Robert Kugel's Analyst Perspectives

Profitability Management: A CFO Priority to Gain Competitive Advantage

Posted by Robert Kugel on Feb 22, 2021 3:00:00 AM

Profitability management produces a sustainable competitive advantage but by 2025 only one-third of companies will have implemented a profitability management initiative, explains Ventana Research SVP and Research Director Robert Kugel. This brief video shows why FP&A organizations must be part of a profitability management approach to pricing and costing.

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Topics: FP&A, Office of Finance, Sales Operations, CFO, financial planning, Price Optimization, Price and Revenue Management

Use Software for More Effective Tax Management

Posted by Robert Kugel on Feb 10, 2021 3:00:00 AM

The post-pandemic world will see much returned to normal, but there will also be change. For businesses that faced shutdowns, these changes will include higher taxes to pay for the costs of mitigating the economic impact, and the loss of tax revenue. In addition to imposing higher tax rates, some governments will strive to raise revenue by accelerating their adoption of digital technologies to enhance compliance. Taxes are the largest single expenditure for most corporations, both taxes on their income, and indirect forms of taxes such as value-added taxes (VAT) and sales and use taxes. Minimizing tax expense within the limits of the law must be a priority for CFOs.

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Topics: Office of Finance, Financial Performance Management, ERP and Continuous Accounting, Revenue, robotic finance

BlackLine Matches Receivables for Continuous Accounting

Posted by Robert Kugel on Feb 5, 2021 3:00:00 AM

BlackLine recently held its first virtual user conference, Beyond the Black, where it detailed numerous additions and enhancements to its applications. Of note was the launch of BlackLine Cash Application, an accounts receivable (AR) processing software based on software originally developed by recently acquired Rimilia. The new application fits the company's product strategy of providing accounting departments with software that automates time-consuming repetitive tasks and substantially reduces the amount of detail that individuals must handle in performing core processes.

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Topics: Office of Finance, Business Planning, Financial Performance Management, ERP and Continuous Accounting, AI and Machine Learning

Make Accounts Receivable Pay

Posted by Robert Kugel on Dec 14, 2020 3:00:00 AM

Can you imagine a more arcane and boring topic than accounts receivable? Unless you are the CFO, controller, chief accounting officer or treasurer of an organization, maybe not. Anecdotally, as it’s part of the trend to the digital transformation of all things in the department, there appears to be greater interest in this area of the Office of Finance. With populations locked down and the accounting staff unable to work in an office, the need to operate virtually has accelerated the application of technology to finance and accounting departments, which has been long overdue.

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Topics: Office of Finance, Financial Performance Management, ERP and Continuous Accounting, robotic finance, AI and Machine Learning

Profitability Management is a CFO Imperative

Posted by Robert Kugel on Nov 27, 2020 3:00:00 AM

One of the oddities of corporate management is that, as a rule, nobody oversees managing profitability. CEOs are accountable for meeting company-wide financial targets and assign responsibility for achieving profitability levels to business unit owners across and down an organization. Sales quotas designed to achieve revenue goals are put in place, and budget owners have cost and margin objectives. But setting profitability objectives is not the same as managing profitability.

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Topics: Office of Finance, Sales Performance Management (SPM), Financial Performance Management, Price and Revenue Management, Digital Commerce, Predictive Planning, subscription management

Value-Based Planning Improves Corporate Performance

Posted by Robert Kugel on Nov 6, 2020 2:00:00 AM

In preparing this research note I took the precaution of searching “value-based planning” to see what came up. Over the years, the term has been used in several contexts each with different shadings. By my definition it’s an approach to planning and budgeting that maximizes the long-term value of an organization by considering all its objectives – not just the financial targets. Value-based planning is a more effective management tool for executives because it defines objectives in terms of resources used and outcomes achieved, not just the financial outcome. Value-based planning is only possible when it is fully supported by the senior leadership team and only feasible using software that can integrate operational planning and financial budgeting.

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Topics: Office of Finance, Financial Performance Management, Predictive Planning

Fundamental Change is Coming to ERP Systems

Posted by Robert Kugel on Oct 30, 2020 3:00:00 AM

Enterprise resource planning (ERP) systems are central to nearly every organization’s management of operational and financial business processes. They are essential to the smooth functioning of an organization’s record keeping, accounting and finance tasks. In manufacturing and distribution, ERP manages inventory and logistics. Some ERP software vendors incorporate an extended set of capabilities that include managing human resources as well as supply chains and logistics. In the 2020s, technology will drive fundamental change in how ERP systems operate and how companies use the software.

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Topics: Office of Finance, Financial Performance Management, ERP and Continuous Accounting, robotic finance, Predictive Planning, AI and Machine Learning

Sustainable Sourcing and Supply Chains

Posted by Robert Kugel on Oct 2, 2020 3:00:00 AM

A couple of years ago, I started talking about a “New Era of Trade.” Its starting point was the world financial crisis in 2007, but the evidence that we were experiencing a shift only became obvious years later. I think “new era” is a better description of what’s going on than calling these bilateral ructions a “trade war.” I avoid that latter term because I believe it should apply to an environment that truly merits such a description, one similar to the period from the late 1920s and well into the 1930s when escalating tariffs, export taxes and competitive currency devaluations caused world trade volume to plummet by two-thirds. Until 2020, world trade growth had only been slowing, not declining.

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Topics: Office of Finance, Operations & Supply Chain, Predictive Planning, continuous supply chain

DADs Address the Mother of All Data Problems

Posted by Robert Kugel on Sep 25, 2020 3:00:00 AM

An important recent development in software designed for the Office of Finance is the addition of what we’re calling a data aggregation device (DAD) for analytical applications. A DAD automates the collection of data from disparate sources using, for example, application programming interfaces (APIs) and robotic process automation (RPA). With a DAD, users of the analytical application have immediate access to a much broader data set; one that incorporates operational as well as financial data from internal and external sources. The larger data set enables a much more expansive set of analyses than has been feasible in the past because the process of acquiring the data is automated, and the data aggregation is handled in a controlled manner. This control means that data in the system is authoritative, accurate, consistent, complete and secure. The difference between a DAD and a finance data mart is that the former is prebuilt for the specific application, and therefore eliminates this source of implementation costs and offers faster time to value.

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Topics: Office of Finance, Analytics, Business Intelligence, Data, Financial Performance Management, Price and Revenue Management, robotic finance, Predictive Planning, AI and Machine Learning

Updating FP&A’s Mission - A New Approach for the 2020s

Posted by Robert Kugel on Sep 14, 2020 3:00:00 AM

In this Analyst Perspective from Robert Kugel, learn how FP&A can redefine its mission to achieve the long-stated goal of making it more of a strategic partner with the rest of the organization. This means fully adopting integrated business planning, a high participation, collaborative, action-oriented approach to planning and budgeting built on frequent, short planning sprints. Short planning cycles enable companies to achieve greater agility in responding to market or competitive changes, and in the face of a very uncertain future, companies have been discovering the value of rapid planning and budgeting cycles. Watch the video to learn more.

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Topics: FP&A, Office of Finance, Budgeting, Business Planning, CFO, financial planning, forecasting