In the financial planning and analytics (FP&A) world, there are plenty of old school systems. By that I mean systems that make it difficult or impossible for decision makers to use real-time data to develop accurate and attainable plans, realistic budgets and risk-weighted forecasts. Cobbled together over years, these time-sapping old school solutions aren’t built for modern business.
While many executives recognize they’re working with an outdated FP&A platform that fails to meet their needs, they don’t always realize how easy it is to trade that old school system for a cloud-based, collaborative solution.
Now you can hear directly from someone who’s done it – and in the process has cut her company’s annual budget cycle in half. On Friday, Dec. 12, Tidemark will host a webinar with Constellation Research that outlines how one business – Shelter Insurance Companies – has undergone this very transformation. Featuring Tina Workman, Shelter’s Vice President of Accounting and Assistant Treasurer, and Hoger Mueller, Vice President and Principal Analyst at Constellation Research, the webinar will offer real-world tips and best practices that are bound to be helpful to any executive looking to more effectively plan and operate in a real-time world. “FP&A Transformation: From Old School to Activity-Based Budgeting and Rolling Forecasts” kicks off at 11 a.m. Pacific Standard Time on Friday and dives deep into Shelter’s transformation from the strictly traditional accounting system they’d been using for years to a cloud-native, mobile-first FP&A platform. Register for the free webinar today.
Interested in a sneak peek at Shelter’s FP&A transformation? Then check out this spotlight from a new Harvard Business Review research report. The free report, “Transformational Journeys: Modern Business Planning,” is the product of extensive independent research and numerous detailed interviews. (We partnered with HBR to help their researchers gain access to a representative sample of companies that have implemented Tidemark to transform their FP&A processes.) Here’s how HBR tells it:
Tina Workman had a mule, but what she wanted was a fast workhorse. Maybe a mustang.
Workman is vice president of corporate accounting and assistant treasurer for Shelter Insurance Companies, a Columbia, Missouri-based company that writes property and casualty and life insurance in 17 states and also operates a reinsurance business. In Workman’s colorful lexicon, her “mule” was her company’s nearly 20-year-old mainframe general ledger accounting system, which hadn’t been updated since 1996. The “mustang” represented the fast and flexible financial systems she envisioned to replace it.
The old system had no drill-down functionality, a limited number of data fields that could be used to dissect information, and no real way to perform analyses. “Because the mainframe couldn’t delve into the data, we had to pull it out using Access and create reports,” Workman says. “It was cumbersome and manually intensive. If someone asked how much policy premium we wrote in one state for the past five years, it was a challenging question to answer. It was very difficult to support good decision-making.”
The system wasn’t too much of a liability in the late 1990s or even the early 2000s, she says, in part because many of the company’s peers were using similar technology. But as time went on it increasingly put Shelter at a competitive disadvantage. “Our industry and our business are just moving much faster now,” she says. “We needed systems that would help us meet the real-time information needs of management. That old system was a ticking time bomb.”
In 2014, Shelter began working with two new cloud-based financial systems, one for general ledger accounting activities and another, from a separate vendor, for financial planning and analysis. The systems, which Workman says are highly compatible, went live in September. She adds that her experience in searching for the right systems said a lot about why her company chose to move its finance operations into the cloud.
“To find our general accounting system, we issued a request for proposals (RFP) and basically solicited all the vendors we knew that were either best of breed for insurance or just had good accounting systems,” Workman explains. “We pared that down to four vendors. Three were offering on-premises solutions and the fourth was a cloud solution. We then held two straight days of demonstrations from each of those four vendors, and it was remarkable how well our employees were able to understand the cloud version versus the others. I think the difference was the cloud system was already built. A lot of the others were not; their salespeople were just telling us we could do this or that. With an SaaS solution you can actually see what you can implement.”
Even though Workman has just begun using her new software systems, she’s optimistic about their capabilities. “In the past, we always started budgeting in July and finished in November,” she said in early September. “Now we’re starting in September and I’ll be presenting the finished product at the December board meeting.” She anticipates shortening the budgeting time frame even more and segueing into activity-based budgeting with rolling 12-month forecasts. She also wants to load industry data into her planning and forecasting system to benchmark Shelter against its peers.
“I have no doubt that we’ll enable better decision-making,” she says. “We will know what we budgeted and how we budgeted it because our system offers so much transparency. Line-of-business managers will be able to dissect their information. Maybe, because they have access for the first time to total costs per vendor, they’ll see that they need to negotiate better pricing or terms from a particular vendor. Or see that a certain agent has lost three policies in a single month, which they can then address. We will have significantly more capability to analyze data and take action on it.”
Download the full HBR report here, and find how you can map out a new-school transformation of your own.