How FP&A Can Win Executive Friends, Influence Corporate Strategy, and Improve Shareholder Returns 40% By Doing What They Do Anyway WEBINAR Translating Finance to Strategy

Agenda  The Strategy – Execution Gap  Finance at the Nexus  Common Challenges to FP&A  Translating Finance to Strategy  Calculating the ROI Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 2

Big thinking, marginal results Most companies allocate the same resources to the same business units year after year. That makes it difficult to realize strategic goals and undermines performance. Source: McKinsey & Company study (2012) Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 3

Strategy and targets are usually not linked Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 4

Execution isn’t easy Strategies are a lot easier to communicate than to execute Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 5

Agenda  The Strategy – Execution Gap  Finance at the Nexus  Common Challenges to FP&A  Translating Finance to Strategy  Calculating the ROI Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 6

Finance is expected to execute strategy Thanks. Great context for the budget. Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 7 How do I translate this into budgets which maintain continuity and fit into corporate targets?

We look for ways to reduce the gap Source: Gartner/FERF presentation at FEI Summit Leadership Conference, May 2013 CFO’s Know Technology to Support Decision Making is Inadequate Source: modified template from CPM Methods consulting engagement 2012 Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 8 …So we revert to what we know

Agenda  The Strategy – Execution Gap  Finance at the Nexus  Common Challenges to FP&A  Translating Finance to Strategy  Calculating the ROI Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 9

Guidance is usually too limiting Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 10 Leadership Business Units ---- Functions ---- Regions Finance Can you make me a slide that shows how this budget reflects our strategic goals? All budget requests should be within 3% Executive What’s the point?

Make guidance more specific Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 11

Data can be ambiguous Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 12 Leadership Business Units ---- Functions ---- Regions That’s okay, just do your best How confident are you in this assessment of our corporate goals? “4” means higher than average correlation Here is our consolidated outlook… “4” means strong correlation “4” means it is not a “5” We’re not sure how to provide scores to correlate with corporate goals?

Minimize ambiguity; maximize the systemic Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 13

Circumvention is too easy The gap makes it easier for strong business leaders to get supplemental budget, effectively widening the gap through end runs. Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 14 If I’m going to hit these revenue targets I need some margin relief and more budget I can probably find this in the corporate pot somewhere

Make sure end runs can be put in context Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 15

“Improvements” are incremental “Improved” Planning Tools, Business Intelligence Tools do not address the gap Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 16 Based on your improved analytics, here’s the new and improved corporate strategy presentation Thanks. Even better context for the budget Still not sure how I translate this into budgets which maintain continuity and fit into corporate targets?

Link strategic goals and budgets Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 17

Agenda  The Strategy – Execution Gap  Finance at the Nexus  Common Challenges to FP&A  Translating Finance to Strategy  Calculating the ROI Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 18

Bidirectionally translating finance and strategy Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 19

FPG is unique solution Construct Library Dashboard /Scorecard Modeling Preconstructed Queries BI, CPM, ERP Funding Profiles Feature Function Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 20 Strategy Visualized

Agenda  The Strategy – Execution Gap  Finance at the Nexus  Common Challenges to FP&A  Translating Finance to Strategy  Calculating the ROI Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 21

There is a material impact on the bottom line Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 22 Using Funding Profiles helped us gain actionable insight into our strategic plan and helped us bridge our long-range plan with our operating budget. Vice President of Finance and Investor Relations at Advent Software (NASD:ADVS) Companies that evaluate the performance of business units, acquire and divest assets, and adjust resource allocations based on each division’s relative market opportunities will be worth an average of 40 percent more after 15 years.

A typical ROI case Copyright © 2013 Funding Profiles. All rights reserved. Proprietary and confidential. | 23

Q & A

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