The buzz around ESG is real.  And the fact that it’s being so widely discussed underpins how it has really become a business imperative for organizations to develop a strategy for ESG reporting & planning and then take positive action. 

Research shows that positive action on ESG pays off.  How?  By making companies more resilient in times of change.  Pandemic-related supply chain interruptions offer the perfect example.  Companies that invested in trusted relations with suppliers and employees got production back on track faster and grew faster than companies without those relations – underpinning the need to incorporate ESG across the organization.

Introduction

While moderating a recent joint webinar with PwC on ESG reporting & planning, I was joined by Julie Bogus (ESG Consulting Partner at PwC), Leonardo De Biasi (Performance Management & ESG Partner), and Liane Boyer (OneStream Senior Solutions Consultant).

I kicked things off by quoting a statement from PwC’s research: “Now is of course time to get serious about climate risk.”  But I also emphasized that even more important is recognizing the positive opportunities that arise from taking action.

Then I polled the audience with the following question: “How concerned are you that your organization does not have the right technology in place to support ESG reporting that meets the regulations where you operate?”

The results were interesting – 49% of respondents felt somewhat concerned and 25% felt highly concerned.  Only 4% reported not being at all concerned.

The Evolution of ESG

After the poll results, Ms. Bogus explained the three key elements of ESG: Environment, Social & Governance.  But the focus for organizations, she emphasized, should be on more than just the environmental aspects (e.g., emissions/pollution/waste) to include a wider focus on the people impacted by an organization and the demonstrated governance and leadership.  She then described how not all topics are equally relevant to all organizations.  The relevance level depends on the industry.

Next, she shared some key statistics (see Figure 1) to support the statement that organizational stakeholders know they must drive transformation with a positive ESG focus.

Figure 1:  PwC ESG Consumer Intelligence Series 2021

Ms. Bogus then spoke about the ESG landscape of regulations, some only in the proposal stage as with the SEC and others fully announced as with the EU.  Still, though, EU member states must ratify the regulation, which she emphasized could take another year.

The reporting framework developed by the Task Force on Climate-Related Financial Disclosure (TCFD) (see Figure 2), Ms. Bogus went on to explain, underpins the reporting standards being developed by the International Sustainability Standards Board (ISSB), the European Financial Reporting Advisory Group (EFRAG) and the US SEC.

Figure 2: PwC ESG Frameworks

Below is a quick breakdown of the voluntary frameworks/standards Ms. Bous explained:

• Value Reporting Foundation (VRF) being founded in 2021 as a merger of the SASB and the IIRC
• IRFS Foundation bringing the VRF and CDSB together to provide staff and resources to the ISSB
• Global Reporting Initiative collaborating with ISSB to coordinate work programs and standard-setting activities
• GRI sharing technical expertise on ESRS development with EFRAG

When responding to a question, Ms. Bogus agreed the current frameworks are challenging to navigate.

The Common Challenges

Ms. Bogus then shifted to talking more widely about why many organizations today struggle to incorporate ESG due to having limited policies, procedures and governance, highlighting the following challenges:

• Lack of controls or established governance framework
• Highly manual processes/information flow
• Disparate data sources and offline spreadsheets
• Frequent data issues mostly addressed in an ad-hoc fashion

The OneStream ESG Solution

At this point, I introduced OneStream and talked about how it’s a unified, Intelligent Finance platform that simplifies and unifies processes (see Figure 3). I specifically explained how organizations can perform all required reporting activity for ESG KPIs using the robust OneStream capability – a capability that has now successfully supported the financial processes of more than 1,200 customers worldwide.

Figure 3: OneStream Solution for ESG Reporting & Planning

Continuing, I focused on how OneStream delivers the capability that brings ESG processes to life with an accelerated implementation option through the OneStream ESG Blueprint.  This blueprint is available as a free download from the OneStream OpenPlace – Part of the Solution Exchange.

Ms. Boyer followed with a short demonstration of some of the many ESG capabilities in the OneStream platform, including data upload, validation and workflow to ensure the quality of entries.  Specifically, she explained how data can be integrated from underlying ERPs, operational systems and HR systems.  She also highlighted how ESG metrics and commentary can be viewed down to an individual

Figure 4: OneStream ESG Dashboard

Panel Questions

A panel session followed where I asked questions to Ms. Bogus and Mr. De Biasi. Here’s a breakdown of what our Q&A covered:

• “Why ESG disclosures require more than just ticking boxes and disclosing GHG emissions since results will be closely scrutinized, requiring enterprise-wide transformation rather than just getting the data right once.”
• “The magnitude of current changes in ESG regulations to the invention of double-entry accounting some 500 years ago.  Organizations must now consider how every transaction will impact the ESG world”.
• “The guiding principles of financial reporting and planning must be applied to ESG”.
• “Organizations need to fully identify all the disparate data sources and offline spreadsheet sources”.
• “Action is required in organizations to break down silos and bring together those who have been on point for setting emission reduction targets and linking to FP&A.  Ensuring that planning activities are occurring using only the ‘right’ assumptions about the organization’s size and future activities”.

To wrap up the Q&A, I asked Mr. De Biasi whether he sees financial leaders doubling down on ESG investments and initiatives again in 2023.  He referred to the second poll we ran during the webinar, the results of which showed that 41% of respondents reported investing in new technology.  While he saw that as a positive sign, it’s simply not enough.  And he explained why:  Every organization must have the right technology in place to meet all ESG reporting and planning requirements. Anything less simply leaves some organizations lagging behind competitors and over-exposed to risk.

Learn More

Need to invest in new ESG technology and want to learn more, read our ESG Whitepaper or check out the blog posts in our ESG series.  And if your organisation is ready to align ESG reporting & planning with financial reporting and get ahead of the upcoming disclosure mandates, contact OneStream today to get started.

Download the White Paper

Higher education Finance teams today are tasked with managing a complex and challenging business landscape – one that requires balancing evolving student needs, increasing people and infrastructure costs, resource constraints and more.  The ability to quickly problem-solve and steer the university through these challenges while maintaining financial sustainability is daunting.  But what if universities could not only navigate this complexity but also thrive?  Corporate Performance Management (CPM) makes both possible.  Designed to help maximize business impact, CPM empowers higher ed Finance teams to ensure their institutions keep up with the pace of change, uncertainty and organizational complexity.

The value of modern Finance lies not in eliminating complexity but in effectively navigating it.

Now more than ever, higher ed Finance teams face a diverse set of pressures and challenges, including the following financial constraints, external forces, internal complexities and operational obstacles:

The ability to adapt to the above pressures and changing landscape while ensuring financial sustainability is complex with the tools and processes colleges and universities are using today.  To be more agile, Finance leaders are looking for ways to simplify and scale processes to keep pace with rapid change and plan effectively.

Traditional Higher Education Planning Practices

Traditionally, higher education institutions have used disconnected Finance processes and systems for planning and reporting.  Those efforts have primarily focused on the cumbersome, time-intensive annual budget process.  While the annual budget is important for funding allocations, control and accountability of spend, and communication with stakeholders, it relies on the assumption of operating in a stable and predictable business environment.  Today’s rapidly changing and uncertain business landscape shatters that assumption because the budget can quickly become outdated and difficult to revise.

To address these limitations, colleges and universities must evolve to more agile processes that emphasize trust, collaboration, innovation and risk management. 

CPM enables that evolution. 

By design, CPM helps higher education Finance teams bring together an institution’s data, analytics, plans and reporting – all in one place – to conquer complexity and enable confident decision-making.

What Is CPM?

CPM is an overarching term used to describe the methodologies, metrics, and systems used to monitor and manage the business performance of an organization.

CPM encompasses the core Finance processes of planning, reporting and analytics, with the goal of optimizing performance by aligning strategic initiatives with resources, activities and results.  Accordingly, CPM provides business leaders with a framework focused on key performance indicators (KPIs) and the metrics to measure “success.”

That success may look different for each institution because of varying educational missions, communities served, programs offered, and so on.  Fundamentally, Finance leaders can define ‘success’ as the ability of an institution to achieve financial sustainability while effectively fulfilling the university mission and strategic initiatives (see Figure 1).

Shifting the institution’s financial processes to include CPM to track strategic priorities, goals and initiatives is imperative for long-term financial sustainability.

CPM gives Finance leaders peace of mind by giving them the tools to navigate the complexity and best serve their institution’s mission and students.  How?  By enabling more trust in data, better collaboration with stakeholders and more agility in decision-making.

Trust in Numbers

CPM tools combine financial and operational data from various sources to provide a clear view of institutional performance.  This view allows Finance to use one source of truth to monitor performance in real-time across various activities, including auxiliaries, academics, research and more. 

Such transparency empowers Finance to have a comprehensive view of data and be more confident decision-makers.

For example, as resource constraints continue to expand and change, Finance must understand the current state of funding resources.  Are they tied up in commitments?  Are they being used for future capital initiatives?  The answers to these questions and others provide transparency on how funding is being used to help identify where resources are being underutilized or what areas need additional funding.  Recognizing programs with excess funds creates an opportunity to instead invest them effectively in infrastructure, facilities, teaching and other areas in need of additional funding.  Finance can look at how to best support each area by asking questions to maximize the impact.  

By having a sole source of truth for financial and operational data, higher education Finance leaders can trust the numbers and maximize the impact on the institution.

Improved Collaboration

Getting stakeholder alignment across the institution is tough, but having clear strategic goals and priorities aligned with resources, activities and results helps focus collaboration efforts.  When everyone is working toward achieving the same metrics and KPIs, Finance can better partner with departments and programs.

For example, an institution may have an initiative to increase academic program returns by expanding a current program.  Having core KPIs, such as administrative costs per student or net tuition revenue per student, helps create direction on how to set up a new initiative for financial success.  For such efforts, focused communication and collaboration are essential.

And with CPM, discussions between Finance and stakeholders can be better focused on specific items. Here are a few examples:

• What costs are affiliated with marketing efforts?
• What kind of financial discounts or incentives can be offered?
• How can rising administrative costs be managed?

In other words, the different departments and programs can maintain their independence and innovative thinking while working in unison with Finance to achieve strategic priorities with financial sustainability. 

Increased Agility

CPM tools also enable Finance teams to leverage real-time data and scenario modeling capabilities to support agile decision-making.  By having one source of truth for financial and operational data, institutions can see the current state of the business and model alternative futures based on different assumptions (e.g., enrollment shifts, interest rate changes, government funding modifications, etc.). 

These capabilities allow stakeholders to understand the potential impact of different scenarios and more quickly respond to changes in the budget, forecast or strategic plan (see Figure 2).  In turn, the university or college can take advantage of new opportunities and/or minimize risk.  And in the current volatile times, the resulting increased agility offers a true competitive advantage.

Confident Decision-Making

Overall, incorporating CPM in your institution will bring more confidence in the financial success of your college or university.  Why?  Because CPM supports long-term sustainability in the following ways:

• Unifies complex and fragmented business processes to provide a single, holistic view of institutional performance.
• Focuses financial planning processes across the institution to ensure relevancy and purpose in support of the institution’s mission and goals. 
• Equips the institution to identify and mitigate potential risks and take advantage of innovative opportunities.

Conclusion

In sum, CPM helps Finance overcome the diverse set of pressures and challenges in the current higher educational landscape.  How?  By enabling more trust in numbers, better collaboration, increased agility and more confident decision-making.  Through those benefits, CPM facilitates actionable insights that will empower and improve strategic decision-making and long-term financial sustainability.

Learn More

Want to learn more about how OneStream can empower your higher education Finance team?  Download our Higher Education solution brief, or contact us for a demonstration.

Download the Solution Brief

Modern organisations can no longer ignore the buzz around ESG.  Short for Environmental, Social and Governance, ESG is a reaction to Milton Friedman’s 1970s credo that the social responsibility of business is to increase profits.  But far too many examples today show how this narrow definition of social responsibility has negatively impacted employees, local communities and/or the environment – all of which are stakeholders. 

Failing to consider these stakeholders threatens sustainable business models.  Combatting that threat, ESG aims to consider all stakeholders in the company.  And OneStream’s capabilities for ESG reporting & planning ensure that trusted information can be effectively available as and when required.  But before we dive into all of that, let’s first review the benefits of ESG and the bidirectional relationship between organisation and climate.

The Benefits of ESG

Research shows that ESG pays off.  How?  It makes companies more resilient in times of change.  The interrupted supply chains during the pandemic offer the perfect example.  Companies that invested in trusted relations with suppliers and employees got production back on track faster and grew faster than companies without those relations. 

Not convinced?  Well, then consider the following.

Growing demand for sustainable investments, a market estimated to reach $34 trillion in 2026, runs rampant today.  Within that environment, fund managers must consider demands like zero emissions/zero pollution, no child labour, equal opportunities and much more throughout the entire value chain of portfolio assets.

These considerations require data, typically non-financial data, and the quality of that data is questionable at best.  Using that data leaves asset managers facing the risk that their green funds or equality portfolios contain some rotten eggs.  And just around the corner lies greenwashing and other types of reputational damage.

At the same time, governments across the globe want to accelerate the transition to renewable energy. The EU Green Deal, the US Inflation Reduction Act and similar transition programs in other parts of the world all aim to support private investments in green technology – with massive amounts of public money.  Yet these governments face a big challenge:  How can governments ensure they’re supporting truly green technology and not just some repackaged old tech?

So again, data of questionable quality is an issue.  How, then, can anyone trust the data quality?  Governments have an advantage here:  they have regulatory bodies.  What do they do for ESG?  They regulate it.  The US-SEC has issued drafts that are expected to become law as of FY 2024.  In November 2022, the EU parliament voted for the CSRD, which will also become mandatory starting in FY 2024 for the first cohort of companies.  Other jurisdictions (e.g., UK, ANZ, Singapore, SA) have passed or will soon pass similar legislation.

Using quantitative and qualitative data to report on environmental and social topics, combined with governance, will ensure policies are in place and anchored throughout the company, all the way up to the executive level. This process is a huge undertaking for companies.   It’s a journey.  Some companies have been on this journey for 15-20 years.  Others are just getting started.

This topic is expansive, but a blog post is not an essay.  To stay mindful of your time, let’s just zoom in on energy transition and the resulting focus on climate change as part of the larger environmental topic.

The Bidirectional Interaction Between Organisation and Climate

Through their activities, organisations impact the environments in which they operate, and organisations’ emissions of greenhouse gases (GHGs) potentially impact climate change.  Organisations can make choices to reduce that impact, however.  So when organisations claim a desire to become NetZero by 2035, they need to make choices that achieve that goal. 

The consequences of not taking action on emissions can negatively impact the business model of a organisation.  When making decisions for the future, organisations should therefore consider the related risks and opportunities of climate change.

See the similarities with Finance?  With setting financial targets and reporting on progress.  With identifying opportunities and mitigating risks that impact the future capabilities to make a profit.  These steps are what financial outlooks are all about.  Similar to financial outlooks, financial markets discount the resilience to climate change and other ESG performance metrics in the stock price of a company.

How can Organisations ensure they are prepared for this journey?

Why OneStream for ESG Reporting & Planning

For many organisations, the area of ESG is new.  And data quality is poor.  Organisations must account not only for their own operations but also for their entire value chains.  That combination creates a massive puzzle of data with which many organisations struggle.  Some say that the regulatory part is perhaps the ‘easy’ part.  How to get reliable data from all suppliers is a much bigger challenge.  And how to plan the roadmap towards a Net Zero commitment for 2035 is also a significant challenge.

Data quality will thus undoubtedly be a main topic for years to come.  And the OneStream platform has proven to be of great value for managing data quality (see Figure 1) .  At OneStream, our data integration engine, our workflows, our consolidation and our task audit capabilities are exactly what organisations need to get on top of data quality.

But how can organisations report on ESG performance in a meaningful way?  By aligning it with financial performance.  The other part of our claim for ESG is therefore that companies must align ESG reporting & planning with their financial reporting and planning by…

• Allowing leadership to make decisions on financial and ESG criteria. 
• Reporting on performance in a consistent, easy-to-understand way for the financial markets and other stakeholders.  
• Generating reports and analyses that speak the language of the board and provide a solid basis for the company’s strategy.

How does OneStream do all of that?  Those familiar with our platform know we’re recognised as the market leader when it comes to data quality, reporting, planning and more.  That means the platform, just as it is, can also handle the challenges in ESG reporting & planning (see Figure 2).  And we have customers who are already doing their ESG reporting on OneStream today.

The OneStream ESG Blueprint

How can the release of our ESG Blueprint solution (included in your OneStream license) help your organization?  In short, you can accelerate your ESG reporting in OneStream.  The blueprint adds auditable carbon calculations with pre-configured metadata, business rules and data tables to support your Scope 1 and 2 emissions.  Apply the emission factors of your choice, and let OneStream handle your contracts for renewable energy (RECs, PPAs) to calculate your location and market method.  Then, combine ESG and financial data into intensity metrics that show the development towards your emission goals.

In the ESG Blueprint, you can enter activity (e.g., fuel consumption, electricity usage) or distance (by vehicle type).  The blueprint then applies factors to convert this input into carbon dioxide equivalent (CO2e), the common denominator for global warming potential.  The solution also converts the common types of refrigerants into CO2e. 

You can slice and dice your emissions data (See Figure 3) in the same way you do your financials (e.g., by region, product, business area, etc.).  Extensible Dimensionality provides your ESG data model with the structures you defined for your financial model.  From there, you can extend the ESG model with more granularity – for example, by location (factory, warehouse, mine, office) or asset class (e.g., vehicle type).  And you can do it all with single point of maintenance and full control.

Plus, the calculations in the ESG Blueprint are fully transparent and auditable.  The solution comes with a set of reports that check the consistency of the data model – ensuring your organisation can report and plan ESG with full confidence.

Learn More

To learn more, read our ESG Whitepaper or check out the blog posts in our ESG series.  And if your organisation is ready to align ESG reporting & planning with financial reporting and get ahead of the upcoming disclosure mandates, contact OneStream today to get started.

Download the Whitepaper

Market interest in corporate performance management (CPM) solutions, artificial intelligence (AI) and analytic applications that help organizations enable confident decision-making is clearly on the rise.  Maybe this, combined with the reduced pandemic threat and return to corporate travel explains why attendance at OneStream’s 2023 Splash User Conference and Partner Summit reached a new high with 2300 in-person attendees.

Making a Splash at National Harbor

From April 17^th – 20^th, 2023 the OneStream Splash User Conference made its debut at the Gaylord National Harbor Resort & Convention Center overlooking the Potomac River just outside of Washington, D.C.  This was the second in-person, North American Splash event following two years of virtual events held during the COVID-19 pandemic where a record number of attendees came together to learn, connect and get inspired by each other.

This year’s event still had a virtual option which drew over 700 attendees, while the in-person event attracted roughly 2300 customers, prospective customers, partners, employees, media, analysts and other guests. In case you missed it, here’s a recap of the highlights from the week.

Getting the Party Started

The Monday of Splash week is traditionally the day when OneStream hosts hands-on workshops for customers and prospects, offers drop-in demos on a variety of topics, and opportunities for our partners and customer advisory board (CAB) members to get together and provide feedback on OneStream’s key initiatives.

This year was no exception, with full-houses at all the workshops – while most of the conference attendees spent the day traveling and arriving in time for the opening reception in the expo hall featuring our 38 partner sponsors, OneStream demo pods, and other activities.

One of the highlights of the opening reception was the presence of the Washington Nationals famous Racing Presidents, larger-than life figures who joined us to take pictures with attendees and entertain the group with their antics.

Empowering Today to Plan for Tomorrow

The Tuesday of Splash started with the Opening Keynote featuring updates from several OneStream executives including Ken Hohenstein – Chief Revenue Officer, Tom Shea – CEO and Craig Colby – President.  In his opening, Mr. Hohenstein highlighted the growth in customers OneStream has achieved as a company, which has averaged 56% per year over the past 8 years and is now over 1200 organizations globally.  Mr. Hohenstein also highlighted the featured charity for this year’s event (The Children of Fallen Patriots) and some upcoming events such as Splash Berlin in September and the 2^nd annual Wave Developers’ Conference in October.

Co-founders Tom Shea and Craig Colby then embarked on their keynote session titled “Empowering Today to Plan for Tomorrow.”  They spoke about the vision and strategy for OneStream’s unified CPM software platform and the exponential value it’s delivering for customers in Finance and across the enterprise, with a growing number of use cases.  Then they provided the audience with a tour of the key enablers within the OneStream platform, including the Unified Data Model, Data Management and Quality, Core CPM Services, Analytic Services and AI Services.

Mr. Shea highlighted how AI Services provides the foundation for OneStream’s Sensible Machine Learning solution, and he previewed some of the use cases OneStream is exploring for Chat GPT-style AI tools under the moniker of Sensible GPT.  Mr. Shea even showed a demonstration of how after consuming OneStream’s documentation, a purpose-built version of Chat GPT like capabilities could tell a user how to create a working capital ratio in OneStream.  The response included a 5-step method for the user to follow and even suggested some highly accurate business rules to include in the process. Tom and Craig then announced the official launch of the OneStream Solution Exchange.

The Solution Exchange builds on the success of the OneStream MarketPlace and the inaugural OneStream Wave Developer conference to further enhance the OneStream platform development experience with the addition of partner-built and community shared solutions.

The Solution Exchange will accelerate the development and delivery of new solutions to OneStream customers to help extend the value of their investments in the platform. The Solution Exchange consists of three solution portals: MarketPlace, PartnerPlace and OpenPlace.

Five OneStream partners were included in the initial launch of the PartnerPlace:  AMCO, Black Diamond Advisory, Finit, Spaulding Ridge and Strategic IQ. Check out the PartnerPlace to learn more about the solution these partners have created for the initial launch, with more on the way!

Before handing the keynote back to Mr. Hohenstein, Tom and Craig laid out OneStream’s expanded vision for the OneStream platform, delivering what they called “CPM+” capabilities. They highlighted how traditional CPM solutions have provided value to customers in enabling management to “manage” the business based on month-end reporting and planning.  But there’s a big gap between the ERP systems that are processing transactions and the CPM solutions that are summarizing results at month-end, and that’s the lack of operational detail that truly drives financial performance.

CPM+ solutions fill this gap by delivering daily and weekly KPIs and metrics to managers that enable them to “steer” the business by making key decisions that can have a big impact on month-end results.  The analogy they used to drive this point home was a race car driver closing their eyes and opening them every 30 seconds vs having visibility into what’s happening around them in real-time.  With eyes closed, the driver has a high chance of crashing into another car or going off the track – and the same is true for enterprises that are only measuring financial performance every 30 days.

The keynote session wrapped up with a customer panel, with Mr. Hohenstein hosting a fireside chat with representatives from several  customers including Pella Windows & Doors to discuss their journeys replacing multiple legacy EPM applications and custom solutions with OneStream’s unified, Intelligent Finance Platform.

After the keynote session, the crowd dispersed to attend breakout sessions, drop-in demos, meet and greets and to spend time with our sponsors in the Expo Hall.

One of the more interesting sessions held on Tuesday was the “Moving Beyond the AI Hype: Sensible ML Customer Panel.”  In this session several early adopters of the solution (Polaris Inc., Stora Enso and The Howden Group) spoke about their implementations and deployments of OneStream’s Sensible ML solution and the impact this has had on their decision-making.  This included improving the speed and accuracy of their forecasting, gaining improved visibility into the true business drivers behind their forecasts, and giving line managers the ability to make more agile, informed decisions.

AI in Action and [email protected]

The Wednesday of Splash continued with more breakout sessions, drop-in demos, mix & meet events and other activities leading up to the guest keynote session with former professional racecar driver, Danica Patrick.  During this session, CEO Tom Shea hosted a fireside chat with Danica to learn about the journey she took from racing go-carts to the Indy 500 and her current interests and pursuits.  It was an interesting conversation, that touched on a variety of topics ranging from cars to conspiracy theories about the moon-landing, to extreme workouts with surfer Laird Hamilton.

One of the more interesting and thought-provoking sessions on Wednesday was an R&D session focused on how OneStream is planning to leverage Generative AI capabilities in its platform.  Initially badged as Sensible GPT, during the session Tom Shea and his R&D team demonstrated several use cases for the technology.  One of these use cases was similar to the one highlighted in the keynote, where the tool consumed OneStream documentation, white papers, books and other content and could provide technical and application assistance to users entering questions via a chat interface.

Another use case was based on the tool consuming corporate information, then answering questions about legal contracts, sales forecasts, and the impact of investments in advertising. We are early in the lifecycle of Large Language Models (LLM) such as Chat GPT, and the technology is evolving quickly – but the potential is clearly compelling.

The true highlight of the day was the annual Splash Night Out party, which took the form of a rock ‘n roll themed street party in the streets and bars surrounding the Gaylord.  OneStreamers, customers, partners and guests showed their true colors, dressing up as everything from Elvis and Willie Nelson to the Spice Girls, Devo, Harry Styles and Sia.  A great time was had by all!

Closing Awards and More Learning

The conference wrapped up on Thursday with the closing awards ceremony, reveal of next year’s event location (Las Vegas) and a full day of more learning opportunities for attendees.  The awards included recognition for the best costumes at Splash Night Out, our top customer advocates and “Power of the Platform” award given to our partners that have the broadest and most innovative platform deployments.  Congratulations to:

• PwC – Power of the Platform
• Finit – Power of the Platform
• Strategic iQ – Innovation Award

Overall, it was another amazing event.  Over 75 sessions including customer success stories, product updates, tips & tricks, and breakouts on topics such as Financial Close & Consolidation, Planning & Forecasting, ESG Reporting, Sensible Machine Learning, ChatGPT, the Solution Exchange, and more.

Registered attendees will have access to the virtual event content for 60 days.  If you didn’t register or attend, you can check out a recording of a live OneStream podcast that was recorded on the expo floor, hosted by OneStream CSO Peter Fugere and featuring interviews with several OneStreamers, partners and other guests.

We hope to see you at upcoming events such as Splash Berlin in September, The Wave Technical Conference in October, or Splash Las Vegas May 20 – 24, 2024.

Splash Las Vegas

Organizations everywhere rely on data to make informed decisions and improve the bottom line through data management.  But with the vast amount of data today, things can quickly get out of control and spawn data gremlins (i.e., little pockets of disconnected, ungoverned data) that wreak havoc on the organization.

Remember those adorable creatures that transformed into destructive, mischievous creatures when fed after midnight in the 1984 comedy horror film Gremlins?  (see Figure 1)

In the same way, data gremlins – aka “technical debt” – can arise if your systems are not flexible to enable finance to deliver.  Effectively managing data to prevent data gremlins from wreaking havoc is crucial in any modern organization – and that requires first understanding the rise of data gremlins.

Do You Have Data Gremlins?

How do data gremlins arise, and how do they proliferate so rapidly?  The early beginnings started with Excel.  People in Finance and operations would get big stacks of green bar reports (see Figure 2). Don’t remember those?  They looked like the image below and were filed and stacked in big rooms.

When you needed data, you pulled the report, re-typed the data into Excel, added some formatting and calculations, printed the spreadsheet and dropped it in your boss’s inbox.  Your boss would then review and make suggestions and additions till confident (a relative term here!) that sharing the spreadsheet with upper management would be useful, and voila, a gremlin is born. 

And gremlins are bad for the organization.

The Rise of Data Gremlins

Data gremlins are not a new phenomenon but one that can severely impact the organization, leading to wasted time and resources, lost revenue, and a damaged reputation.  For that reason, having a robust data management strategy is essential to prevent data gremlins from causing havoc.

As systems and integration got more sophisticated and general ledgers became a reliable book of record, data gremlins should have faded out of existence.  But did they?  Nope, not even a little.  In fact, data gremlins grew faster than ever partly due to the rise of the most popular button on any report, anywhere at the time – you guessed it – the “Export to .CSV” button.  Creating new gremlins became even easier and faster, and management started habitually asking for increasingly more analysis that could easily be created in spreadsheets (see Figure 3).  To match the demand in 2006, Microsoft increased the number of rows of data a single sheet could have to a million rows.  A million!  And people cheered!

However, errors were buried in those million-row spreadsheets, not in just some spreadsheets, but in almost ALL of them.  The spreadsheets had no overarching governance and could not be automatically checked in any way.  As a result, those errors would live for months and years.  Any consultant who experienced those spreadsheets will confirm stories of people adding “+1,000,000” to a formula as a last-minute adjustment and then forgetting to remove the addition later.  Major companies reported incorrect numbers to the street, and people lost jobs over such errors.

As time passed, the tools got more sophisticated – from MS Excel and MS Access to departmental planning solutions such as Anaplan, Essbase, Vena Solutions, Workday Adaptive and others.  Yet none stand up to the level of reliability IT is tasked with achieving.  The controls and audits are nothing compared to what enterprise resource planning (ERP) solutions provide.  So why do such tools continue to proliferate?  Who feeds them after midnight, so to speak? The real reason is that these departmental planning systems are like a hammer. Every time a new model or need for analysis crops up, it’s “Let’s build another cube.” Even if that particular data structure is not the best answer, Finance has a hammer, and they are going to pound something with it.  And why should they do their diligence to understand the proliferation of Gremlins? (see Figure 4)

The relationship can best be described as “complicated.”  ERPs and data warehouses are secure, managed environments but offer almost no flexibility for Finance or Operations to do any sophisticated reporting or analysis that has not been created for them by IT.  Requests for new reports are made, often through a ticket system, and the better IT is at satisfying these requests, the longer the ticket queue becomes.  Suddenly the team is doing nothing but reporting, and that leaves Finance thinking, “How the heck is there a team of people in IT not focused on making the business more efficient?”

The answer suggested by the mega ERP vendors is to stop doing that.  End users don’t really need that data, that level of granularity or that flexibility.  They need to learn to simplify and not worry about trivial things.  For example, end users don’t need visibility into what happens in a legal consolidation or a sophisticated forecast.  “Just trust us.  We will do it,” ERP vendors say.

Here’s the problem:  Finance is tasked with delivering the right data at the right time with the right analysis.  What is the result of just “trusting” ERP vendors?  Even more data gremlins.  More manual reconciliations.  Less security and control over the most critical data for the company.  In other words, an organization can easily spend $30M on a secure, well-designed ERP system that doesn’t fix the gremlin problem – emphasizing why organizations must control the data management process.

The Importance of Controlling Data Management and Reducing Technical Debt

Effective data management enables businesses to make informed decisions based on accurate and reliable data.  But controlling data management is what prevents data gremlins and reduces technical debt.  Data quality issues are perpetuated by the gremlins and can arise when proper data management practices aren’t in place.  These issues can include incomplete, inconsistent or inaccurate data, leading to incorrect conclusions, poor decision-making and wasted resources.

One of the biggest oversights when dealing with data gremlins is only focusing on Return on Investment (ROI) and dismissing fully burdened technical debt (see Figure 5). Many finance teams use performance measurements like Total Cost of Ownership (TCO) and ROI to qualify that the solution is good for the organization, but rarely does the organization dive deeper – beyond the performance measurements to include opportunities to reduce implementation and maintenance waste. Unfortunately, this view of performance measurements does not account for hidden complexities and costs associated with the negative impacts of data gremlin growth.

Technical Debt is MORE than the Total Cost of Ownership

Unfortunately, data gremlins can occur at any stage of the data management process, from data collection to analysis and reporting.  These gremlins can be caused by various factors, such as human error, system glitches or even malicious activity.  For example, a data gremlin could be a missing or incorrect field in a database, resulting in inaccurate calculations or reporting.

Want proof?  Just think about the long, slow process you and your team engage in when tracking down information between fragmented sources and tools rather than analyzing results and helping your business partners act.  Does this drawn-out process sound familiar?

The good news is that another option exists.  Unifying these multiple processes and tools can provide more automation, remove the complexities of the past and meet the diverse requirements of even the most complex organization, both today and well into the future. The key is building a flexible yet governed environment that allows problems and new analyses to be created within the framework – no Gremlins.

Sunlight on the Data Gremlins

At OneStream, we’ve lived and managed this complicated relationship our entire careers.  We even made gremlins back when the answer for everything was “build another spreadsheet.”  But we’ve eliminated the gremlins in spreadsheets only to replace them with departmental apps or cubes that are just bigger, nastier gremlins.  Our battle scars have taught us that gremlins, while easy to use and manage, are not the answer. Instead, they proliferate and cause newer and bigger hard-to-solve problems of endless data reconciliation.

For that reason, OneStream was designed and built from the ground up to eliminate gremlins, including the need for them in the future (see Figure 6).  OneStream combines all the security, governance and audit needed to ensure accurate data – and does it all in one place without the need to walk off-prem while allowing the flexibility to be leveraged inside the centrally defined framework.  In OneStream, organizations can leverage Extensible Dimensionality to provide value to end users to “do their thing” without having to push the “Export to .CSV” button.

OneStream is also a platform in the truest sense of the word.  The platform provides direct data integration to source data, drill back to that data, and flexible, easy-to-use reporting and dashboarding tools. 

That allows IT to eliminate the non-value add cost of authoring reports AND the gremlins – all in one fell swoop.

Finally, our platform is the only EPM platform allowing organizations to develop their functionality directly on the platform.  That’s correct – OneStream is a full development platform where organizations can leverage all the platform resources of integration and reporting needed for organizations to deliver their own Intellectual Property (IP).  They can even encrypt the IP in the platform or share it with others.

OneStream, in other words, allows organizations to manage their data effectively.  In our e-book on financial data quality management, we shared the top 3 goals for effective financial data quality management with CPM:

• Simplified data integration – Direct integration to any open GL/ERP system empowers users to drill back and drill through to source data.
• Improved data integrity – Powerful pre-data and post-data loading validations and confirmations that ensure the right data is available at every step in the process.
• Increased transparency – 100% transparency and audit trails for data, metadata and process change visibility from report to the source.

Conclusion

Data gremlins can disrupt business operations and lead to severe business implications, making it essential for organizations to control their data management processes before data gremlins emerge.  By developing a data management strategy, investing in robust data management systems, conducting regular data audits, training employees on data management best practices and having a disaster recovery plan, organizations can prevent data-related issues and ensure business continuity.

Learn More

To learn more about how organizations are moving on from their data gremlins, download our whitepaper titled “Unify Connected Planning or Face the Hidden Cost.” 

Download the White Paper

Many of you in the Enterprise Performance Management (EPM) space immediately recognize the name Cartesis, regardless of whether you’re an actual customer.  Before I dive into the nitty gritty about the positives and negatives of Cartesis, though, I’ll dive into a little of the history for those of you unfamiliar with the name.

A French company, Cartesis developed a product eventually renamed from Magnitude to Cartesis Finance.  Cartesis Finance, the company’s flagship offering, was at the time (and using the company’s words) “the only fully integrated, web-based solution for enterprise performance management.” 

Cartesis’ unique integrated data model supported the key financial management activities – planning, budgeting, forecasting, statutory consolidation, management reporting and performance management (see Figure).  While the Cartesis Finance product was sold widely, including in the UK and US, with around 700-800 customers, a large percentage of customers were in France.

Cast your minds back to 2007.  At the time, significant “consolidation” occurred among EPM vendors.  Oracle acquired Hyperion early in the year.  Business Objects announced the acquisition of Cartesis the following month, and then SAP rushed to acquire OutlookSoft.

SAP went a step further in late 2007 and acquired Business Objects.  This acquisition resulted in SAP owning multiple EPM solutions.  While Cartesis Finance became SAP Business Objects Financial Close (BOFC), it was later renamed simply to SAP BFC.

Now that you know the history, I’ll dive into the positives and negatives of Cartesis/SAP BFC.

Cartesis/SAP BFC – The Positives

Cartesis Finance (previously Magnitude) was designed in France, a country known for having the most complex accounting and reporting rules in the world.  Cartesis began as an internal project in the global French company Vivendi and was subsequently spun out into an independent company.  The team therefore focused on the complexity of both global companies and the French accounting rules, targeting primarily the largest French companies and those in the CAC-40, France’s principal stock market index.  The resulting solution was technically strong and could handle almost any challenge.

In Cartesis’ words, “Our powerful technology handles the complex but essential task of unifying information, people and processes in a single data model that can be applied easily and consistently across your company’s business.”

Below are the sweet spots for Cartesis’ product:

• Audit trail on consolidated data – Specific dimensionality to trace numbers from consolidated reports to source data.
• Strong controls on data collection – Data could only be loaded to valid intersections since tight control of data collection/entry environment is advantageous in large-scale consolidations.
• Administration by functional users – System was configuration-screen led and intuitive to learn.
• Consolidation Rule wizard – A strong feature in demonstrations with no coding/scripting required for rules, yet more sophisticated rules required SQL formulas in addition to the wizard.
• Multi-period capabilities – Strong periodic capability with dedicated dimensionality.
• Versioning on consolidations – Several consolidations could be run simultaneously with history maintained for quick reference back.
• Up to 40 dimensions available – A single Cartesis/SAP BFC instance would contain 22 fixed dimensions and users could create and store up to 18 user-defined dimensions.

Cartesis/SAP BFC also natively supported the elimination of inter-segment trading within a single legal entity with multiple business segments.  Again, this feature intentionally supported only the largest, most complex consolidations.

In Cartesis/SAP BFC, all journal entry data was analyzed by a specific dimension dedicated to tracking journals, called “journal entry number.” Consequently, reports could be built that retrieved the detail of a specific amount based on the journal entry header.  This type of report was extremely useful in determining how an amount is built up from the input level to the consolidated position – especially if multiple manual journal entries had been posted to the same account.

In sum, Cartesis/SAP BFC was much more capable than peer platforms at supporting several reporting cycles with differing analyses.  The solution evolved to support the complex statutory consolidation requirements in the business models of the largest organizations.  This evolution, however, was to the detriment of other requirements (e.g., budgeting, forecasting and cost & profitability requirements) – and the negatives of Cartesis didn’t end there.

Cartesis/SAP BFC – The Negatives

As alluded above, the evolution of Cartesis/SAP BFC continued a complex statutory consolidation trajectory.   This trajectory eventually contributed to some challenges when other more comprehensive EPM technology suites appeared on the market that offered planning & budgeting capabilities or more advanced analytics.  

Another major issue was the technical architecture of Cartesis/SAP BFC.  The relational database design was complex, and SAP would eventually choose not to make the application available on HANA, creating an uncertain future where the product would only be supported for a set number of years.

Despite being a popular application, Cartesis/SAP BFC has the following recognized limitations:

• Data integration capabilities – Cartesis never provided a true ETL layer, neither within the application nor via a reselling agreement, so an SAP FIM implementation was required.
• Reporting capabilities – Cartesis/SAP BFC did offer integrated reports, which were static and did not provide the functionality needed for the ad-hoc reporting many users require.
• Excel add-in – The full version required an additional implementation of BusinessObjects Extended Analytics via an EPM add-in that required an OLAP cube for storage and data processing, which was not inherent in BFC’s architecture.  There was also a lighter – Excel link – version available where GetData formulas could be used to retrieve data.
• Planning and allocation capabilities – Cartesis/SAP BFC had only limited planning capability and relied heavily on separate planning applications.
• Heavy administration burden – The number of screens to process was significant for most tasks, typically resulting in a higher number of administrators than other applications.

In the positives, I mentioned the tight control over the data collection/entry environment.  Many users, however, found this control to be a negative over time.  Why?  Well, for data entry in Cartesis/SAP BFC, each specific data entry point had to be explicitly opened during the development phase.  By default, all intersecting data points were blocked for data entry or importation.  During implementation, the development team must then open each individual data point or ranges of data points.  As you can imagine, this process caused delays and frustrations when new intersections needed to be opened.

The intuitive workflows that many users today are familiar with were not a feature of Cartesis/SAP BFC.  Data submitted to Cartesis/SAP BFC had to follow a pre-defined process of being entered into a data entry environment known as the “package layer.”  Once submitted to a package, data had to be validated, published and integrated.  Publishing a package was the equivalent of stating the data within the package was available for review.  Any amount not integrated (data would physically be copied to a pre-consolidated level) would not be selected by the consolidation.  No deviation from this cumbersome submission process was allowed, which frustrated many users.

Finally, intercompany reconciliation/matching at balance and transaction was only available with a separate web-based tool called “Intercompany Server from Cartesis,” since re-branded to SAP Intercompany.  Using the tool required manual data transfers to and from the actual data source.

SAP EPM – The Options for Cartesis/SAP BFC Customers

Many organizations are facing the end of support for their Cartesis/SAP BFC application, announced for 2027.  Many customers will be forced to implement SAP S/4 HANA.  Both those customers and those using other SAP Legacy EPM Systems for Consolidation and/or FP&A face high risks in following the SAP Strategy with Group Reporting and Analytics.

SAP’s vision for EPM is based on a combination of the new Group Reporting product for consolidations and SAP Analytics Cloud (SAC) for planning and budgeting.  SAP Group Reporting and Analytics Cloud for Planning requires that customers move to S/4 HANA Cloud for their ERP.  

To give customers enough time to transition to SAP S/4HANA for group reporting, SAP decided the following:

• SAP will provide mainstream maintenance for SAP BFC 10.1 until December 31, 2027.
• Considering SAP BFC solution maturity, SAP plans to end any new functional investment in this solution and consequently plans no new release or support packages for SAP BFC 10.1.
• The Customer Influence website for SAP BFC will be removed due to the discontinuation of future innovations for this solution.

Those decisions leave customers at risk.  So if your organization uses Cartesis/SAP BFC, you have three choices:

• Choice 1:  Continue with legacy Cartesis/SAP BFC until support ends.
• Choice 2:  Invest in SAP’s unproven next-generation products, such as Group Reporting, Analytics Cloud, Central Finance or some variant hybrid strategy.
  • Requires at least one S/4 HANA Finance instance for Group Reporting.
• Choice 3:  Take control of your Finance Transformation by evaluating alternate EPM strategies such as OneStream.

To learn about those alternate strategies, make sure to tune in for our next blog in this series, in which we’ll examine the choices in more detail.

Learn More

Ready to join the organizations that have taken the step from Cartesis/SAP BFC to OneStream?  Check out our video here, and be sure to visit our website.

Watch the Video

Scenario planning is a valuable tool for businesses looking to prepare for the unexpected, but creating accurate scenarios can be a complex and time-consuming process. Traditionally, these exercises required substantial iterative cycles and were very manual.

That’s where artificial intelligence (AI) and machine learning (ML) forecasting come in – these technologies can help businesses power their scenario plans with more accurate and reliable data, allowing them to make better-informed decisions and stay ahead of the curve.

Powering Scenario Plans with AI & ML Forecasts

Scenario planning involves creating multiple possible futures for a business, considering a range of different variables such as market trends, consumer behavior, and technological advancements. The process typically involves identifying key drivers of change, developing a range of plausible future scenarios, and assessing the potential impact of each scenario on the organization.

The goal is to identify potential risks and opportunities and prepare accordingly rather than simply reacting to events as they happen. Scenario planning can help organizations make more informed decisions by enabling them to anticipate potential future events and develop strategies to mitigate risks and take advantage of opportunities. (see figure 1)

Scenario planning involves creating multiple possible futures for a business, considering a range of different variables such as market trends, consumer behavior, and technological advancements. The process typically involves identifying key drivers of change, developing a range of plausible future scenarios, and assessing the potential impact of each scenario on the organization.

While scenario planning can be a powerful tool, creating accurate scenarios can be a challenge. Traditional scenario planning methods can be time-consuming and challenging to execute. One of the main challenges is forecasting. Forecasting involves predicting future events, such as changes in consumer behavior, market trends, and technological advancements.

Traditional forecasting methods often rely on historical data and expert opinions, which can be unreliable and may not reflect current market conditions or emerging trends. Additionally, traditional forecasting methods may not account for the complex interrelationships between different factors that can influence future events. It’s difficult to predict exactly how different variables will interact, and human biases can creep in, leading to scenarios that are overly optimistic or pessimistic.

That’s where AI and ML forecasting comes in.

The Role of AI and ML in Scenario Planning

Advances in AI and ML have made it possible to enhance scenario planning by providing more accurate and reliable forecasts. AI and ML can analyze vast amounts of data and identify complex patterns and relationships between different factors. This can enable organizations to develop more sophisticated and accurate forecasts that reflect current market conditions and emerging trends.

By incorporating AI and ML forecasting into scenario planning, businesses can create more realistic and useful scenarios, helping them to make better-informed decisions and stay ahead of the curve.

Data analysis

AI and ML can help organizations analyze large amounts of data and identify patterns and trends that are not visible to humans. This can provide insights into potential future scenarios and help organizations prepare for them.

Use Case: Enrich Data to Identify Patterns

AI and ML can be used in scenario planning by incorporating external data sources, such as social media, news articles, and weather forecasts to help understand to what extent these factors correlate with forecast performance.  By analyzing these sources in real time, organizations can identify emerging trends and adjust their scenarios accordingly. (see figure 2)

For example, a manufacturer might use AI to analyze social media conversations about its products and identify emerging customer preferences. By incorporating this information into its scenarios, the manufacturer can adapt its product development and marketing strategies to meet customer needs better.

Prediction

AI and ML can be used to predict future outcomes based on historical data. This can help organizations identify potential future scenarios and make informed decisions about how to respond to them.

Use Case: Predicting Consumer Behavior

One key variable in many scenarios is consumer behavior. Businesses need to understand how consumers will respond to new products, changes in pricing, and other factors in order to make informed decisions. AI and ML forecasting can be used to analyze consumer data and predict how consumers will behave in the future. This information can be used to create more accurate scenarios and identify potential risks and opportunities. (see figure 3)

For example, consider a retail company that is considering launching a new product. By using AI and ML forecasting to analyze consumer data, the company can predict how many units of the product it’s likely to sell in different scenarios. This information can be used to create different sales forecasts for different scenarios, allowing the company to prepare accordingly.

Simulation

AI and ML can be used to create simulations of potential future scenarios. This can help organizations understand the potential impact of different decisions and prepare for them accordingly. (see Figure 2)

Use Case: Forecasting market trends

Market trends are another important variable in scenario planning. Businesses need to understand how the market is likely to change in the future in order to make informed decisions. (see figure 4)

For example, consider a financial services company that is creating scenarios for the next five years. By using AI and ML forecasting to analyze market data, the company can predict how interest rates, inflation, and other key variables are likely to change over that time period. This information can be used to create different economic scenarios, allowing the company to prepare accordingly.

Optimization

AI and ML can be used to optimize scenarios by identifying the most likely outcomes and helping organizations prepare for them. This can help organizations be more effective in their scenario-planning efforts.

Use Case: Predicting Supply Chain Disruptions

Supply chain disruptions can have a significant impact on businesses, especially those that rely on just-in-time inventory or complex global supply chains. AI and ML forecasting can be used to analyze supply chain data and predict where disruptions are most likely to occur. (see figure 5)

For example, imagine a manufacturing company is creating scenarios for the next year. By using AI and ML forecasting to analyze supply chain data, the company can predict where disruptions are most likely to occur – for example, due to natural disasters or political unrest. This information can be used to create different scenarios for supply chain disruptions, allowing the company to prepare accordingly.

In each of these examples, AI and ML forecasting allows businesses to create more accurate and realistic scenarios, helping them to make better-informed decisions and stay ahead of the curve.

Conclusion

AI and ML technologies have been a catalyst for organizations to relook at how they leverage scenario plans, the pace at which they plan decisions, and the data they use to make those decisions. Customers can overcome the tedious and time-consuming scenario planning by enriching the process with AI and ML solutions by providing faster, more accurate and reliable forecasts.

Learn More

To learn more about how FP&A teams are moving beyond the AI hype to enrich scenario planning, check out our white paper, Sensible Machine Learning for CPM – Future Finance at Your Fingertips.

Download the White Paper

Machine learning (ML) has the potential to revolutionize Enterprise Performance Management (EPM) by providing organizations with real-time insights and predictive capabilities across planning and forecasting processes.  With the ability to process vast amounts of data, ML algorithms can help organizations identify patterns, trends and relationships that would otherwise go unnoticed.  And as the technology continues to evolve and improve, even greater benefits are likely to emerge in the future as Finance leverages the power of ML to achieve financial goals.

Join us as we examine Sensible ML for EPM – Future of Finance at Your Fingertips.

The Shift to Intelligent Finance

For CFOs, whether artificial intelligence (AI) and ML will play a role across enterprise planning processes is no longer a question.  Today, the question instead focuses on how to operationalize ML in ways that return optimal results and scale.  The answer is where things get tricky.

Why?  Business agility is critical in the rapidly changing world of planning.  To think fast and move first, organizations must overcome challenges spanning the need to rapidly grow the business, accurately predict future demand, anticipate unforeseen market circumstances and more.  Yet the increasing volumes of data across the organization make it difficult for decision-makers to zero in on the necessary data and extrapolate the proper insights to positively impact planning cycles and outcomes.  Further exacerbating the problem, many advanced analytics processes and tools only leverage high-level historical data, forcing decision-makers to re-forecast from scratch whenever unforeseeable market shifts hit.

But with AI and ML, business analysts can analyze and correlate the most relevant internal/external variables.  And the variables then contribute to forecasting accuracy and performance across the Sales, Supply Chain, HR and Marketing processes that comprise financial plans and results.

Those dynamics underscore why now is the time for Intelligent Finance.

Over the coming weeks, we’ll share a four-part blog series discussing the path toward ML-powered intelligent planning.  Here’s a sneak peek at the key topics in our Sensible ML for EPM series:

• Part 1:  4 Driving Forces for Change.  These forces have the potential to accelerate ML and move organizations away from descriptive and diagnostic analytics (explaining what happened and why) and toward predictive and prescriptive analytics
• Part 2:  Increase Accuracy and Transparency.  Today more than ever, organizations are looking to become more agile, accurate and transparent with their financial plans to stay competitive.  And Sensible ML can help.  It allows input from users closer to the business to infuse business intuition into the model, which can increase accuracy and ensure all the available information is considered. (see figure 1)

• Part 3:  Key Capabilities for Intelligent Planning.  Sensible ML is unlike “most” predictive analytics forecasting capabilities (looking at prior results and statistics and generating forecasts based on what happened in the past).  Specifically, Sensible MLhas the capability to not only look at prior results but also then take on additional business intuition – such as events, pricing, competitive information and weather – to help drive more precise/robust forecasting.
• Part 4:  Customer Success Stories.  Every customer must be a reference and a success.  OneStream’s mission statement drives everything we do.  Taking a deeper look into customers who have reaped the benefits of leveraging Sensible ML can help any organization gain true predictive insights.

Regardless of where you are in your Finance journey, our Sensible ML for EPM series is designed to share insights from the experience of OneStream’s team of industry experts.  We recognize, of course, that every organization is unique – so please assess what’s most important to you based on the specific needs of your organization.

Conclusion

The aspiration of ML-powered plans is nothing new.  But to remain competitive amid the increasing pace of change and technology disruption, Finance leaders must think differently to finally conquer the complexities inherent in traditional enterprise planning.  ML has the potential to greatly improve EPM by providing organizations with real-time insights and predictive analytics.  However, organizations must overcome challenges (e.g., ensuring good data quality and selecting the right ML algorithm) to achieve success.  As ML continues to evolve, increasingly more organizations are likely to leverage its power to drive better financial and operational outcomes.

Several challenges lie ahead for organizations of all sizes, but one of the most important decisions will be implementing the right ML solution – one that can effectively align all aspects of planning and elevate the organization toward its strategic goals.  Sensible ML answers that call.  It brings power and sophistication to organizations to drive transparency and increase the velocity of forecasting processes with unprecedented transparency and alignment to business performance.

Learn More

To learn more about the value of Sensible ML, download our whitepaper titled “Sensible Machine Learning for CPM – Future Finance at Your Fingertips” by clicking here.  And don’t forget to tune in for additional posts from our machine learning blog series!

Download the White Paper

There’s been a debate brewing for years in the enterprise performance management (EPM) software market about what’s the best way to deliver the functionality required to support the various EPM processes.  The debate centers around whether customers are better served by a unified EPM platform or by best of breed applications designed to support specific processes such as financial consolidation, reporting, planning and forecasting.  At the heart of this debate is also the question about what’s more important in EPM software – control or flexibility? What if you could have both in a single product?  Read on to learn more.

Taste Great vs. Less Filling

Remember the Miller Light beer commercials from the 1970’s when the product was first introduced? The premise behind them was that most beer-drinkers believed that a low-calorie beer sacrificed taste, then Miller came along and dispelled the myth with their product which “tasted great” and was also “less filling.” There’s a similar debate “brewing” in the EPM/CPM software industry regarding best of breed applications vs. unified platforms.

The main focus of the EPM debate has been financial consolidation and reporting vs. planning, budgeting and forecasting.  The financial consolidation and reporting process requires control and accuracy, while planning, budgeting and forecasting requires the flexibility to budget, plan and forecast at different levels of detail than the actual financial results.  And furthermore, this level of detail can vary based on the planning process (strategic vs. financial vs. operational) and line of business.  The camp that favors the best of breed approach believes that the control required to deliver fast and accurate consolidated financial results hinders the planning and forecasting process, and vice versa. But is this really true?  The answer is that it depends on the architecture of the software.

Best of Breed Applications and Fragmentation

Several EPM vendors have chosen to deliver a fragmented set of best of breed applications (see figure 1) to support processes such as financial close and consolidation, reporting and various types of planning.  These vendors claim that each of these processes requires a dedicated application that’s optimized to provide either the control or flexibility required by the application.  The problem with this approach is that every organization has the need to compare their actual, book of record financial or operating results against their budgets or forecasts in order to identify and analyze variances. 

With a fragmented suite of applications, this requires users to move data from the financial consolidation application to the planning application, or vice versa, or to yet another application where the data can be aligned for reporting and analysis.  And in addition to spending a lot of time moving data around, the users must maintain and update metadata in multiple applications as new accounts, departments, locations, or products are added to the business. 

For example, what happens when your business changes via re-orgs, acquisitions, or divestures? The answer is you need an army of consultants or admins to realign systems, metadata, data and reports to ensure all users are seeing the same definition of net income for example. Having multiple systems means that there is a data reconciliation effort just to try to ensure common definitions. This tax on your systems and resources means they can’t attack other business problems.

Some of the cloud-based vendors in the market offer point solutions that support only specific EPM processes, such as enterprise planning or account reconciliations.  The cloud-based planning software vendors claim their software is optimized for this process and that consolidation and reporting should be handled in a separate application.  Again, the problem here is that customers need to be able to compare actual book of record financial and operational results against the budgets or forecasts to identify and analyze variances.   So the users end up having to extract the actuals, budgets and forecasts out of their respective applications and into Excel spreadsheets or some other system for comparative reporting. 

Another problem is that some cloud-based planning software vendors provide planning platforms that include no pre-built financial intelligence – it must all be built from scratch.  While this approach might work for supporting only operational planning processes, it doesn’t work for linking operational plans to financial plans and forecasts.  This linkage of financial and operational plans is a key market requirement and the essence of what’s now being referred to as eXtended Planning & Analysis (XP&A).

OneStream Provides Control and Flexibility in a Single Application

Now that we have identified the complexities that are created for users by fragmented EPM suites or best of breed planning solutions the question is – can a single unified EPM/CPM application provide both control and flexibility? Is it possible to have a single application that provides the control and accuracy needed to support the complex financial consolidation needs of global enterprises, as well as the flexibility to support financial and operational planning, budgeting and forecasting. The answer is yes – and that’s the essence of OneStream. 

OneStream provides a unified, Intelligent Finance Platform (see figure 2) with a modern architecture designed to provide accuracy and control as well as flexibility in a single application.  One of the secret sauces behind this is something called Extensible Dimensionality®.  This is essentially the ability of the system to support corporate standards, such as the corporate chart of accounts (COA), while providing relevance for operating units.  This means the corporate COA can be extended to support the more detailed reporting and planning requirements of various business units without impacting the corporate standard.

The other secret sauce is the multiple calculation engines within OneStream’s Intelligent Finance platform. This includes a world-class financial consolidation engine, as well as an aggregation engine designed to rapidly roll up budgets, plans and forecasts that don’t require the same precision and audit trails as book of record financial results.  The beauty of this approach is that the data for all these processes resides in a single data store, providing a single version of the truth for actuals, plans, forecasts and other corporate data.

In addition, a unified application means all processes are aligned with a single point of change, so solutions are always in alignment without manual reconciliation efforts. This single point of changes gives OneStream customers the agility needed to conquer the complexity of business changes. This unique capability is what allows OneStream to replace multiple legacy applications with a single, unified platform.  That platform provides the control to support fast and accurate financial close, consolidation and reporting – while also providing the flexibility to support agile budgeting, planning and forecasting across the enterprise.  And this unified approach makes it very easy for users to compare actual financial and operating results with budgets and forecasts – at whatever level of detail is required, without moving data between applications.  It provides a single version of the truth for actuals as well as strategic, financial and operational plans, budgets and forecasts.

Proof is in the Pudding

Does this approach really work? You bet it does. How do we know that? Because over 80% of OneStream customers use the platform to support their financial consolidation, reporting and planning processes, as well as other tasks such as account reconciliations, transaction matching, tax provisioning, profitability analysis, ESG reporting and other tasks. Here’s one example below.

SPX Corporation had been using their prior EPM application suite for 18 years. SPX was using separate solutions for data loads, consolidations, planning and forecasting and account reconciliations. They had also built their federal tax provision process into their consolidation solution and had built flash forecasts, bridge reporting and state tax provisioning in their planning applications.

This multi-product approach to their critical financial applications created challenges for the Finance and IT teams. According to Keith Chapman, Director of IT for Corporate Applications, “Just keeping all the data and metadata in sync was challenging — given all of the changes in our organization structure with acquisitions and divestitures. The end-users were constantly moving and reconciling data. There was no single version of the truth, and reporting was siloed and fragmented. From an IT standpoint, it was a lot of work maintaining and upgrading the applications, and we also used managed services to keep the products running.”

Since moving to OneStream, the SPX team has experienced many benefits from having one unified platform for actuals, plans, forecasts, tax and account recons. This makes life much easier for users in terms of loading data, reviewing and drilling into the data staging area for the details.

According to Chapman, “OneStream has provided a huge benefit in keeping everything aligned with automated control procedures in place, so when business changes happen, we can keep up. Tax and FP&A are no longer separated; actuals can be seeded into budgets; and we are no longer waiting for overnight processes. The tax team can leverage the roll-forward data from consolidation right into the tax solution. Users enter the data once, and it is leveraged across multiple processes.”

Said Chapman, “We also leverage OneStream’s Extensible Dimensionality®. This allows us to do corporate cost forecasting in the same application, at lower level of detail than our normal forecast — very easily. It’s all about offering solutions to the business and delivering rapid value. Instead of being viewed as a corporate application, OneStream is a platform; it adds value and continues to add value by providing timely insights.”

Learn More

Having the control required to produce an accurate and auditable book of record financial results as well as the flexibility to plan and forecast at the right level of detail is essential for success in EPM or CPM software.  And although some vendors are promoting the myth that both control and flexibility can only be provided through separate applications – OneStream has proven this myth is false, just like Miller beer, with a platform that “tastes great and is also less filling.”  We have successfully delivered a unified platform that supports financial consolidation, reporting, planning and forecasting for more than 1100 organizations globally.  To learn more, check out our Intelligent Finance white paper and contact OneStream if your organization is ready to take the leap to a modern, unified platform that can support all your EPM/CPM processes.

Download the White Paper

Artificial intelligence (AI) and machine learning (ML) have revolutionized many industries, but the field of financial planning & analysis (FP&A) has been slow to adopt this technology.  Despite the numerous benefits AI – and more specifically, ML – can bring to Finance (e.g., increased efficiency, accuracy and strategic insights), many organizations still hesitate to implement either in their FP&A processes.  What’s holding FP&A back from reaping the vast benefits of ML?

To answer this question and more, this blog will explore some of the challenges holding FP&A back from fully embracing ML and how those challenges can be overcome.

Market Appetite for ML

While not yet as widely accepted as the move to the cloud for the financial close and planning processes, ML adoption is already increasing, according to the 2022 Data Science and Machine Learning Market Study by Dresner Advisory Services.  In 2016, less than 40% of responding organizations reported using or actively exploring ML.  That same metric was about 70% in 2022 (see Figure 1), showing a steady increase over the last seven years.  On the surface, that progression underscores the AI hype and excitement for the potential benefits of using AI for FP&A.

But what happens if the data gets broken down by function?  A bit of a different reality emerges for the Office of Finance and FP&A.

In fact, the study shows that only 20% (see Figure 2) of Finance organizations are currently using AI and ML, and Finance actuals lag most functions, despite all the buzz and chatter out there.

What’s Holding FP&A Back?

With so much buzz yet low adoption, what key barriers are holding FP&A and Operations teams back from mainstream adoption of ML solutions?  Figure 3 depicts the barriers.

Below, the details about these key barriers show why they’re preventing widespread implementation of cutting-edge ML technologies:

Lack of Expertise

• FP&A teams can struggle to deploy ML in enterprise planning processes, such as rolling forecasting or demand planning, due to lacking the required expertise in ML and machine learning modeling techniques.  Without dedicated business analysts and data science engineers, teams cannot realize the full potential of ML in planning processes.  
• A lack of expertise is especially relevant for organizations with existing ML investments, where the lack of specialized resources hinders the ability of FP&A teams to effectively utilize ML in their work.  Without dedicated expertise or resources, FP&A teams are severely limited in their ability to take advantage of AI and ML.

Lack of Scale

• For organizations with existing data science teams, creating repeatable and systematized ML processes and infrastructure across the enterprise is expensive.  Additionally, most ML capabilities within CPM tools today are only capable of producing a single forecast (target) at a time.  Why does that matter?
• FP&A’s role is to lead and drive effective planning processes across lines of business and functions (e.g., HR, Sales and Operations).  And if unable to empower the organization to forecast at scale, FP&A is not executing as a strategic business partner.  AI solutions for FP&A that cannot scale are no different and will never reach mass adoption, causing the solutions to ultimately fail.

Lack of Business Intuition & Transparency

• Traditional ML modeling processes within CPM tools are often a “black box” to FP&A teams (see Figure 4).  Why does this matter?  Well, ML modes aren’t complete without material business “intuition” and/or offer users only limited visibility or traceability into model inputs and results.  Such limitations can result in a lack of trust or confidence in the results.

As a strategic business partner, FP&A must instill confidence in forecasting processes.  And while leveraging AI and ML is likely to increase forecast accuracy, P&L owners cannot assess the drivers that comprise forecasts – P&L leaders who can’t will never own their forecasts.

And if P&L owners don’t own their forecasts, forecasting processes break down and fail altogether.  That means FP&A has failed too.

Fragmented & Disconnected Processes

• Current AI and ML solutions within CPM typically require data movement and reconciliation between fragmented systems and Finance processes.  Those requirements increase the technical debt and limit the ability for advanced analytics to scale across the organization.
• The fragmented software and technical processes needed for connected planning create added technical complexity and administrative burden for FP&A teams.  This burden includes constantly moving and reconciling data, monitoring data latency, and managing security between fragmented products or models.  Collectively, the burden dilutes the ability of strategic FP&A teams to focus on driving performance and supporting critical decision-making.

Conclusion

Despite these challenges, ML has the potential to significantly improve Finance operations and outcomes.  By automating manual processes, ML can help Finance professionals save time and improve accuracy, which can lead to more effective decision-making.  Additionally, ML can provide real-time insights into financial performance.  Those insights can then help Finance professionals identify trends and make informed decisions.

As AI and ML for FP&A enter the mainstream, organizations will undoubtedly have several choices to consider.  On one spectrum, solution vendors for AI (see Figure 5) are offering everything from AI infrastructure solutions to data science toolkits and complete AI platforms to create and deploy ML models.  While these are powerful tools addressing varying use cases, the tools aren’t designed for FP&A teams.

Corporate performance management vendors are also investing in AI capabilities to support extended planning & analysis (xP&A) processes such as demand planning and sales planning.  As Figure 5 illustrates well for AI vendors, CPM vendors will also solve their customers’ AI needs in different ways.

So then, what’s the lesson in all this?

Don’t let AI hype cloud the evaluation process.  Start with a clear understanding of “what” business outcomes the FP&A team is trying to achieve with ML.  Identify “who” is using the solution and “how” the solution is unified into existing planning processes.

And with answers to these questions in mind, use the evaluation process to “get under the hood” to learn whether the solution will unleash the organization from the key barriers holding FP&A back from moving beyond the hype.

Learn More

Want to learn more about how FP&A teams are moving beyond the AI hype?  Stay tuned for additional posts from our blog series, or download our interactive e-book here.

Download the eBook

Continued uncertainty and a rapidly changing business environment have forced businesses to be agile and rethink their approach to budgeting, planning and reporting with greater pressure to run lean finance teams. Finance leaders are turning to corporate performance management (CPM) technology for faster, more accurate planning and reporting capabilities. This technology allows organizations to better manage their budgets, with the ability to pivot based on any variances, as well as perform frequent forecasts in response to economic changes.  CPM software also enables organizations to streamline financial close, consolidation and reporting for a more timely and accurate picture of the business. It is through this lens that Nucleus Research published its 2023 Value Matrix for CPM Software, highlighting key market trends and ranking the top 19 vendors. Read on to learn more about the report’s findings and how OneStream was positioned in the market.

CPM Software Helps Organizations Power Through Uncertainty

For the past several years, businesses have been facing pressure from geopolitical risk, economic uncertainty, supply chain disruption, volatile markets and more. The demand for CPM solutions remains high as organizations seek to enhance their planning and reporting capabilities amid these rapidly changing external market factors and greater pressure to run lean finance teams, according to the 2023 Nucleus Research CPM Technology Value Matrix that published in late January.

The report stated, “Nucleus found that a CPM solution’s most significant benefit is helping businesses protect their cash positions, which is vital in a market downturn. Organizations leverage their CPMs to consolidate financial information for a bird’s eye view of their finances, enabling accurate cash and expense projections. With a real-time view and continuous forecasting, businesses can better manage budget variances, and managers can better adhere to their spending guidelines. Since non-finance department heads can leverage a CPM solution, they can provide input to budgets and update their spending for alignment across finance, sales, marketing and operations.”

Nucleus Research makes the case for CPM technology to drive organizational alignment instead of point solutions or fragmented systems, highlighting that the breadth of functionality across CPM platforms enables integrated business planning (BP) initiatives which allows departments outside of finance to participate in budgeting and planning for continuous organizational alignment.

Whereas other IT industry reports evaluate financial planning software separately from financial close and consolidation solutions, Nucleus Research evaluates vendors on both of these core processes arguing that a single platform that supports both provides a higher level of business value compared to point solutions. Additional key trends highlighted by Nucleus Research in the report include:

• CPM vendors are focusing development on analytics, either developing or embedding these capabilities within their platforms so users can build dashboards and visualize information without data scientists or requesting IT for specific configurations.
• Artificial Intelligence (AI) and Machine Learning (ML) enabled modeling continues to be a development priority for vendors as users have realized increased forecast accuracy and automation benefits.
• ESG reporting and planning modules templates are beginning to be introduced within solutions. ESG functionality is expected to be common stakes within the CPM market moving forward.

Diving Into the CPM Value Matrix

The 2023 CPM Value Matrix report evaluated the top 19 CPM software vendors based on their usability and functionality as well as the value that customers realized from each product’s capabilities. According to Nucleus, the research is intended to serve as a snapshot of the CPM technology market, to help inform customers about how vendors are delivering value and take stock of what can be expected in the future based on present investments.

What other insights did the 2023 CPM Value Matrix report reveal? This year’s report recognized OneStream as a Leader in the CPM Value Matrix – making 2023 the sixth consecutive year OneStream has earned this recognition. (see figure 1)

Here’s what the analysts had to say about OneStream in the report:

“OneStream is recognized as a Leader in the 2023 CPM Technology Value Matrix for its comprehensive CPM platform, delivering capabilities for financial close and consolidation (FCC), budgeting, forecasting, reporting, and analytics. It also includes built-in capabilities for data integration and validation, workflow automation data visualization, as well as operational analytics and reporting to extend customer value and decision analysis capabilities. This unified approach enables customers to replace multiple legacy applications and cloud point solutions so finance teams spend less time managing data and systems and more time performing value-added analysis supporting decision making.”

Figure 1 – Nucleus Research CPM Value Matrix 2023

Learn More

Our continued recognition as a Leader in the Nucleus Research CPM Value Matrix is a testament to the capabilities we provide and the value users gain from OneStream’s unified platform. By streamlining complex financial processes and unifying financial and operational data through one platform, users are able to turn data into actionable insights and spend more time on value-added activities and analysis. In today’s rapidly changing economy, business leaders need near real-time insights to support agile decision-making at the speed of business. We are investing to expand the capabilities of our platform and deliver new solutions that will continue to provide exponential value to our customers.

To learn more, download a copy of the 2023 Nucleus Research CPM Value Matrix report here.

Download the Analyst Report

Global organizations are challenged now more than ever with the need to remain flexible and agile in today’s rapidly changing business environment. A strong foundation of transparent, accessible data is key – especially when facing frequent merger and acquisition (M&A) activity requiring detailed, complicated and time-consuming transactions.

Organizations need a unified corporate performance management (CPM) platform to stay nimble during these complex transactions and to ensure accuracy across financial close, consolidation, reporting and analysis. Faced with these challenges, Ingeteam decided to replace their outdated Oracle HFM and Essbase system to gain transparency in their data and unify their complex, outdated processes. Learn more about how Ingeteam selected the right CPM software for the job below.

Igniting Finance Transformation in a Global Technology Company

Ingeteam is an international technology company specializing in the conversion of electrical energy. Ingeteam operates globally and has permanent sites in 24 countries, with more than 4,000 employees.  Its technological development in power and control electronics, rotating electrical machines, systems and operation and maintenance services, enables it to offer solutions for the wind, photovoltaic, hydroelectric and fossil generation sectors, the metal processing industry, the shipbuilding industry, railway traction and the electricity grid, including substations covering transport and distribution, that are always looking for more efficient energy generation and consumption.

Driving Efficiency Through Unification

Ingeteam was using Oracle Hyperion Financial Management (HFM) and Essbase for financial consolidation and reporting, but the systems were not keeping up with Ingeteam’s rapidly-changing business requirements, such as recurrent business mergers, acquisitions and splits. Ingeteam decided to embark on finance transformation and implement a new solution to streamline the company’s complex financial processes and improve visibility and traceability of data for their reporting requirements for legal and management purposes.

Ingeteam needed to optimize the company’s existing data model, which was complex and contained many analytical dimensions, including some that were obsolete or had been reused for the new reporting purposes required. Additionally, the financial team also needed more autonomy to manage processes and master data. According to Aitor Barrondo, Global Accounting, Audit & Controlling Director at Ingeteam, “Ingeteam is a very dynamic company, hence the need for a more powerful and flexible platform that is easier to manage. After several sessions of contrasting needs with the potential of OneStream, Ingeteam were sure that they could achieve what they needed with OneStream and Nova, and they could also incorporate complementary solutions through the OneStream MarketPlace at no additional cost.”

Implementing OneStream to Conquer Complexity

The selection process for a new solution was proposed as a joint project of the Management Systems and Administration & Finance Departments at Ingeteam. Together, the teams analyzed various CPM platforms with the help of its partner, Nova, for its high degree of knowledge of Hyperion/HFM and expertise in the industry. When OneStream was first presented to Ingeteam, the company was challenged by the lack of references in the market as this project would be OneStream’s first implementation of financial consolidation in Spain. Ultimately, OneStream proved to be the best platform to handle Ingeteam’s complex requirements and with Nova as a OneStream certified partner, their passion and focus was compelling to Ingeteam and their future growth plans.

Said Barrondo, “Ingeteam is a very dynamic company, hence the need for a more powerful and flexible platform that is easier to manage. After several sessions of contrasting needs with the potential of OneStream, Ingeteam were sure that they could achieve what they needed with OneStream and Nova, and they could also incorporate complementary solutions through the OneStream MarketPlace at no additional cost.”

Unification with a Modern CPM Platform

OneStream has enabled Ingeteam to redesign and simplify their complex financial processes, unifying data management and automating manual, unnecessary processes within a streamlined, user-friendly system. Whereas users previously needed IT skills to analyze large volumes of data and extract historical data, with OneStream users can independently analyze information and view the source of the data easily at their convenience.

Financial consolidation processes have also been simplified, with a significant reduction in consolidation adjustments. Monthly calculations of the different target scenarios, forecasts and the extrapolation of monthly reporting that were previously performed in Excel are now integrated and standardized, avoiding the need for external calculations.

Data visibility has also improved through the dashboards developed in OneStream. Ingeteam reduced the manual maintenance of structures by integrating the maser data management with its systems for agile and automatic maintenance of the client structure. Users now are able to customize access to information based on the different user profiles. With OneStream, Ingeteam’s analytics are more advanced and provides access to the insights, efficiencies and improvements that the platform has brought to users’ daily lives.

Looking Ahead

The OneStream MarketPlace has allowed Ingeteam to extend their investment with targeted solutions that can be downloaded, configured and deployed within minutes.

“Thanks to the OneStream MarketPlace Parcel Service application, Ingeteam is able to launch all the reports for the month in just a few seconds, generating 90 documents in a few minutes, with all the KPIs of the Scorecard, for each entity, business, sector and segment. This is something that previously required the maintaining of a host of Excel templates, version management, and customizing the members that made up each structure, in a manual and inefficient process”, said Barrondo.

Learn More

To learn more about Ingeteam’s journey from Oracle Hyperion to OneStream, check out the case study and discover how OneStream streamlined the global company’s complex financial processes. If your organization is ready for a finance transformation, contact OneStream today.

Download the Case Study