enterprise planning for the retail industry
DESCRIPTION
In the new economic reality, retailers need to plan for the short and long-term. However, most organizations fall short of comprehensive Enterprise Planning due to a combination of inadequate tools and siloed processes. Learn how Hyperion Strategic Finance can be deployed to seed operational plans with strategic targets as well as receive the latest forecasts from Planning and Essbase. In addition to integrating the short and long-range planning processes, we will also discuss how true Enterprise Planning should utilize the same reporting toolset to integrate and enhance analytical and reporting capabilities in the planning process.TRANSCRIPT
Enterprise Planning for the Retail Industry
Ricardo Rasche
HSF Practice DirectorEdgewater Ranzal
Tel. 312-810-0685Session ID#8121
Agenda
• Introduction
• Hyperion Strategic Finance Overview
• Customer Cases
• Product Demonstration
• Questions & Answers
1996 700+/1000
Focus
Services
People
Methodology
Customers
Partnership
The Ranzal HSF Practice
• Established through recent acquisition of Meridian Consulting Int’l
• Practice directors with over 35 years of combined experience in HSF and over 150 successful HSF engagements
• Corporate finance domain experts on Financial Modeling for Long Term Planning, Scenario Modeling, Funding, Valuation, and M&A
• Extensive experience integrating with Hyperion Enterprise, HFM, Hyperion Planning as well as extending HSF capabilities with Crystal Ball and Essbase
2007
Best Use of CapitalGlobal Growth
High Leverage
Commodity Prices UP
Stock Market Boom2008
SurvivalCredit Crunch
Housing Bubble
Global Recession
Stock Market Crash
Bankruptcies
2009-10
RecoveryCorporate Cost Cutting
Strengthen Balance Sheet
Easing of Credit Markets
Economic Stimulus
Slow
Growth?
Strong
Recovery?
Another
Recession?
?
+ Capital Structure Assumptions
+ Debt Detail, Dividends
Strategic Plan
+ Acquisitions
- Divestitures
Baseline Forecast
+ Initiatives
+ New Projects
Treasury Dept
Corporate Development
FP&A Group
CFO Office
Retail IndustrySolution
Consolidation of Stores and Regions
Modeling by Prod Category or Store Type
Forecasting Store Openings and Closings
Joint Ventures and New Projects
Mergers & Acquisitions
Divesting Unprofitable Stores and BU’s
Comp Sales Scenarios
What-If Analysis by Brand or Store Type
Evaluating New Store Concepts
Funding Requirements for NSO Growth
Debt and Covenant Analysis
Impact on Credit Rating
CorporateDevelopment
Long-TermPlanning
Ad-hocScenarios
FundingAnalysis
Yale University
Univ. of Vermont
Boston College
Stanford University
General Mills
ABG
SUNDAL COLLIER
Higher EdManufacturing
Life Sciences
Retail Metals / MiningUtilities Financial Services
Service Ind. / Miscellaneous
CPG High-TechHealthcare
Logistics
Telecom
Specialty retailer of consumer electronics with revenues of $45B
and 19% market share in the U.S. Also operates in Canada, Mexico,
China, and Turkey
Before
Technology
Hard to maintain Excel spreadsheets
Difficult integration of historical data
Business Need
• Consolidated 5-year plan for both
domestic and international businesses
• ROIC scenarios by product category
(for domestic) and country/brand (for
international)
After
Centralized model enabling strategy
discussions and target-setting at the
executive level (EVP’s, CFO)
Total company view with detail by
business unit, product category, country,
and brand.
Complete set of financial statements,
key metrics (incl. ROIC) at each level
Baseline, New Store Openings (NSO),
and incremental scenarios for new
initiatives
Canada’s largest independent tire dealer
Before
Technology
Time consuming Excel spreadsheets
Models lacked flexibility and
accounting integrity
Business Need
• Scenario capability around key drivers
such as new store openings and sales
growth rates by product or region
• Consolidated long-term plan
incorporating all major business
entities
After
Integrated financial statements that
allowed for scenario analysis on both
Income Statement and Balance Sheet
Ability to model new store additions and
the impact to financials year to year
Enhanced Inventory, A/R, and Fixed
Asset forecasting at each major
business level
Detailed ratios and covenants to
evaluate ongoing capital structure
Fast-food company with $2.5 Billion in revenues. Currently owned
by private equity firm 3G Capital of Brazil (late 2010)
Before
Technology
Large Excel spreadsheets
Difficult to maintain and audit
Business Need
• Prepare forecast scenarios for IPO
• More visibility into balance sheet and
cash flow forecasting
• Understand potential impact on
complex debt covenants
After
Able to understand financial impact of
B/S, CF drivers
Run scenarios around opening new
restaurants, royalty rate changes
Evaluate comp sales sensitivities
More visibility into the cash flow needs
of each market
Calculate impact and pressure-test
complex covenants
Product Demonstration
NEEDS ANDREQUIREMENTS
ANALYSIS
PLAN ANDDESIGN PHASE BUILD PHASE TEST PHASE
GO LIVE ANDROLLOUT SUPPORT
CUSTOMIZEDTRAINING
• Current state and stakeholder needs analysis
• Identify process, system, and organizational components
• Define a project roadmap
• Determine optimal level of detail and structure
• Design docs
• Detailed work plan with deliverables
• Construct templates and models
• Report / dash-board build-out
• Prototype reviews
• Develop data interfaces
• Upload test data
• User validation
• Calibrate models
• Document final process, system, org
• Develop easy to use reference guide
• Develop custom training and exercises
• Deliver user training
• Review Go Live Checklist
• Move solution into production
• Provide on-site support
• Semi-annual audits and process/model reviews
TYPICAL IMPLEMENTATIONAvg project takes 8-12 weeks to implement
Questions & Answers