The document discusses rolling forecasts and agile planning. It begins with an overview of the planning maturity curve and different levels of planning from basic budgeting to advanced agile planning. It then discusses a case study of how Pittsburgh Mercy Health System improved their planning process by moving to agile planning using a dedicated software system. The document outlines five key steps to implement rolling forecasts and agile planning: 1) move out of spreadsheets, 2) reduce the level of detail, 3) implement driver-based planning, 4) integrate actuals, and 5) implement scenario analysis.

1. The Planning Maturity Curve
Where Are You?
Where Do You Want to Be?
Ben Lamorte
VP Marketing, Alight Planning
AGILE

2. I want to be in San Diego!
Quick Reminder:
Why Rolling Forecasts
&
Agile Planning?
3-Minute Overview
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3. The Value of Traditional Planning Over Time
But ROI
diminishes
quickly
over time.
VALUE
High ROI at
the early
stages of
planning…
TIME
Source: The Agile Planner Blog
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4. The Value of Agile PlanningTM Over Time
Long-term
VALUE value from
planning
increases
significantly
ROI remains
high in the
early stages
of planning…
TIME
Agile Planning Defined: Impactful planning that addresses the right
business issues at the right time with the right people. Unlike
budgeting, it is a continuous process that adds increasing value over time.
Rolling Forecasts SHOULD ENABLE Agile Planning
AGILE Source: The Agile Planner Blog

5. The Subtle Message
1: Is it EVEN worth it to replace
spreadsheets with a planning
tool?
2: If you already bought software,
was it worth it?
3: Either way, how do we make
planning ADD VALUE?
AGILE

6. The Subtle Message
1: Is it EVEN worth it to replace
spreadsheets with a planning
tool?
2: If you already bought software,
was it worth it?
3: Either way, how do we make
planning ADD VALUE?
AGILE

7. The Subtle Message
1: Is it EVEN worth it to replace
spreadsheets with a planning
tool?
2: If you already bought software,
was it worth it?
3: Either way, how do we make
planning ADD VALUE?
AGILE

8. Rand Heer (He‘s ―Heer‖ In Spirit)
 Business Activities
 CEO, Alight Planning (Planning software)
 Co-Founder, Aspirity (Microsoft BI consulting)
 Founder, FP&A Train (Essbase training)
 Founder, Pillar Corporation
 CFO for 2 public companies
 Rockwell Int‘l, Business Unit CFO and Corporate
 Publications
 Author: The Planning Maturity Curve: Where Are You? Where Do You Want
to Be?
 Author: How Agile is Your Planning: Find out by Measuring the ROI of Your
Planning Software
 Coauthor: “Business Intelligence: Making Better Decisions Faster”.
Published by Microsoft Press.
 Education
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 MBA degree Harvard Business School

9. Ben Lamorte (He‘s a Talker)
 Business Activities
 VP Marketing, Alight Planning
 VP Business Development, Alight Planning
 Principal, Decision Consulting (Adobe, Kaiser)
 Manager, Business Intelligence, planetrx.com
 Management Consultant, APM/CSC Healthcare
 Editor of “The Agile Planner” Blog
 Yes! Planning can be a Positive Experience
 Why Financial Reporting Software Delivers No Value?
 The Value of Agile Planning Over Time
 Driver Based Planning: How is it Defined?
 Education
 MS Management Science & Engineering, Stanford University
 BS Mechanical Engineering, UC Davis
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10. Day 1 Agenda: Take a step back!
 The Planning Maturity Curve
 Level One: Seat of the Pants
 Level Two: Budgeting
 Level Three: Reporting
 Level Four: Forecasting
 Level Five: Agile Planning
 Case Study in Agile Planning: Pittsburgh Mercy
 5 Steps to Rolling Forecasts & Agile Planning
 Out of Excel
 Level of Detail
 Driver-Based Planning
 Integrating Actuals
 Scenario Analysis
 Agile Assessment + Free ASMI Event Winner?
 Cocktails
 Day 2 Before Lunch: Best Practices for Rolling Forecasts Demo
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11. Stuff for After this Presentation -- Slides Coming in
Email and posted to SlideShare
 Follow up with Alight
 BLamorte@AlightPlanning.com
 Telephone: (415) 456-8528
 Join us! The Agile Planner Blog
 Blog.alightplanning.com
 Webinar Resources
 Transforming Planning at Pittsburgh Mercy
 www.Alightplanning.com/Webinars/PM/Video.html
 Application Requirements for Rolling Forecasts
 www.AlightPlanning.com/Workshop/Requirements-for-Rolling-Forecasts/Video.html
 FOCUS Podcast Featuring Sid Ghatak & Ben Lamorte
 http://www.focus.com/roundtables/avoiding-business-performance-
mangement-software-failure-4-t/
 6% is not enough! The Case for Driver-Based Planning in 2012 with
Rob Kugel, Ventana Research and John Miller, Arkonas moderated by
Ben Lamorte
AGILE

12. Business Value from Planning
Insights Actionable Financially-
Understanding things Knowledge Sound Decisions
we didn‘t see before
Understanding and Scenario analysis gives us
acting upon the financial impact of choices
operational drivers
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13. KEY POINT: TYPE 1 & TYPE 2 Benefits
Effort
Type 2: Introduce New
Forecasting Processes to Add Value
Reporting
Budgeting Type 1: Streamline
Existing Processes
Reduce Effort
Business Value
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14. Type 1 Benefits of Planning System
 Finance
 No more consolidation errors; formulas don‘t break
 Slice and dice the data with dimensions versus pivot tables
 Automate data integration—e.g. actuals
 Automate security/process
 Line Managers
 Add line item detail
 Document assumptions
 C-Level
 CFO Audit
 Automated Reporting
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15. Type 2 Benefits of Planning Systems
 Insights (I)
 The numbers help us understand
things we didn‘t see before
 Actionable Knowledge (A)
 The numbers to tell us what to do,
or more importantly, what our
choices are
 Decisions (D)
 Having financially backed up
choices sets up decision making
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16. What “They Say”
All Planning Software Claims
Effort
Every Vendor Says They Do Budgeting & Reporting
Reporting
Every Vendor Claims:
• Saves Time
• Adds Business Value
Budgeting
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Business Value

17. Question!
For those who SUCCESSFULLY replaced
spreadsheets with a financial reporting solution,
what best describes your success:
1. Saves time BUT does not add Business Value
2. Saves time AND adds Business Value
3. Adds Business Value BUT does not save time
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18. ―Actual‖ Value of Budgeting & Reporting
Typical Budgeting & Planning Software
Effort
―What FP&A Customer Says‖
about Impact of Dedicated
Budgeting & Reporting Tool:
Reporting • Saves Time
• BUT DOES NOT ADD
Business Value
Budgeting
Just Doing Budgeting
is Not Enough
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Business Value

19. The Big ROI – Agile Planning
Effort
THE BIG ROI COMES FROM ADDED BUSINESS VALUE
Forecasting
Reporting
Agile PlanningTM
Budgeting
Real-Time
Scenario Comparison
Budgeting Forecasting
& Reporting Adds Real Value
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Business Value

20. Planning Maturity—Seat-of-Pants
The Happy Caveman
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21. Planning Maturity—Budgeting
The Happy Accountant
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22. Planning Maturity—Reporting
The Reluctant Managers
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23. Planning Maturity—Forecasting
The Grumpy CFO
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24. Where Are You on the Curve?
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25. Planning Maturity—Agile Planning
The Happy Team
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26. The Need for Real Time
 The Excel PowerPoint Cycle
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27. Let‘s Hear from You!
Turn to your neighbor for the 3-minute drill
Is your management prioritizing Type 1 or 2
Improvements in budgeting & forecasting?
Type 1: Do what we‘re already doing, but do it more efficiently
Type 2: Introduce new planning processes that enable better business
decisions throughout the year
Please report back a Type 2 Benefit that is important.
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28. Examples of Type 2 Benefits
 Specialized Functionality
 Roll the Forecast
 BS/Cash Planning
 Integrate Short/Long Range
 Operations Integration
 Integrate Drivers
 Volume/Rate Causal Analysis
 Capture/Calculate KPIs
 Profitability Analysis
 Complex Allocations
 Analyze Customer Profitability
 Analyze Product Profitability
 Decision Support
 Interactive Dashboards AND Real-Time Planning
 Scenario Analysis On-the-Fly
 Strategy Analysis
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29. Planning Maturity—Agile Planning
Planning Maturity Curve (PMC)
Effort
Forecasting
Implement driver-based planning
Integrate (don‟t just import) actuals
Reporting Implement scenario analysis
Forecasting/Agile Planning
Move out of Excel
Reduce level of detail
Budgeting
Seat of Pants
AGILE Business Value

30. Case Study: Pittsburgh Mercy
Ray Wolfe, CFO (now CEO)
 Business Activities
 Chief Financial Officer, Pittsburgh Mercy Health
System 2006-present
 Director of Fiscal and Information Systems– Mercy
Behavioral Health 1996-2006
 Chief Fiscal Officer, Summit Center for Human
Development, 1988-1996
 Awards: Ventana Leadership 2010
 Education
 Juris Doctorate, West Virginia University 1977
 BA, Marshall University, 1974
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31. Case Study: Pittsburgh Mercy
 Community Mental Health and Health Care Related
 Mental Health, Mental Retardation, Drug/Alcohol, Homeless
 Prevention Services and a Private Foundation
 Serving Southwestern Pennsylvania
 Business Metrics
Pittsburgh Mercy Health System has
 3 subsidiary corporations
 60 community locations
 27 major programs product lines
 260 revenue/cost center
 1,700 employees; 106 Managers & Supervisors
 Funded through traditional insurance billing, government grants and
capitation contracts, Private Foundations
AGILE

32. Case Study: Pittsburgh Mercy
 Demographic Problems
 Managers with only clinical backgrounds/ no business skills
 60 sites yielded communication barriers and no common language
 Excel based —
 Overload mode of worksheets with link and formula errors
 Too much time to maintain and no certainty of integrity
 No way to import and compare actual data to the budget design
 Budgeting became a ritual without meaning
 Budgeting full-year totals with no seasonality
 Tops down budgets w/o manager buy in
 No P&L visibility by critical factors
 No operational integration
AGILE

33. Agile Planning Case Study: Pittsburgh Mercy
 Organization of Forecast Groups and Processes
 Group managers by functional areas—e.g.
 Community Treatment Teams
 Outpatient Clinics
 Child Services
 15 Groups each meet once a quarter
 3 to 12 managers per group
 4 members from accounting/finance
 Real time process elements
 Alight Planning displayed on Overhead Projector with Smart Board
 CFO is facilitator; Alight Admin on the mouse and keyboard
 Review/ make changes in real time
 Everyone sees everything!
AGILE

34. Level of Detail (from 10k to 3k line items)
 Technical Issues
 What level of detail? Actuals and plan (STARTED AT „DEFAULT
LOW LEVEL” Moved to:
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35. Using Actuals ―Rates‖ to Drive Plan ―Rates‖
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36. Case Study: Pittsburgh Mercy
 Progress to Date
 Financial Results
 $600K annual savings in revenue increases and cost cuts
 Process Results
 No budgeting
 Global updates twice a year – detailed updates quarterly
 Forecast accuracy to 2%
 Manager commitments based on demonstrated best practices
 Understanding the business as an operating entity
 Reaction to issues on a two year horizon, e.g. present cut plan
 Model Status
 Now on third model iteration built from scratch
AGILE

37. Rolling Forecasts & Agile PlanningTM
1. Move Out of Excel
 Deal with structure issues
 Deal with modeling issues
2. Reduce Level of Detail
 Plan the way managers think; not the Happy Accountant
 Reduce detail to better integrate strategy
3. Implement Driver-Based Planning
 Reduce direct input data volumes
 Increase ‗modeled elements‘—operational/driver based planning
4. Integrate (Don‘t Just Import) Actuals
 ―Rolling over‖ actuals in plan files—apples to apples
 Using actuals to understand trends—focus on rates
5. Implement Scenario Analysis
 You can‘t predict the future, but you can construct scenarios
 You‘re looking for easy maintenance and comparisons at all levels
AGILE

38. 1. Out of Excel
 Structure Issues
 Bound by templates: can‘t add line items on-the-fly
 Rollup structures with dimensions are difficult to create and maintain
 No multi-user security/process controls
 Importing (rekeying) actuals is error prone/cumbersome
Structure problems
Save As
relate to budget
templates where you
need to build in
structure and
financial intelligence
from scratch.
Version A Version N…
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39. 1. Out of Excel
 Modeling Issues
 Formula and structure errors—aka #Refs
 Dependency on key individuals—Lone Ranger Syndrome
 Line manager spreadsheet skills are limited; untrained/dangerous.
Modeling problems: cell-
based linking which
discourages driver-based
planning which is the
source of most errors.
AGILE

40. 1. Out of Excel
 What to Look for in Planning Applications
 You can build rollup structures with multiple dimensions/attributes
 Application incorporates multi-user security and process controls
 Users can create line items on-the-fly without breaking things
A fundamental deliverable
of a Planning Application is
user security and process
controls.
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41. 1. Out of Excel
 What to Look for in Planning Applications
 You can build rollup structures with multiple dimensions/attributes
 Application incorporates multi-user security and process controls
 Users can create line items on-the-fly without breaking things
 Importing capabilities—aka ETL (Extract, Transform & Load)
 Object-based linking with audit trails
Object-based linking is
critical for implementing
driver-based planning.
AGILE

42. 2. Reduce Level of Detail
 Plan at the Right Level
 Lowest level natural class accounts create too much detail
 Let managers plan the way they think
 Set the stage for driver-based planning
It‘s the data that‘s the killer
7 T&E accounts *
100 cost centers *
12 months = 8,400
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43. 2. Reduce Level of Detail
 Guidelines for ―Right Level‖
 Plan/report at a higher level—especially for natural accounts; or
 Set up a dual system: traditional budgeting plus forecast at higher level.
 Do the math for various alternatives; test imports for a ‗visual picture‘.
 Go step-by-step: not everything need be done all at once.
 The planning application must have line item detail
Example of an account
structure at a higher
level with line items
created by managers.
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44. 2. Reduce Level of Detail
 Benefits of Reducing Level of Detail
 Better operational connection for line managers
 Reduces overall data volumes; better visibility
 Set the stage for driver-based planning
Reducing level of detail
along with moving out of
spreadsheets reduces
Effort and enhances
Business Value.
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45. 3. Driver-Based Planning
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46. 3. Driver-Based Planning
Software Conversion # Services Hours Per Billable Bill Rate Billable
Licenses rate Customers Customer Services Services
Sold Revenues
Hours
Staff
Utilization
Rate
Predictive logic Services Hours Services
Staffing
diagram for a software Hours
Per Staffing
Heads
Month
& services business Services Expenses
 Salaries
It‟s all about Activities  PR taxes/ benefits
 Supplies
 Travel
& Rates  Recruitment
Training
 Etc.
Services
Profitability
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47. 3. Driver-Based Planning
 Benefits of Driver-Based Planning?
 Tight turn-around for forecasting has a chance
 Enforces focus on important operational drivers
 Visibility into the numbers—allows meaningful causal analysis of variances
 Sets up ―real time planning‖ for scenario analysis
Driver-based planning
delivers a significant
increase in Business
Value
AGILE

48. 4. Integrate Actuals
 Integration Issues
 Data spread across multiple sources
 Actuals and Plan at different levels
 No underlying activity drivers
 Actual and plan structures out of sync
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49. 4. Integrate Actuals
 Import Actuals
 Metadata and data imports based on chart of accounts structures
 Monthly updates from the general ledger
 Automated with ―connectors‖ or semi-automated with ETL tools
 Integrate Actuals
 Any source—GL,HR, CRM, RDBMS, OLAP
 Any data type—text, number, currency, percentage
 Any level—line item, natural accounts, cost center, etc.
 Any modeling—simple of complex linking, back calculate rates
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50. 5. Implement Scenario Analysis
 Deliverables
 Insights: What‘s Going On with the Numbers
 Actionable Knowledge: What Are Our Choices Between Things To Do
 Decisions: ―OK gang, here‘s what we‘re going to do!‖
About the Future
“Trying to predict the future is like driving down a
country road at night with no lights while looking
out the back window.”
Peter Drucker
“The future ain’t what it used to be…”
Yogi Berra
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51. 5. Implement Scenario Analysis
 Implementation Guidelines
 Easy to Create: On-the-Fly; No IT; Selectively Include Line Managers
 Easy to Maintain: Change Data and Structure in Near Real Time
 Real Time Feedback: The Planning Tool is the Presentation Tool
 Scenario Drill Down: Comparison & Analysis at All Levels
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52. Planning Maturity—Full Matrix
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53. Stuff for After this Presentation -- Slides Coming in
Email and posted to SlideShare
 Follow up with Alight
 BLamorte@AlightPlanning.com
 Telephone: (415) 456-8528
 Join us! The Agile Planner Blog
 Blog.alightplanning.com
 Webinar Resources
 Transforming Planning at Pittsburgh Mercy
 www.Alightplanning.com/Webinars/PM/Video.html
 Application Requirements for Rolling Forecasts
 www.AlightPlanning.com/Workshop/Requirements-for-Rolling-Forecasts/Video.html
 FOCUS Podcast Featuring Sid Ghatak & Ben Lamorte
 http://www.focus.com/roundtables/avoiding-business-performance-
mangement-software-failure-4-t/
 6% is not enough! The Case for Driver-Based Planning in 2012 with
Rob Kugel, Ventana Research and John Miller, Arkonas moderated by
Ben Lamorte
AGILE