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Learning Objective

After participating in this event you will be able to:

• Define how to utilize mass data (internal and external) for better
decision-making

• Make better informed decisions by comparing your financial
performance against relevant peers

• Use leading indicators to anticipate changes in your company's
environment

• Reduce time and increase accuracy of recurring processes
requiring external data, like currency translation


THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

The Need for Speed: How to get data to make
great business decisions – Fast
Michael Huzinec
Director, Business Analytics, Baker Tilly

Background

• CPA, Finance & Accounting Degrees

• Business Intelligence & Corporate Performance
Management Field for over 15 years

• Exciting times in this area as information is exploding
and technology advances are presenting both
opportunities & challenges

2011 © Baker Tilly
Baker Tilly refers to Baker Tilly Virchow Krause, LLP an independently owned and managed member of Baker Tilly International.

Discussion Summary

• The Data Explosion & New Types of Information

• The Business Opportunities…and Challenges

• The Role of Finance in Driving and Managing the Opportunities

• Key Considerations & Creating an Information Strategy

2011 © Baker Tilly

The Data Tsunami
Overwhelmed with too much data?

“…40 exabytes
(1,073,741,824 gigabytes)
of data created in
2008…more than created in
the previous 5,000 years
combined…”
IBM Institute for Value

“Every 2 Days We Create As
Much Information As We
Did Up To 2003”
Eric Schmidt from Google

2011 © Baker Tilly

An Explosion In Volume…
…Variety, Velocity & Volatility

• It’s only going to get worse…
2011 © Baker Tilly

The Growing Data Sources

Core & Legacy
Internal Data

ERP
Data +
New Age External,
Internal,
Environmental &
Market Data

2011 © Baker Tilly

The Information Challenge Is Only Getting
Harder…

Scope & Size of Data Sets

Lack of Insight
1 in 3 managers frequently make
decisions without information they need
Volume of Digital Data

Complexity, Connectedness & Growth Rate
Inefficient Access
1 in 2 don’t have access to the information across their
organization needed to do their jobs
Variety of Information

Volume of Information & Velocity of Decisions
Inability to Predict
3 in 4 leaders say more predictive information
would drive better decisions
Velocity of Decision Making

Source: IBM Institute for Business Value
2011 © Baker Tilly

Leveraging Cloud & Other Technology to
handle the Data “Tsunami”
High

Create True Competitive Advantage
Increased in your market
Competitive
Relevance & • Maximize value from unlimited data
Advantage
Data Utilization

Impact available
• More data available to businesses of all
sizes
Status quo: Lower cost • Better tools, lower costs
In line with and increase • Mobile technologies
• Tools to crunch big data
market speed
• Memory, dasd, etc. virtually unlimited now
Low

• Need to get the decision makers the
right info at the right time in the right
High Low context
Resource Use

2011 © Baker Tilly

The business value of Leveraging
Information for Better Decisions

“Business analytics is the key to
enabling organizations to turn oceans $166B
of data into actionable decisions for a opportunity
competitive advantage.”
33% more 12x more 32% more
Revenue EBITDA ROIC
Profit Return on Invested
Growth Capital
Growth
12.5% 11.9%
9.4% 9.0%
7.3%
0.6%

Businesses that can effectively leverage information to drive better decisions and understanding
All other enterprises
Source: IBM Global Business Services, The Global CFO Study 2010
Revenue, EBITDA Growth: 5 yr CAGR (’04-08); ROIC: 5 yr Avg (04-08)
Data is provided for illustrative purposes and is not intended to be a guarantee of market opportunity.

2011 © Baker Tilly

Three examples of how companies can leverage
new information to make better decisions

Integrated and flexible solutions are
critical to creating competitive advantage
Manufacturing – Better Field Service & Production Decisions
 Leveraging machine diagnostic data to determine which parts of
machines in the field will or are breaking down
 Proactively service machines
 Don’t ship product with potentially defective parts

Financial Services – Better Investment Decisions
 Tracking all available data on investment decisions
 React faster and make better investment decisions based on alerts
and insight into what’s being said

Marketing– More targeted marketing spend & effectiveness monitoring ….All of these solutions
 Monitoring the effectiveness of events and campaigns focused on better
 Recruiting company advocates with social clout decisions impact the
budgeting and planning
processes.
2011 © Baker Tilly

Finance Challenges and Opportunities

Challenges: Old Finance

Too transaction focused … What are the
• Static Processes
• Traditional Reporting takes up the questions you could
majority of time
• Manually intensive Ad-Hoc and what if
answer with more
analysis relevant information, in
• Few integrated data sources available
for analysis a timely manner, that
• Little to no energy left for valued insights would make the biggest
…Little time to help drive insights and impact?
better decisions

2011 © Baker Tilly

Finance Challenges and Opportunities

Opportunities: New Finance
Apply the new technology capabilities to…
• Integrate ERP, CRM, CPM, BI, social technology, other
Ability to adjust plans
external and internal data sources quickly to new
• Focus on decisions which greatest impact information and
organizational goals insights is quickly
• Use of mobile devices (tablets, cell phones) becoming a must have
• Leverage enterprise social technology
• Use alert based technology to drive adjustments to for organizations to
plans and forecasts compete effectively

and ultimately drive improvements across
your organization… Consider…
A finance organization that can harness their role as keepers of
the data to continually support improving operations based on
better information and decisions
Source: IBM Global Business Services, The Global CFO Study 2010
Revenue, EBITDA Growth: 5 yr CAGR (’04-08); ROIC: 5 yr Avg (04-08)
Data is provided for illustrative purposes and is not intended to be a guarantee of market opportunity.

2011 © Baker Tilly

How Finance Can Help Drive an Information
Strategy and Better Business Results

• Roles and Responsibilities
• Define finance’s role in achieving business objectives and strategy
• Understand roles and responsibilities for decisions
• Information Requirements
• Identify all information requirements
• Push better data to the decision makers
• Plan to leverage information that may be collected
• Opportunities Roadmap
• Decisions possible with better faster information
• Use tactical quick hits with big opportunities
• Shift focus to more value driven activities

2011 © Baker Tilly

Key Considerations

1. Data available to all businesses sizes– CAN’T ignore it –
companies are already competing and winning with it
2. Technology costs have plummeted and capabilities are
now unlimited
3. Better information is available, quicker than ever before.
80% of new information will be non traditional formats
4. Leverage new technology platforms and previously
unavailable access to new data sources
5. Leverage benchmarking data to assess areas for process
improvement
6. Requires a structured way to think about / apply new
capabilities for turning information into better decisions

2011 © Baker Tilly

Creating an Information Strategy

… Consider if you could leverage the unlimited amount of data
to drive better and faster information into your organization to
ultimately make better decisions

Define Analytics Trusted Information
Information Platform

Information Strategy

2011 © Baker Tilly

Thank You


Polling Question


THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

Best Practices on External Drivers
Alex Ortiz, Director of Product Marketing,
Host Analytics

Agenda

• 5 Best Practices
• Historical Challenges and New Solutions
• 3 Case Studies in Using External Drivers


Best Practice #1:
Put In An Early Warning System


BP #2:
Use Leading Indicators

“Leading indicators extend the value of lagging indicators and provide a
mechanism for gaining competitive advantage. According to a Wharton research
study, companies that build and verify a set of leading indicators earn a 2.95%
higher return on assets and a 5.14% higher return on equity. Yet, less than
25% of companies attempt this.”

- Michael Smith, Analyst

Source: The Gartner Business Value Model: A Framework for Measuring Business Performance
Publication Date: 26 March 2010 ID Number: G00175097


& Use Economic Indicators
That Influence Your Co.
The ten components of The Conference Board Leading Economic
Index® for the U.S. include:

• Average weekly hours, manufacturing
• Average weekly initial claims for unemployment insurance
• Manufacturers’ new orders, consumer goods and materials
• Index of supplier deliveries – vendor performance
• Manufacturers' new orders, nondefense capital goods
• Building permits, new private housing units
• Stock prices, 500 common stocks
• Money supply, M2
• Interest rate spread, 10-year Treasury bonds less federal funds
• Index of consumer expectations


BP #3:
Compare Results Versus Peers

15% yr/yr rev. growth

Better or worse than peers?

Consider benchmarking with key financial ratios:
• Revenue growth rates
• R&D spend/sales
• Operating margin


BP #4:
Eliminate Risks of Keying In Data
Example: Tax accountant drops a minus sign…
…causing a $2.6 billion error…

…resulting in the President apologizing to shareholders that they
would not get a $4.32/share distribution at end of year
—From the Risks Digest

Start Here: Target recurring manually processes, like
monthly currency rate translation, for automation.


BP #5:
Use External Drivers For More Accurate Forecasts
Ventana Research: What would make your revenue forecasting process more accurate?


Most Companies Lack Leading Indicators &
Competitive Benchmarks
Q: Please assess the amount of information you receive through reports in each of the following areas.

80%
85%

Ventana Research


1980’s Technology Not Built
For External Drivers

Industry
Benchmarks

Economic Currency
Indicators Rates

Built for:

Leaving Out
External Drivers
Internal Data


The Cloud Shows Us A Better Way

Aggregation Integration


The Cloud Is Built To Handle External Data

1st & 2nd Gen 3rd Gen Benefits

+ =

Better Models Better Data Better Decisions


1. Better Planning With Indicators & Benchmarks

Challenges
• Unreliable 5-year financial and operational plans

Solution
• Real-time access to 1,300+ external indicators via the cloud
• Easily add external drivers to their planning process
• Dashboards highlight changes in external indicators

Benefits
• More accurate medium and long range plans
• Spot new opportunities and avoid risks brewing outside their organization


2. Monitor Currency Rate Changes

Challenges
• 50% of revenues outside the U.S.A.
• Foreign currency exchange rate movements can have a material impact on results

Solution
• Updated exchange rates that can be seamlessly integrated into their cloud based
Corporate Performance management application
• US $, Canadian $, Euro €, UK £, China Yuan.

Benefit
• Now possible to easily monitor the impact of rate changes on both future
forecasts and current consolidated results


3. Better Board Level Report For Decision Making
Challenges
• Tedious searching for benchmarks
• Manual data transfer risks
• Merging benchmark data into board reports

Solution
• SEC filings with 5 years of history w/ income statement, balance sheet, ratios
• Consistent data structure
• Complete reporting package

Benefit
• Better decision making


Q&A


We will send you a follow-up survey and would
appreciate your feedback.

Please join us at www.proformative.com to ask any
additional questions you may have and to continue
this conversation with your peers and the experts
you heard from today.

If you have questions about CPE Credit please contact
Tonya Walsh at twalsh@proformative.com


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