Robert Kugel's Analyst Perspectives

Treasury is More Effective with Technology

Posted by Robert Kugel on Jan 2, 2017 11:09:38 PM

The treasury function in finance departments doesn’t get a lot of attention, but it’s a fundamentally important one: to ensure that all funds are accounted for and that there is sufficient cash on hand each day to meet operating requirements. Keeping track of and managing cash, especially in larger organizations, can be complicated because of multiple bank accounts, complex financing requirements and various methods of receiving and making payments; the complexity deepens when more than one currency is used across multiple jurisdictions, which also can pose regulatory issues.

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Topics: CFO, controller, credit, debt, Financial Performance Management, Analytics, Office of Finance, Predictive Analytics, cash management

Transforming Treasury with Kyriba Enterprise

Posted by Robert Kugel on Aug 30, 2013 10:03:06 AM

Many finance executives want to improve their department’s effectiveness in order to play a more strategic role in their company. However, frequently they find at least three serious challenges to achieving this sort of finance transformation. One is that too much time and resources are devoted to purely mechanical tasks. Another is that the information executives need is not always available immediately. A third is that they lack the data (which is unavailable or too difficult to access), the analytic tools or both to do rapid contingency planning. One area in the Office of Finance that needs particular attention is treasury, as I commented recently. Treasury management is a challenge because it’s highly detailed and demands complete accuracy. These requirements make it an area that can benefit from more automation.

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Topics: Analytics, Business Performance Management (BPM), CFO, Controller, credit, debt, Financial Performance Management (FPM), Kyriba Financial Performance Management, Predictive Analytics, Office of Finance, cash management

Making Treasury More Strategic

Posted by Robert Kugel on Jul 10, 2013 8:43:35 AM

Along with other aspects of the finance organization, there’s increasing emphasis on having the treasury function play more of a strategic role in the organization. Typically, Treasury is charged with keeping track of and managing cash. Especially in larger organizations, this can be complicated because of multiple bank accounts, complex financing requirements and many methods of receiving and making payments; the complexity deepens when more than one currency is used across multiple jurisdictions, which also can pose regulatory issues. Treasury’s primary directive is to ensure that all funds are accounted for and that there is sufficient cash on hand each day to meet operating requirements. To accomplish this, finance professionals must perform key analytic tasks accurately to produce a clear picture of cash inflows and cash requirements. Analysis often is challenging because these numbers are constantly changing and because the process of collecting, analyzing and reporting all the data can be excessively time-consuming if done manually. This is a situation perfectly suited for dedicated applications that automatically manage the data needed to orchestrate treasury processes and provide analysis to inform decisions. Yet our benchmark research finds that more than half (56%) of companies with more than 1,000 employees either use spreadsheets exclusively or employ them heavily in conjunction with a treasury application.

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Topics: Analytics, Business Performance Management (BPM), CFO, Controller, credit, debt, Financial Performance Management, Financial Performance Management (FPM), Predictive Analytics, Office of Finance, cash management

Rethinking Budgeting for 2013

Posted by Robert Kugel on Sep 7, 2012 11:16:54 AM

Budget season is about to open at most companies that operate on a calendar year, so this is probably as good a time as any to rethink the process. Almost all companies will undertake the construction of a budget this year the same way they did it last year, despite widespread complaints that it is a monumental waste of time. One major reason why budgeting never changes is that it isn’t important enough to be worth serious rethinking. Another reason is that too many vested interests are aligned with the status quo, especially because compensation is tied to budgets. Despite this, I think companies can do better, evolving the process from a finance-centric activity to one that serves the needs of broader business interests as well.

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Topics: Budgeting, Business Performance Management (BPM), cash management, CFO, Compensation, Controller, Financial Performance Management (FPM), FPM, Integrated Business Planning, Operational Performance Management (OPM), Planning, Reporting, Sales Performance Management (SPM), Office of Finance, Big Data

Making Better Use of Ratios in Analytics

Posted by Robert Kugel on Aug 17, 2012 12:01:56 PM

For the past several years Ventana Research has focused more on analytics and their importance to improving business performance. We’ve done extensive benchmark research in business analytics, detailing how they are used generally in business and in major functional areas of companies as well as their application in specific industries. We adopted this focus  because technology advances are changing the landscape of analytics. Its use in business management, for example, is getting new scrutiny these days because of three important changes in information technology.

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Topics: Analytics, best pracices, Big Data, Budgeting, Business Analytics, Business Performance Management (BPM), business value, challenge, Customer Performance Management (CPM), driver-based, Financial Performance Management (FPM), financial planning, In-memory, Modeling, Operational Performance Management (OPM), Performance Management, Planning, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Office of Finance, Human Capital Management, cash management

Today’s Companies Need Action-Oriented Information Technology Systems

Posted by Robert Kugel on Dec 29, 2011 11:08:57 AM

Management decision-making typically involves a three-step process of inform, analyze and act. In the earliest days of what came to be known as business intelligence, developers created decision support systems that provided information and analytics to help executives and high-level managers choose the best course of action. Working with numbers rather than gut instinct still is viewed as a best practice. After all, a pilot who doesn’t trust his or her instruments is heading for an accident.

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Topics: Analytics, best pracices, Big Data, Budgeting, Business Analytics, Business Collaboration, Business Mobility, Business Performance Management (BPM), business value, challenge, closed loop, Cloud Computing, contingency planning, Customer Performance Management (CPM), driver-based, driver-based planning, Financial Performance Management (FPM), financial planning, In-memory, Modeling, Operational Performance Management (OPM), Performance Management, Planning, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Office of Finance, cash management

Contingency Planning and the Euro’s Collapse

Posted by Robert Kugel on Dec 5, 2011 12:48:36 PM

I thought of writing a note on this topic when multinational corporations started to withdraw their deposits from eurozone banks, but the pessimism that event engendered was short-lived. Now, as the monetary crisis deepens in Europe, it’s perhaps time to ask what your company would do if parts of its financial system implodes. You may think that your company will not be affected because it doesn’t do business with the eurozone. Or you may believe that it’s unlikely to happen and therefore not worth spending the time to consider the implications. I think both assumptions are mistaken.

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Topics: Analytics, best pracices, Budgeting, Business Analytics, Business Collaboration, Business Mobility, Business Performance Management (BPM), business value, challenge, Cloud Computing, contingency planning, crisis, Customer Performance Management (CPM), driver-based, Financial Performance Management (FPM), financial planning, Modeling, Operational Performance Management (OPM), Performance Management, Planning, Sales Performance Management (SPM), Social Media, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Office of Finance, Big Data, cash management

Managing Mountains of Cash Is Harder than It Sounds

Posted by Robert Kugel on Nov 7, 2011 6:56:47 AM

At first thought, it seems as if having a mountain of cash to manage is a problem most companies would like to have, but it’s a real problem nevertheless. To be sure, the large majority of companies are able to deal with their cash and short-term and longer-term monetary investments because the amounts are small enough to be manageable. Indeed, many companies, especially smaller ones, face the opposite problem and spend more time focused on their uncertain funding requirements. Still, over the past decade highly profitable companies have been generating more cash than they need to fund expanding operations and capital spending requirements (Apple and Oracle are two examples), and now they have to manage it. Larger companies may have portfolios in the tens of millions to billions of dollars in multiple currencies in multiple jurisdictions, so there’s a lot at stake.

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Topics: Business Analytics, Business Performance Management (BPM), cash management, credit, Financial Performance Management (FPM), GAAP, Performance Management, Risk, Tax, Office of Finance

A Practical Look at Driver-Based Planning

Posted by Robert Kugel on Oct 12, 2011 11:23:28 AM

I hadn’t thought about the exact definition of “driver-based planning” until the question came up in the context of our planning benchmark research showing that only 6% of companies with more than 100 employees do driver-based planning. Broadly defined, the term could be applied to the use of any spreadsheet-planning model because these almost always have built-in volume-times-price formulas, which are components of driver-based plans. However, this is not what most people have in mind when they talk about driver-based planning, and that’s reflected in the low percentage of those employing the technique.

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Topics: Analytics, best pracices, Budgeting, Business Analytics, Business Collaboration, Business Performance Management (BPM), business value, challenge, driver-based, Financial Performance Management (FPM), financial planning, Modeling, Operational Performance Management (OPM), Performance Management, Planning, Sales Performance Management (SPM), Workforce Performance Management (WPM), Office of Finance, Big Data, cash management