Growing Companies Challenged By Legacy Planning Tools

Olivia Berkman

Finance teams require a “single source of truth” in order to be accurate and predictive. But as companies grow, many are beginning to realize that existing tools rely on legacy systems that don’t communicate with each other. This leads to data quality concerns.

Ray Curbelo, AVP, Financial Planning & Analysis at Unum, told audience members at Anaplan’s HUB 2018 in Las Vegas that their new CFO was a catalyst for rethinking the planning process. “We had a new CFO come in and say, ‘You guys are spending way too much time on your planning process and I’m not getting the value out of what you’re doing. Let’s just focus on a really good annual planning process and let’s make that work before we try to do something every month or every quarter that I’m not seeing the incremental value for.’” When Curbelo got involved, the team realized that they weren’t able to provide the insightful analytics that their new CFO was looking for.

“What we were living in was a limiting infrastructure of our tools, the time that we had, and the analytics associated with it. The amount of hand-offs that we had, we were working in a 26-day planning process just to get to the plan that we could then start presenting to our CFO and our executive team. And then the iterations that came from it. There was always the question of if we make this change how long will it take to run through the system? That was always the number-one question.”

A recent survey by Grant Thornton and CFO Research found that 69% of senior financial leaders plan to increase their investment in technologies that speed business change. According to Anup Singh, executive vice president and CFO at Anaplan, the biggest challenge for these financial leaders lies in their planning processes. “The planning is a very fragmented process at the moment, across the enterprise. In financial planning and analysis (FP&A), you have certain applications. In sales, you have certain applications—marketing, supply chains, operations, IT. I had an interview with a customer this morning at a panel and he said at his company, he had 12 different planning applications across his enterprise. And they were all pretty much operating in silo environments. Nothing speaks to each other.”

As CFO at ZALORA Group, a growing e-retailer, Ruben Stappers dealt with similar challenges. “What is extremely difficult for us, and it takes us months, is to get all these inputs, and it’s all by Excel, and to build the P&L off it. It’s all bottom-up, because it’s part of our culture, it’s what we need because it’s just too complex, it’s too much to do centrally. But then we have our top-down guidance and targets. As it is all in Excel, to operationalize it between bottom-up and top-down is just not possible. Having my small FP&A team, it takes them three months at least, with a high-risk of them leaving at the end because there’s no FP&A person that really wants to work three months on a budget, in Excel, and then at the end within one month you need to do a refocus.”

Austin Call, finance manager at Infusionsoft, echoed the frustration. “Because of the phase we’re at in a growth company, everything’s always changing and our previous process of heavy Excel-based models and trying update those models on a regular basis, we were always behind.”

For a growing company like Infusionsoft, data management can become an exceedingly burdensome task. “We’re a relatively young, small company in the software as a service space. For our company size, we had a lot of different data sources and as our company’s grown, we keep buying more, adding it in. That was a big factor for us: how can we easily get data from all of our different systems and then how can we connect the models and have them talk to each other?”

According John Fitzpatrick, managing director at Blackstone, what many of these companies are struggling with is “technical debt.” The term refers to the code, data, and systems architectures that require burdensome support, do not easily integrate with other systems, and are generally painful to work on and expand. This can require ongoing support and maintenance, costly duplicative effort, and can decrease team morale. Fitzpatrick said, “Too often we make these short-term decisions and never go back and rectify it, and then that just compounds and compounds and compounds, and that’s where you can get into a lot of trouble.”

This article originally appeared in FEI Daily and is republished by permission.


Olivia Berkman

About Olivia Berkman

Olivia Berkman is the managing editor of FEI Daily, Financial Executives International’s daily newsletter delivering financial, business, and management news, trends, and strategies.