekend about my schedule for the upcoming week: when was my first appointment on Monday, what did I have scheduled for after work, was there anything I should be preparing for, when was I leaving town next, where was I supposed to be for Memorial Day weekend? It went on-and-on, and it turns out that none of it matters.

Photos. I didn't realize how many photos I take of the world around me, until I couldn't take any photos at all. I had to use a long-forgotten mental trick called "memory." It made me pay a lot more attention to the world around me, and I genuinely remember more of how I experienced the weekend than if I had been trying to catalog everything through pictures. I'm sure photos would have made this blog more appealing, but I'm doing all this from memory, so all we have are words.

Connection. I wanted to know what my friends and family were doing and to let them know I was thinking of them. Without technology, this is almost impossible nowadays. I had to resort to seeing them in-person: I met a couple of them at a restaurant and we got together with another friend for cycling, a movie, and Game of Thrones. But it turns out that those friends - the ones I spent time with in-person - I felt more deeply connected to than before the weekend started. Texting is about surface-level connecting, but facetime (note that this is different than FaceTime) is about bonding.

What changed over the weekend?

For one, I spent a lot more time outside. I played frisbee, went on a fourteen-mile bike ride, worked out at the gym, walked around some, went to the mall, saw a movie, and in general, I actually experienced more of the world than I normally do. I also didn't trip over a curb once, because unlike normal, I was looking up the whole time.

I read more instead of looking at my phone each night to fall asleep. I made it 100 pages into a book that I've been meaning to read for a year now. And in the morning I didn't reach for my phone on my bedside table either. I tend to forget how immersed you can get in a book when you don't have notifications popping up constantly telling you what you should be doing instead of reading in peace.

I spent a lot of time with my wife this weekend to the point that she was probably sick of me by Sunday night, but we spent real time with each other without any technological distractions. I finally gave her an Edward Break last night by heading off to take a long bath while reading more of my book (Stealing Snow, if you're curious). She fell asleep and I stayed up reading until midnight.

Any lasting effects?

I thought I would be longing for my phone and my laptop (particularly text and emails) at exactly 9AM this morning. I waited until 9AM and opened up my laptop to see what appointment I had at 9AM. It turns out no one needs me - or loves me? - until 10:30AM, so I opened up a browser window to write my first blog entry in many, many months. My cell phone is still face down, and as of 10AM, I still have no idea who texted or emailed me all weekend. I'm blissfully writing away, and I have to admit, I'm not looking forward to going back to my constantly-connected world.

Will giving up your technology addiction for a weekend give you some sort of mystical clarity, a purity of soul that let's you know how the Dalai Lama must feel when he's between text messages? No, but it will help you find out just how addicted you are, and how strong your willpower is. It'll help you understand what you're missing when you're disconnected, and if you're like me, you'll find that in some ways, you actually like it.

Now will I ever do this again? I'll let you know after I log into my email, read all my texts, and see just how bad the world got over the weekend. Until then, I'm blissfully unaware.

Why Cloud? The reason changed in 2017…twice

In 2017, the predominant reason companies considered moving to the Cloud changed multiple times. While the “how” tends to shift frequently, seeing the “why” fundamentally shift twice in one year was fascinating (though not quite as fascinating as yesterday when LinkedIn suggested I might know both Jessica Alba and Ashton Kutcher).

The Cloud will save us money

2017 started off with companies moving to the Cloud to save money. This makes sense in a theoretical sense: you pay-as-you-go for your software instead of all up-front, you don’t have to buy your own servers, there’s no need to do installations, and there’s no IT staff needed to handle the frequent maintenance that an on-premises solution requires.

But while that’s 100% correct in the abstract (any new company would buy Cloud first before ever considering an on-prem product), there’s a sunk cost issue with existing solutions: companies already paid for all their software (minus the annual “support maintenance”), they already bought their servers, someone already installed the software, and there’s an existing staff dedicated to maintaining servers that has plenty of other things they can be doing once they stop dealing with the drudgery of daily maintenance activities. While there’s money to be saved with new solutions, and there’s definitely money to be saved in the long-run on converting existing implementations to the Cloud, the short-term savings are trumped by the sunk cost fallacy.

As companies started moving en masse to the Cloud, a compelling new motivation began appearing in Spring of 2017.

Let’s make our server someone else’s problem

Companies began realizing that servers and data centers are a huge headache: a distraction from their core competencies. Trying to make sure servers stay up and running whenever we need to access them shouldn’t be any more of a focus than starting our car: the engine should always work and if it doesn’t, someone far more qualified than we are should fix it.

All of a sudden, people were going to the Cloud so they never had to deal with their servers again: uptime was assumed, patches were someone else’s problem, and backups just happened. And as this happened, the Cloud became more like Google: when was the last time you pondered where Google’s servers are located or when the last time was that Google did a backup? And the reason you don’t invest brain power into Google maintenance thought experiments is that it’s Google’s problem. While the Cloud may be causing someone else sleepless nights keeping those servers up and running, that someone is not making their problem your problem.

So, we spent the next several months of “The Year of the Cloud” (trademark pending) going to the Cloud so we never had to deal with our servers again.

Power to the People!

In late 2017, organizations going to the Cloud began to notice something weird: business people were starting to own their own systems and access their data directly. A noble aim long desired by users everywhere, this has heretofore been impossible because on-premises systems take a lot of effort to administrate. It took consultants or IT personnel to build the systems, modify them, and in the end, those same people controlled access to the systems.

The Cloud changed all that: with a new focus on end users and self-service, the power to change things (add an account, build a new report, modify a form, create new analysis) moved to the people who are the first to know when a change needs to be met. At first, I thought this self-service paradigm would increase the workload on the business, but it turns out that they were having to do all the requesting of the changes anyway and quickly making those changes themselves was far faster. Why should I have to make a request to see my own data rather than just go wander through it on my own (preferably on a mobile device)?

And so we ended 2017 with a new drive – a new “why” – of the Cloud. Give the power to the people. The other reasons aren’t lost: they just took a backseat to the new user-first world of the Cloud. Now when someone asks me “why should our company move to the Cloud?”, I tell them “because it gives your business people the power to make better business decisions faster.”

At least, that’s my answer at the start of 2018.

What’s the next shift?

Each year, I conduct a global survey of Business Analytics. Last year, I asked over 250 companies how they were doing in the world of reporting, analysis, planning, and consolidation.  If you want to see where the next shift is coming from before it happens, I’m unveiling the results of this year’s survey on a webcast January 31, 2018, at 2PM Eastern, where you’ll learn how your BI & EPM (Business Intelligence & Enterprise Performance Management) stacks up against the rest of the world. To register, go to:

http://EPM.BI/soba18er

If you have any questions, ask them in the comments or tweet them to me @ERoske.

The Biggest Change to Reporting & Analysis in 2018 Won’t Be the Cloud

Screenshot from https://www.oracle.com/solutions/business-analytics/day-by-day.html

Companies spent most of 2017 either preparing their journey to the Cloud, getting started on moving their applications to the Cloud, or hoping the whole Cloud thing would go away if we just ignored it long enough (like my late fees at Blockbuster). But in the end, the Cloud isn’t revolutionary: the Cloud just means someone else is managing your server for you. While it’s nice that your servers are now someone else’s problem, there is an actual revolution happening in reporting & analysis and it’s a technology that’s been around for decades.

The Future of Reporting & Analysis Can Also Take Selfies

Up to this point, mobile has been an afterthought in the world of reporting & analysis: we design for a laptop first and if something ends up mobile-enabled, that’s a nice-to-have. The commonly held belief is that mobile devices (phones, tablets) are too small of a footprint to show formatted reports or intricate dashboards. That belief is correct in the same way that Microsoft Outlook is way too complex of an application to make reading emails on a mobile device practical… except that most emails in the world are now read on a mobile device. They’re just not using Outlook. We had to rethink of a smaller, faster, easier, more intuitive (sorry, Microsoft) way of consuming information to take email mobile.

Reporting & analysis will also hit that tipping point in 2018 where we ask ourselves simply “what questions do I need answered to make better business decisions faster?” and then our phones will give us exactly that without all the detail a typical report or dashboard provides. Will mobile analytics kill off desktop applications? No more than the desktop killed off paper reports. They all have their place: paper reports are good for quickly looking at a large amount of formatted information, desktops will be good for details (Excel will live on for the foreseeable future), and mobile will take its rightful place as the dominant form of information consumption.

Forget the Past and Pay Attention to the Present

The greatest thing about mobile is that everyone has their phone less than six feet from them at all times [you just glanced over at yours to see if I’m right]. But would you ever look at your phone if your screen took a month to update? Traditional reports are very backwards-looking. Your typical Income Statement, for instance, tells you how you spent the last year, it sometimes tells you about the upcoming forecast, but it rarely tells you, “am I making money at this moment?” Just like the dashboard of a car would be awfully useless if it gave you last month’s average gas tank reading – hey, I was 75% full in December! – mobile reports won’t be for looking at historically dated information. Instead, we’ll look to mobile to give us just the information we need to take physical actions now.

But Why is 2018 the Year of Mobile Analytics?

Quite simply, we didn’t have the technology to support our decisions until now. While we could take reports or dashboards and interact with them on mobile devices, we don’t want to actually perform analytics on our phones. We want the computers doing the analysis for us. While we’ve had data mining for years, it was relegated to high-priced data scientists or not-so-highly-paid analysts.

We now have artificial intelligence that can look through our data 24/7 and with no guidance from us, determine what drivers correlate with which results. Machine learning can then determine which information it delivers do we truly find useful. And so we don’t have to dig through all the results to find out what the system is trying to tell us, the mobile analytics apps in 2018 will convert complex information into natural language. It will simply tell us in plain English (or your language of choice), “I looked through all your information and here are the things you need to be aware of right now.”

While that may seem like distant promises to many people, it’s here now. At Oracle’s OpenWorld 2017 conference, there was an amazing demonstration of everything I mentioned in the last paragraph. The audience was even more amazed when told that all that functionality would be in Oracle Analytics Cloud before OpenWorld 2018. I’m sure the employees of Microsoft, Tableau, QlikView, and others are either busy working on their own technological magic or they’re busier working on their resumés.

Am I Ready for the Future?

Start finding out at EPM.BI/Survey. Each year, I conduct a global survey of Business Analytics. Last year, I asked over 250 companies how they were doing in the world of reporting, analysis, planning, and consolidation.  To participate in this year’s survey, go to EPM.BI/Survey and spend 15 minutes answering questions about your State of Business Analytics that you maybe haven’t thought of in years. In exchange for filling in the survey, you’ll be invited to a webcast on January 31, 2018, at 1PM Eastern, where you’ll learn how your BI & EPM (Business Intelligence & Enterprise Performance Management) stacks up against the rest of the world.

If you have any questions, ask them in the comments or tweet them to me @ERoske.

Top 5 Quotes from Oracle’s 2017 Modern Finance Experience

Three days of Oracle’s Modern Finance Experience set my personal new record for “Most Consecutive Days Wearing a Suit.” Surrounded by finance professionals (mostly CFOs, VPs of FP&A, and people who make money from Finance execs), I came prepared to learn nothing… yet found myself quoting the content for days to come.

The event featured top notch speakers on cutting edge concepts: the opening keynote with Mark Hurd, a panel on the changing world of finance with Matt Bradley & Rondy Ng, Hari Sankar on Hybrid in the world of Oracle EPM, and even one of my competitors (more on that in a second).

For those of you who couldn’t be there (or didn’t want to pay a lot of money to dress up for three days), I thought I’d share my top five quotes as best as I could transcribe them.

“IT currently spends 80% of its budget on maintenance. Boards are demanding increased security, compliance, and regulatory investment. All these new investments come from the innovation budget, not maintenance.”

-          Mark Hurd, Oracle, Co-Chief Executive Officer

Mark Hurd was pulling double duty: he gave the opening keynote at Oracle HCM World (held at a nearby hotel) and then bolted over to Oracle Modern Finance Experience to deliver our keynote. He primarily talked Oracle strategy for the next few years which – to badly paraphrase The Graduate – can be summed up in one word: Cloud.

He gave a compelling argument for why the Cloud is right for Oracle and businesses (though server vendors and hosting providers should be terrified). Now let me be clear: much of this conference was focused around the Cloud, so many of these quotes will be too, but what I liked about Mark’s presentation was it gave clear, concise, and practically irrefutable arguments of the benefits of the Cloud.

The reason I liked the quote above is it answers the concerns from all those IT departments: what happens to my job if I don’t spend 80% of our resources on maintaining existing systems? You’ll get to spend your time on actually improving systems. Increased innovation, greater security, better compliance … the things you’ve been wanting to get to but never have time or budget to address.

“The focus is not on adding lots of new features to on-premises applications. Our priority is less on adding to the functional richness and more on simplifying the process of doing an upgrade.”

-          Hari Sankar, Oracle, GVP of Product Management

I went to a session on the hybrid world of Oracle EPM. I knew Hari would be introducing a customer who had both on-premises Hyperion applications and Cloud applications. What I didn’t know is that he would be addressing the future of Oracle EPM on-premises. As most of you know, the current version for the on-premises Oracle EPM products is 11.1.2.4.x. What many of you do not know is that Oracle has taken future major versions (11.1.2.5 and 12c) of those products off the roadmap.

Hari spoke surprisingly directly to the audience about why Oracle is not abandoning EPM on-prem, but why they will not be pushing the Cloud versions and all their cool new functionality back down to the historical user base. To sum up his eight+ minute monologue, the user base is not requesting new functionality. They want simplicity and an easy path to transition to the Cloud eventually, and that’s why Oracle will be focusing on PSUs (Patch Set Updates) for the EPM products and not on “functional richness.”

Or to put it another way: Hyperion Planning and other Hyperion product users who want impressive new features? Go to the Cloud because they’re probably never coming to on-premises. To quote Hari once more, “create a 1-3 year roadmap for moving to a Cloud environment” or find your applications increasingly obsolete.

 “Hackers are in your network: they’re just waiting to pull the trigger.”

-          Rondy Ng, Oracle, SVP of Applications Development

There was an entertaining Oracle panel led by Jeff Jacoby (Master Principal Sales Consultant and a really nice guy no matter what his family says) that included Rondy Ng (he’s over ERP development), Matt Bradley (he’s over EPM development), and Michael Gobbo (also a lofty Master Principal Sales Consultant). While I expected to be entertained (and Gobbo’s integrated ERP/HCM/EPM demo was one for the ages), I didn’t expect them to tackle the key question on everyone’s mind: what about security in the Cloud?

Mark Hurd did address this in his keynote and he gave a fun fact: if someone finds a security flaw in Oracle’s software on a Tuesday, Oracle will patch in by Wednesday, and it will take an average of 18 months until that security patch gets installed in the majority of their client base. Rondy addressed it even more directly: if you think hackers haven’t infiltrated your network, you’re sticking your head in the sand.

Without going into all of Rondy’s points, his basic argument was that Oracle is better at running a data center than any of their customers out there. He pointed out that Oracle now has 90 data centers around the world and that security overrides everything else they do. He also said, “security is in our DNA” which is almost the exact opposite of “Danger is my middle name,” but while Rondy’s line won’t be getting him any dates, it should make the customer base feel a lot safer about letting Oracle host their Cloud applications.

 “Cloud is when not if.”

-          David Axson, Accenture, Managing Director

I have to admit, I have developed a man crush on one of my competitors. I wrote down more quotes from him than from every other speaker at the event put together. His take on the future of Finance and Planning so closely paralleled my thoughts that I almost felt like he had read the State of Business Analytics white paper we wrote. For instance, in that white paper, we wrote about Analysis Inversion: that the responsibility for analyzing the report should be in the hands of the provider of the report, not the receiver of the report. David Axson put it this way: “The reporting and analysis is only as good as the business decisions made from it. In finance, your job starts when you deliver the report and analysis. Most people think that's when it ends.”

The reason I picked the quote above is because it really sums up the whole theme of the conference: the Cloud is not doing battle with on-premises. The Cloud did that battle, won with a single sucker punch while on-prem was thinking it had it made, and Cloud currently dancing on the still unconscious body of on-prem who right now is having a bad nightmare involving losing its Blackberry while walking from Blockbuster to RadioShack.

David is right: the Cloud is coming to every company and the only question is when you’ll start that journey.

“Change and Certainty are the new normal. Combat with agility.”

-          Rod Johnson, Oracle, SVP North America ERP, EPM, SCM Enterprise Business

So, what can we do about all these changes coming to Finance? And for that matter, all the changes coming to every facet of every industry in every country on Earth? Rod Johnson (which he assures me is his not his “stage” name) said it best: don’t fight the change but rather embrace it and make sure you can change faster than everyone else.

"Change comes to those who wait, but it’s the ones bringing the change who are in control."

-          Edward Roske, interRel, CEO

To read more about some of those disruptive changes coming to the world of Finance, download the white paper I mentioned above.

7 Signs Your EPM is Lagging Behind Your Competition

Regardless of industry, regardless of size, regardless of duration, all companies have similar issues in their financial analysis, planning, and consolidation areas. From building budgets to financial reporting, how can CFOs, VPs of Finance, Directors of FP&A and Controllers tell if their FP&A teams are falling behind their competitors? Here are seven signs that your Enterprise Performance Management (EPM) environments are stuck in the last decade:

1. Strategy is planned verbally or in spreadsheets. While the majority of strategic CFO’s agree that Finance should be looking forward and not backward, most strat planning is done in Excel or worse, out loud in various meetings. There is no modeling unless someone comes up with a bunch of linked spreadsheet formulas. Strategies are agreed to in conference rooms and conveyed at a high-level via email (or they aren’t communicated at all). Strategies are evaluated by whomever has the best anecdote: “well, the last time that happened, we did this…” The only thing worse than not having a solution for strategic planning is not doing strategic planning at all. Speaking of spreadsheets…
2. Excel is the key enabling technology in your FP&A department. One sure way to tell if your EPM function is falling behind is to ask “what is the single most important tool your department uses when running reports? Performing analysis? Coming up with a strategic plan? Preparing the budget? Modeling business changes?” If the answer to four-out-of-five of those is “Microsoft Excel”, ask yourself if that was by design or if people just used Excel because they didn’t have a better system. Excel is a wonderful tool (I open it every morning and don’t close it until I leave), but it was meant to be a way to look at grids of data. It was not meant to store business logic and it was never meant to be a database. Force your FP&A group to do everything with Excel and expect to be waiting for every answer… and then praying everyone got their formulas right when you make business decisions based on those answers.
3. There is only one version of the budget. No one really thinks that there’s only one way that the year will end up, but most companies insist on a single version of a budget (and not even a range, but a specific number). Not only are EPM Laggards (companies with EPM trailing behind their peer groups) not planning multiple scenarios, they’re insisting that the whole company come up with a single number and then stick to it no matter what external factors are at play. Ron Dimon refers to scenario plans as “ready at hand plans” waiting to be used once we see how our strategic initiatives are enacted. EPM Laggards not only don’t have additional plans ready, they insist on holding everyone in the organization accountable to one single number, outside world be damned.
4. Budgets favor precision over timeliness. Your competition realizes that a forecast that’s 95% accurate delivered today is more helpful than a budget that was 98% accurate 6 months ago. Yet EPM Laggards spend months coming up with a budget that’s precise to the dollar and then updating it periodically at a high level. It’s amazing how often FP&A groups end up explaining away budget vs. actual discrepancies by saying “the budget was accurate at the start of the year, but then things happened.” Budgets should be reforecasted continuously whenever anything material changes. Think about it: if you had one mapping app that gave you an estimate of your arrival time to the 1/100^th of a second at the time you departed and another mapping app that constantly refined your arrival time as you drove, which one would you choose?
5. No one takes actions on the reports. Edward’s Rule of Reporting: every report should either lead to a better question or a physical action. If your department is producing a report that doesn’t lead someone to ask a bigger, better, bolder question and doesn’t lead someone to take a physical action, change the report. Or stop producing the report entirely. EPM Laggards spend an inordinate amount of time collecting data and generating reports that don’t lead to any change in behavior. EPM Leaders periodically stop and ask themselves “if I arrived today, is this what I would build?” Half the time, the answer is “no,” and the other half the time, the answer is “if I arrived today, I actually wouldn’t build this report at all.”
6. Most time is spent looking backwards. Imagine you’re driving a car. Put your hands on the wheel and look around. Notice that most of your visual space is the front windshield which shows you what’s coming up ahead of you. Some of what you see is taken up by the dashboard so you can get a real-time idea of where you are right now. And if you glance up, there’s a small rear-view mirror that tells you what’s behind you. A combination of all three of these (windshield, dashboard, and rearview mirror) gives you some idea of when you should steer right or left, brake, or accelerate. In a perfect EPM world, your time would be divided the same way: most would be spent looking ahead (budgeting and forecasting), some time would be spent glancing down to determine where you are at the moment, and very little would be spent looking backwards since, let’s face it, the past is really difficult to change. In your car, you’d only look at the mirror if you were changing lanes or you were worried about being hit from behind, and business is similar yet most EPM Laggards drive their cars by looking backwards.
7. Labor is devoted to collecting & reporting and not planning & analyzing. If you spend all of your time gathering data, reconciling data, and reporting on data, you’re answering the question “what happened?” Your competition is spending their time analyzing (“why did this happen?”) and then planning to take action (“what should I do next?”). There is a finite amount of time in the world and sadly, that holds true in our FP&A departments too. If your EPM system is focused on collecting, consolidating, & reporting and your competition has their EPM focused on analyzing, modeling, & planning, who do you think will win in the long run?

What You Can Do

If you look at those seven top signs you’re lagging in your EPM functions and wonder how to improve, the first step is to stop building anything new. While this seems counterintuitive, if you take a tactical approach to solving any one area, you’re going to put in place a single point solution that will need to be thrown away or redone as you get closer to your overall vision for EPM. So what’s step 1? Have an EPM vision. Ask yourself where you want your company to be in three years. What do you want out of consolidation, reporting, analysis, modeling, and planning and how will all of those functions be integrated?

You are not alone. I have seen hundreds of FP&A departments in my time struggle with having a vision for just one area let alone a long-range vision. Even when leadership has a vision, it quite often focuses on system improvements (we’re not sure what to do, so let’s throw technology at it!) rather than try to improve processes too. Thankfully, there is hope and as my good friends at G.I. Joe always say, knowing is half the battle.

More Information

If you have any questions, ask them in the comments or tweet them to me @ERoske.

Learn About Hyperion & Oracle BI... 5 Minutes at a Time

Since early 2015, we've been trying to figure out how to help educate more people around the world on Oracle BI and Oracle EPM. Back in 2006, interRel launched a webcast series that started out once every two weeks and then rapidly progressed to 2-3 times per week. We presented over 125 webcasts last year to 5,000+ people from our customers, prospective customers, Oracle employees, and our competitors.

In 2007, we launched our first book and in the last 8 years, we've released over 10 books on Essbase, Planning, Smart View, Essbase Studio, and more. (We even wrote a few books we didn't get to publish on Financial Reporting and the dearly departed Web Analysis.) In 2009, we started doing free day-long, multi-track conferences across North America and participating in OTN tours around the world. We've also been trying to speak at as many user groups and conferences as we can possibly fit in. Side note, if you haven't signed up for Kscope16 yet, it's the greatest conference ever: go to kscope16.com and register (make sure you use code IRC at registration to take $100 off each person's costs).

We've been trying to innovate our education offerings since then to make sure there were as many happy Hyperion, OBIEE, and Essbase customers around the world as possible. Since we started webcasts, books, and free training days, others have started doing them too which is awesome in that it shares the Oracle Business Analytics message with even more people.

The problem is that the time we have for learning and the way we learn has changed. We can no longer take the time to sit and read an entire book. We can't schedule an hour a week at a specific time to watch an hour webcast when we might only be interested in a few minutes of the content. We can't always take days out of our lives to attend conferences no matter how good they are.  So in June 2015 at Kscope16, we launched the next evolution in training (epm.bi/videos):

#PlayItForward is our attempt to make it easier for people to learn by making it into a series of free videos.  Each one focuses on a single topic. Here's one I did that attempts to explain What Is Big Data? in under 12 minutes:

As you can see from the video, the goal is to teach you a specific topic with marketing kept to an absolute minimum (notice that there's not a single slide in there explaining what interRel is). We figure if we remove the marketing, people will not only be more likely to watch the videos but share them as well (competitors: please feel free to watch, learn, and share too). We wanted to get to the point and not teach multiple things in each video.

Various people from interRel have recorded videos in several different categories including What's New (new features in the new versions of various products), What Is? (introductions to various products), Tips & Tricks, deep-dive series (topics that take a few videos to cover completely), random things we think are interesting, and my personal pet project, the Essbase Technical Reference.

Essbase Technical Reference on Video

Yes, I'm trying to convert the Essbase Technical Reference into current, easy-to-use videos. This is a labor of love (there are hundreds of videos to be made on just Essbase calc functions alone) and I needed to start somewhere. For the most part, I'm focusing on Essbase Calc Script functions and commands first, because that's where I get the most questions (and where some of the examples in the TechRef are especially horrendous). I've done a few Essbase.CFG settings that are relevant to calculations and a few others I just find interesting.  I'm not the only one at interRel doing them, because if we waited for me to finish, well, we'd never finish. The good news is that there are lots of people at interRel who learned things and want to pass them on.

I started by doing the big ones (like CALC DIM and AGG) but then decided to tackle a specific function category: the @IS... boolean functions. I have one more of those to go and then I'm not sure what I'm tackling next. For the full ever-increasing list, go to http://bit.ly/EssTechRef, but here's the list as of this posting: 

• @ISACCTYPE
• @ISANCEST and @ISIANCEST
• @ISCHILD and @ISICHILD
• @ISDESC and @ISIDESC
• @ISGEN
• @ISLEV
• @ISMBR
• @ISMBRUDA
• @ISPARENT
• @ISSAMEGEN
• @ISSAMELEV
• @ISSIBLING and @ISISIBLING
• @ISUDA
• @RETURN
• @SUBSTRING
• AGG
• CALC ALL
• CALC DIM
• FIX and ENDFIX
• SET CalcParallel
• SET CalcTaskDims
• SET UpdateCalc
• SSPROCROWLIMIT

What's Next

To see all the videos we have at the moment, go to epm.bi/videos. I'm looking for advice on which TechRef videos I should record next. I'm trying to do a lot more calculation functions and Essbase.CFG settings before I move on to things like MDX functions and MaxL commands, but others may take up that mantle. If you have functions you'd like to see a video on, shoot an email over to epm.bi/videos, click on the discussion tab, and make a suggestion or two. If you like the videos and find them helpful (or you have suggestions on how to make them more helpful), please feel free to comment too.

I think I'm going to go start working on my video on FIXPARALLEL.

Oracle Exalytics X4-4 - Bigger, Better, Stronger

X4-4 - Same price as the X3-4 but with more power

The big announcement about it is today at OpenWorld (it would be awesome if they mentioned it during the Intel keynote tonight), but the Exalytics X4-4 is actually available now.  It's the same price as the X3-4 ($175,000 at list not including software, maintenance, tax, title, license, yada yada).  This does mean the X3 is - effective immediately - no longer available, but then again, since the new one is the same price, I'm not sure why anyone would want the older one.  No word yet on if you can upgrade an X3 to an X4, but since they did offer an upgrade kit from X2 to X3 (though I never heard of anyone buying it), I'm guessing there will be one for those wanting to make an X3 into an X4.

X4-4 Specs

The main improvement over the X3 is the number of cores: it's still 4 Intel chips, but those chips all now have 15 cores on them, meaning the X4 has 60 cores compared to the X3's 40 cores.  Here are the important details:

• 4 Intel Xeon E7-8895v2 processors running at 2.8 - 3.6 GHz
• 8 - 60 cores (capacity on demand, more on this in a second)
• 2 TB of RAM
• 2.4 TB of PCI flash
• 7.2 TB of hard disk running at 10K RPMs (not that fast these days)
• 2 Infiniband ports running at 40 Gb/s
• 4 Ethernet ports running at up to 10 Gb/s

Cool Thing 1: Variable Speed & Cores

You probably heard about this last July.  Oracle worked with Intel to design a line of their Xeon E7-889x chips specifically for Oracle.  What we didn't realize until we saw it show up on the X4 spec sheet was that the chips were going in the Exalytics X4.  Simply put, on the fly, Exalytics can vary how many cores it uses and when it's fewer cores, the speed goes up.  If it's running 15 cores per chip, Intel sets the speed to 2.8 GHz.  If it's only using 2 cores per chip the speed goes all the way to 3.6 GHz (a GHz is one billion clock ticks per second).

Oracle Tours Africa and the Middle East

Happy Father's Day, everyone!  I got up early this morning to write about my recent experience traveling the world on Oracle's behalf.  I got to attend the first annual Oracle Technology Network tour of Africa and the Middle East.  It made 2 stops in North Africa (both in Tunisia), 2 stops in Saudi Arabia, and the final stop was in Dubai, UAE.

Tariq Farooq first mentioned the idea of doing a MENA (Middle East & North Africa) tour to me in Beijing last fall.  He asked if I'd be willing to travel half-way around the world to speak to people in English that primarily spoke French and Arabic, and I - of course - said "yes."  Here's Tariq being interviewed by Lillian Buziak at Collaborate 2014 (audio is a bit difficult to hear):


I had two reasons for wanting to go: I do love educating/evangelizing for Oracle EPM, BI, and Business Analytics.  The possibility of reaching new audiences for the first time was exciting. My other reason for going was that I wanted to experience totally different cultures than I ever have before.  I've spoken on 5 continents (now 6 after this tour and I'm anxiously awaiting the OTN Tour to Antarctica) before and have seen presented everywhere from a women's college in Mumbai that was 95F with no air conditioning in the presentation room to a ballroom in the Philippines that had 3 simultaneous English sessions going on (in one room!) all happily observed by smiling Filipinos.  From China to India to Australia to Germany, I have seen some amazing slices of life, but nothing prepared me for the differences I saw on this tour.

In each of the sections below, I have linked the header to a blog from my new best German friend, Bjoern Rost.  He blogged after every stop and unlike me, he actually understood all the Oracle RDBMS sessions on the tour.  Visit http://portrix-systems.de/blog/author/brost/ to see his entertaining blog posts.  (Warning: though I think Bjoern is hilarious, being German, you may find his posts to be 'not funny.'  German humor is an acquired taste.)

I left for the first stop, Tunisia, on Memorial Day (in the USA), May 26, 2014...

My Friend, Mike Riley, Has Cancer

I found out this summer that one of my best friends - one of the entire Hyperion community's best friends - has cancer. This is his story.

But first, a mea culpa:

In 2008, I Was An Idiot

Back in early 2008, I wrote a blog entry comparing Collaborate, Kaleidoscope, and OpenWorld.  In this entry, I said that Collaborate was the obvious successor to the Hyperion Solutions conference and I wasn't terribly nice to Kaleidoscope.  Here's me answering which of the three conferences I think the Hyperion community should attend (I dare you to hold in the laughter):

Now which one would I attend if I could only go to one?

Collaborate. Without reservation. If I'm going to a conference, it's primarily to learn. As such, content is key.

I actually got asked a very similar question on Network 54's Essbase discussion board just yesterday (apparently, it's a popular question these days). To parrot what I said there, OpenWorld was very, very marketing-oriented. 80% of the fewer than 100 presentations in the Hyperion track were delivered by Oracle (in some cases, with clients/partners as co-speakers). COLLABORATE is supposed to have 100-150 presentations with 100+ of those delivered by clients and partners.

In the interest of full-disclosure, my company, interRel, is paying to be a 4-star partner of COLLABORATE. Why? Because we're hoping that COLLABORATE becomes the successor to the Solutions conference. Solutions was a great opportunity to learn (partying was always secondary) and I refuse to believe it's dead with nothing to take it's mantle. We're investing a great deal of money with the assumption that something has to take the place of Hyperion Solutions conference, and it certainly isn't OpenWorld.

Is OpenWorld completely bad? Absolutely not. In addition to the great bribes, it's a much larger conference than COLLABORATE or ODTUG's Kaleidoscope, so if your thing is networking, by all means, go to OpenWorld. OpenWorld is the best place to get the official Oracle party line on upcoming releases and what not. OpenWorld is also the place to hear better keynotes (well, at least by More Famous People like Larry Ellison, himself). OpenWorld has better parties too. OpenWorld is also in San Francisco which is just a generally cooler town. In short, OpenWorld was very well organized, but since it's being put on by Oracle, it's about them getting out their message to their existing and prospective client base.

So why aren't I recommending Kaleidoscope (since I haven't been to that either)? Size, mostly. Their entire conference will have around 100 presentations, so their Hyperion track will most likely be fewer than 10 presentations. I've been to regional Hyperion User Group meetings that have more than that (well, the one interRel hosted in August of 2007 had 9, but close enough). While Kaleidoscope may one day grow their Hyperion track, it's going to be a long time until they equal the 100-150 presentations that COLLABORATE is supposed to have on Hyperion alone.

If you're only going to one Hyperion-oriented conference this year, register for COLLABORATE. If you've got money in the budget for two conferences, also go to OpenWorld. If you're a developer that finds both COLLABORATE and OpenWorld to be too much high-level fluff, then go to Kaleidoscope.

So, ya, that entry may live in infamy.  [Editor's Note: Find out a way to delete prior blog posts without anyone noticing.]  Notice that of the three conferences, I recommended Kaleidoscope last and dared to say that it would take them a long time until they had 100-150 sessions like Collaborate.  Interestingly, Collaborate peaked that year at 84 Hyperion sessions, and Kaleidoscope is well over 150 Business Analytics sessions, but I'm getting ahead of myself.

In 2008, Mike Riley Luckily Wasn't An Idiot

I had never met Mike Riley, but he commented directly on my blog.  He was gracious even though I was slamming his tiny little conference in New Orleans:

Hyperion users are blessed with many training opportunities. I agree with Edward, the primary reason for going to a conference is to learn, but I disagree that Collaborate is the best place to do that. ODTUG Kaleidoscope, Collaborate, and OpenWorld all have unique offerings. 

It’s true that ODTUG is a smaller conference, however that is by choice. At every ODTUG conference, the majority of the content is by a user, not by Oracle or even another vendor. And even though Collaborate might seem like the better buy because of its scale, for developers and true technologists ODTUG offers a much more targeted and efficient conference experience. Relevant tracks in your experience level are typically consecutive, rather than side-by-side so you don’t miss sessions you want to attend. The networking is also one of the most valuable pieces. The people that come to ODTUG are the doers, so everyone you meet will be a valuable contact in the future.

It’s true, COLLABORATE will have many presentations with a number of those delivered by clients and partners, but what difference does that make? You can’t attend all of them. ODTUG’s Kaleidoscope will have 17 Hyperion sessions that are all technical. 

In the interest of full disclosure, I have been a member of ODTUG for eight years and this is my second year as a board member. What attracted me to ODTUG from the start was the quality of the content delivered, and the networking opportunities. This remains true today.

I won’t censor or disparage any of the other conferences. We are lucky to have so many choices available to us. My personal choice and my highest recommendation goes to Kaleidoscope for all the reasons I mentioned above (and I have attended all three of the above mentioned conferences).

One last thing; New Orleans holds its own against San Francisco or Denver. All of the cities are wonderful, but when it comes to food, fun, and great entertainment there’s nothing like the Big Easy. 

Mike was only in his second year as a board member of ODTUG, but he was willing to put himself out there, so I wrote him an e-mail back.  In that e-mail, dated February 10, 2008, I said that for Kaleidoscope to become a conference that Hyperion users would love, it would require a few key components: keynote(s) by headliner(s), panels of experts, high-quality presentations, a narrow focus that wasn't all things to all people, and a critical mass of attendees.

At the end of the e-mail, I said "If Kaleidoscope becomes that, I'll shout it from the rooftops.  I want to help Kaleidoscope be successful, and I'm willing to invest the time and effort to help out.  Regarding your question below, I would be more than happy to work with Mark [Rittman] and Kent [Graziano] to come up with a workable concept and I think I'm safe in saying that Tim [Tow] would be happy to contribute as well.  For that matter, if you're looking for two people to head up your Hyperion track (and enact some of the suggestions above), Tim and I would be willing (again, I'm speaking on Tim's behalf, but he's one of the most helpful people on planet Hyperion)."

K(aleido)scope

Kaleidoscope 2008 ended up being the best Hyperion conference I ever attended (at the time).  It was a mix of Hyperion Solutions, Arbor Dimensions, and Hyperion Top Gun.  With only 4 months prep time, we had 175 attendees in what then was only an Essbase track.  Though it was only one conference room there in New Orleans, the attendees sat in their seats for most of a week and learned more than many of us had learned in years.

After the conference, Mike and the ODTUG board offered Tim Tow a spot on the ODTUG board (a spot to which he was later elected by the community) to represent the interests of Hyperion.  I founded the ODTUG Hyperion SIG along with several attendees from that Kaleidoscope 2008. I eventually became Hyperion Content Chair for Kaleidoscope and passed my Hyperion SIG presidency on to the awesome Gary Crisci.  In 2010, Mike talked me into being Conference Chair for Kaleidoscope (which I promptly renamed Kscope since I never could handle how "kaleidoscope" violated the whole "i before e" rule).  Or maybe I talked him into it.  Either way, I was Conference Chair for Kscope11 and Kscope12.

During those years, Mike worked closely with the Kscope conference committee in his role as President of ODTUG.  Mike rather good-naturedly ("good-natured" is, I expect, the most commonly used phrase to describe Mike) put up with whatever crazy thing I wanted him to do. In 2011, he was featured during the general session in several reality show parodies (including his final, climactic race with John King to see who got to pick the location for Kscope12).  I decided to up the ante in 2012 by making the entire general session about him in a "Mike Riley, This Is Your Life" hour and we found ourselves laughing not at Mike, but near him.  It included Mike having to dance with the Village Persons (a Village People tribute band) and concluded with Mike stepping down as President of ODTUG...

... to focus his ODTUG time on being the new Conference Chair for Kscope.  Kscope13 returned to New Orleans and Mike did a fabulous job with what I consider to be Hyperion's 5 year anniversary with Kscope.  Mike was preparing Kscope14 when I got a phone call from him.  I expected him to talk over Kscope, ODTUG, or just to say hi, but I'll never forget when Mike told me he had stage 3 rectal cancer.  My father died in 2002 of colorectal cancer, and the thought that one of my best friends was going to face this was terrifying... and I wasn't the one with cancer.

I feel that the Hyperion community was saved by Mike (what would have happened if we had all just given up after Collaborate 2008 was a major letdown?) and now it's time for us to do our part.  Whether you've attended Kscope in the past or just been envious of those of us who have, you know that it's the one place per year that you can meet and learn from some of the greatest minds in the industry.

Mike Helped Us, Let's Help Him

Kscope is now the best conference for Oracle Business Analytics (EPM and BI) in the world, and Mike, I'm shouting it from every rooftop I can find (although I wish when I climbed up there people would stop yelling "Jump!  You have nothing else to live for!").  I tell everyone I know how much I love Kscope, and on behalf of all the help you've given the Hyperion community over the last 5 years, Mike, it's now time for us to help you.

After many weeks of chemo, Mike goes into surgery tomorrow to hopefully have the tumor removed.  Then he has many more weeks of chemo after that. He's a fighter, but getting rid of cancer is expensive, so we've set up a Go Fund Me campaign to help offset his medical bills.  If you love Kscope, there is no one on Earth more responsible for its current state than Mike Riley.  If you love ODTUG, no one has more fundamentally changed the organization in the last millennium than Mike Riley.  If you love Hyperion, no one has done more to save the community than Mike Riley.  

And if after reading this entry, you love Mike for all he's done, go to http://bit.ly/HelpMike and donate generously, because we want Mike to be there at the opening of Kscope14 in Seattle on June 22.  Please share this entry, and even if you can't donate, send Mike an e-mail at mriley@odtug.com letting him know you appreciate everything he's done.