Tag Archives: IBM Cognos

Success with Performance Management – An interview with Mark Lack from Mueller Inc.

The 80 year-old company Mueller Inc is a a leading manufacturer of pre-engineered metal buildings and metal roofing products. Mark Lack is responsible for performance management at Mueller Inc. He delivered a great presentation about their IBM Cognos implementation at  the recent IBM Vision 2012 event in Orlando. Following his session we sat down for a short interview.

Christoph Papenfuss: Mark, tell us about your role at Mueller Inc.

Mark Lack:  I was hired to manage the planning and forecasting function and as my role evolved Strategy Management and Business Analytics became a natural extension.

Christoph Papenfuss: Did Mueller already have established performance management processes when you joined the company. Can you provide examples?

Mark Lack: Yes, it was Excel based.  I can’t say it wasn’t sophisticated because it was.  Lots of automation and VBA scripts to manage the roll-ups.  The problem with the system was the inordinate amount of time it took to perform manual manipulations. Ultimately it rolled up to a series of financial performance items.  The process was long and complicated, and in the end we had difficulty matching the output with the actual drivers of the performance.

Christoph Papenfuss: Reporting and Analysis was difficult then. What about the planning and forecasting process? Did you encounter any difficulties?

Mark Lack: The budgets weren’t kept in our main ERP system, only in Excel. We had to manually type in 300 lines of actuals each quarter in order to run variance reports.  Invariably we would encounter that someone inserted a new line and it flowed through the rollup.  Forecasting was done by evaluating what could be done, backing it off 10% and seeing if that could get passed.  Often times when a number or a project was accepted, every other plan would magically look similar.

Christoph Papenfuss: You decided to implement new performance management processes. How did you go about that? Did you use a big bang or a phased approach?

Mark Lack

Mark Lack

Mark Lack:  We had just come off of an ERP implementation that was big bang, so we realized that this next project should be phased.  Actually, when working with PM, you have to be careful of what you incentivize (to avoid bad behaviors) so it lends itself to a more phased approach.  We began by implementing a corporate balanced scorecard.  This became the framework for which the organization’s activities would be managed around, so this became the parameters.  The scorecard reporting at first was done in Excel with Red yellow green traffic lights as the metrics success and failures.  The first question when we reviewed these was always “What caused the target to be off?”  We realized that we had to put a better system in place to manage and automate the PM if we were to be able to communicate what was important about executing our strategy and drive behavior.

Christoph Papenfuss: What does you current solution look like? What have you implemented and which processes are automated?

Mark Lack: We have an integrated system that uses the strategy as the foundation of our company.  All of our PM processes are integrated from the balanced scorecard, to reports that indicate why we met or missed a target, to a planning system to help us get back on track.  We try to allow the data to flow systematically with little to no intervention.  We’re pretty close to an entirely closed loop system and the told we have provide the ability to automate the dissemination of important information needed to run the organizations.  The goal is to get relevant information to decision makers when and how they need it.  We’re pretty close to that goal and automation of information delivery against our “big data” has helped us in this regard.

Christoph Papenfuss: One of the key problems companies are struggling with is target settings. Managers tend to fight for lower targets. Their argument is that their goals are arbitrary. Do you have similar issues?

Mark Lack:  We did for a while, and for the most part they have a point.  If the goal is 15 % and they are at 5% now, a 3 times jump can be difficult to obtain if looked at from a high level.  What we were able to do with our analytics tools was to analyze organizations around a common theme, such as revenue.  By breaking them into groups and analyzing the processes within the groups, the result in target setting is less arbitrary.  In our case if 7 organizations have a similar revenue level and 5 are performing at a high level in regards to customer satisfaction scores, all things being equal, the remaining 2 orgs should be as well.    So we set the target within the per group range as an expectation.  The top 5 in the peer group set the target and then the conversations switched from “That target is arbitrary” to “This was set by your peer’s performance”.  The idea here is that now we can remove the distraction of who set the target (now it is the peer group) to what are the best practices that drive this performance?  If 70% of your peers can perform, what keeps you from performing?  Ultimately it changes the conversation for the better.

Christoph Papenfuss: Implementing a solid performance management platform requires resources. What is the benefit for your organization? Have you ever attempted to calculate the ROI?

Mark Lack: We always knew the answer was positive, because you can see results, right?  The problem we always had was how do you quantify it?  We had a research study done by Nucleus Research and the direct benefits were 113% per year.  If we add the indirect benefits of a better informed workforce, I’m guessing it would have to be 10x that figure.

Christoph Papenfuss: What are your future plans?

Mark Lack:  I’d like quote Jeff Spicoli and say “me and Mick are going to wing on over to London and jam with the Stones” but I can’t.  There are too many opportunities to use the tools available to continue to maximize the value out of our system.

Christoph Papenfuss: Thanks much for your time, Mark

You can find out more about the Mueller Inc implementation on IBM’s website.

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Want to run a company? The Business Analytics Experience Workshop

You are the new CEO!

What does it feel like to run a company? How cool would it be to make really important decisions? How awesome would it be to have all the critical information that you need to get your job done? Good questions? Here is the good news for you: You can certainly experience what it feels like. How? Simply join the Business Analytics Experience Workshop. IBM has developed these workshops together with the team from Align-Alytics and PMSI. Participants get to run a fictitious company called Future Chips. Together with your team mates and a workshop host, you will analyze the past performance of Future Chips and you will get to develop strategic plans, marketing tactics, pricing strategies etc.. But it doesn’t stop there – the business analytics experience workshop gives you real-time feedback. All your decisions will be executed by a simulation engine. It’s quite cool!

The Mini-MBA in a fun format

A participant of the workshop recently said: “Attending the workshop is like getting a mini-MBA. And it’s fun!”. The business analytics experience workshop does teach you quite a bit about real-life business. It is based on the book “The Performance Manager“. Along the way you will also experience what it feels like to have business analytics available to prepare and make decisions. But rather than me describing it in more detail, you should hear from the creator of the workshop. My friend Roland Mosimann is the CEO of Align Alytics. We recently met at the IBM Vision event in Orlando. The team hosted one of the first CFO versions of the workshop.

The Business Analytics Experience Workshop

Come and join the Business Analytics Experience Workshop! First of all, it’s great fun and you can learn a lot. I have hosted close to a hundred of these and I love it. Find out more about the upcoming schedule on the IBM page. You can also read more about the workshop in a prior post on this blog.

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IBM Vision 2012 – A great conference

IBM Vision 2012

Greetings from the JW Marriott hotel in Orlando. The IBM Vision 2012 conference for Finance and Risk Management professionals is going really well. Close to 800 professionals from all over the world are here. The atmosphere has been great so far. An event of this size allows people to easily connect with each other and to exchange a few ideas.

Keynotes

The keynotes of the events have been well received. They were action and information packed. The Tuesday morning presentations were especially insightful. Les Rechan kicked off the day with a few thoughts about the role of analytics in the office of finance. He was followed by book author Michael Mauboussin who talked about the power of counterintuition in decision making. John Hagerty from Gartner closed out the morning session with a few customer interviews.

Make sure to watch or scan through the video recording.

Watch live streaming video from ibmsoftware at livestream.com

Stay tuned for further updates

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“Focus is key for success” says the German Cognos User Group

The German Cognos User Group

Last year, I posted an interview with Steve Veilleux, president of the Quebec Cognos User Group. This article has gotten a lot of attention. I therefore decided to reach out to another very successful user group: The German Cognos User Group. The three leaders of this organization volunteered for an interview. Please meet Kai Noack, Martin Otto and Erik Purwins.

Cognos User Group

Christoph: What is the purpose and mission of your Cognos User Group?

Kai Noack: Our group has a clear mission:

  • Provide a forum for IBM Cognos users to exchange knowledge and share experiences.
  • Provide deep expertise in all IBM Cognos related questions via newsletters and conferences.
  • Connect with IBM management to discuss trends and potential issues.

We cover all IBM Cognos products (BI, Performance Management, etc.).

Christoph: How many members do you have and how do you communicate with each other?

Martin Otto: Our group was founded back in 1998. Membership has grown membership rapidly. We currently have over 300 active members from over 100 different companies. The group targets German speaking associates: 95% come from Germany and the remaining 5% are spread between Austria and Switzerland. Our roster of associates features active Cognos users, administrators, project managers and consultants.

We have three main communication channels:

  • The website is our hub. It provides news, updates and other relevant information. There is also a discussion forum.
  • Frequent newsletters
  • Seminars and conferences are the ‘glue’ that hold our group together. We organize a bunch of those every year. They are very successful and provide us with the ability to develop long-lasting relationships.

Christoph: Do you have to pay to become a member? If yes, how much and how do you utilize the funds?

Erik Purwins: Our group is completely independent. IBM does not sponsor us. Anybody who is interested in IBM Cognos and Business Analytics can join our group. But we do charge for the membership. There are currently two types of memberships: Personal (100 EUR p.a.) and corporate (EUR 250 p.a.). The corporate model is very attractive as it allows up to 20 people from an organization to participate in our activities. The majority of our members have a corporate account.

The fees that we collect are used for several purposes: maintenance of our website, conferences and marketing. German law also requires us to utilize a professional accountant and external tax advisor.

Christoph: What are the benefits of being a member in the German Cognos user group?

Kai Noack: There are a number of benefits for our members:

  • Education – we have a big focus on knowledge sharing. Our members have diverse backgrounds and have a lot of accumulated knowledge.
  • Problem solving – our community allows us to jointly solve problems
  • Direct connection to IBM – we enjoy an excellent relationship with IBM. This allows us to voice concerns, share ideas and obtain critical information
  • Ability to detect trends – we frequently invite guest speakers and conduct polls
  • Fun – our members really enjoy being part of the group. We are all passionate about business analytics. Being surrounded by like-minded professionals is fun and rewarding.

We strongly believe that our group is contributing to the success of the different IBM Cognos implementations in the German speaking countries. As a matter of fact, members claim that being part of the group feels like having a professional consultant available 24/7. Our combined knowledge is that rich and deep.

Christoph: Tell me more about your conferences.

Martin Otto: We typically organize 4-6 conferences and workshops per year. Some of the meetings are more general, others focus on a specialized topic. Two years ago, we hosted an event about running Cognos on mainframes, for example. The events are actually open to non-members as well. We do believe we profit from having a larger circle participate. Non-members typically pay a surcharge for participating.

We usually invite at least one representative from IBM. This provides all members with the ability to have a direct connection to IBM. At the same time, IBM benefits from being able to connect with their loyal customers. It’s a win-win situation.

Christoph: There are some regions that do not have a user group. What advice would you have for IBM Cognos sponsors and users who are thinking about forming or joining a similar user group?

Erik Purwins: There are certainly a lot of lessons.

  • We highly recommend defining a clear vision for the group. Our group is focused on technical topics, for example. Having that vision provides clarity and drives success. Members know what to expect when they join us. The majority of them either have a technical background or they enjoy discussing the technical topics.
  • Organize professional meetings. As mentioned earlier, they are the glue for our group. We do charge a small fee for all our meetings (in addition to the annual fee). That allows us to provide the best possible service (great locations, professional setup, etc..). Charging for attendance also acts as a filter for those people who are not passionate about the topic.
  • The conferences need to be focused and need to feature relevant content. Speakers are highly encouraged to focus on specific lessons-learned that benefit the attendees. Our members therefore have the ability to gain a tremendous amount of knowledge.
  • Edit your content. We actively discourage ‘sales and marketing’ type content. We learned our lesson early on when some people ‘hijacked’ a meeting to sell their services or software. Our group is not a market place for selling. Our members expect to learn something when they join our organization.

Christoph: Thanks much for your time!

You can find out more information about the German Cognos User Group on their homepage.

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Joining a Cognos user group is key! – An interview with Steve Veilleux

Cognos User Groups are quickly gaining a lot of interest from IBM customers around the globe. These groups provide users with the ability to learn, to connect and to share experiences. A few weeks ago, I had the honor to meet with one of North America’s largest Cognos User Groups – the ‘Groupe d’utilisateurs Cognos du Quebec‘. The president of this group, Steve Veilleux and I sat down for a quick interview.

Christoph: What is the purpose and mission of your Cognos user group?

Steve: The « Groupe d’utilisateurs Cognos du Quebec »has a clear mission. We primarily want to provide the Quebec BI community with networking opportunities around IBM Cognos technologies and BI concepts. We typically do that by organizing two full-day events per year (in Montreal and Quebec City). Our members help each other to gain new knowledge they can apply at work. We also share the latest news about IBM Cognos. Members frequently share case studies as well.

Christoph: Is this a new initiative or does this user group have a longer history?

Steve: I am proud to say that our Cognos user group has a long history in the IBM Cognos world. We were founded over 15 years ago!  I personally joined the group in 2002 and have played the role of the president since 2007.

Christoph: How many members do you have and how do you communicate with each other?

Steve: We currently have around 450 people. Our meetings typically attract around 100 attendees. To communicate with each other, we established a group on LinkedIn. Members and non-members can also use our web site: www.gucquebec.org . We also publish a newsletter and share the results from our different meetings.

Christoph: Who participates in the user group?

Steve: We have a well-balanced mix of members. The majority are IBM Cognos customers or prospects from the business or the IT side. There are also consultants and some IBM employees.

Christoph: What are the benefits of being a member in a Cognos user group?

Steve: A user group is definitely very beneficial for its members. I personally see three main benefits:

  • The ability to stay informed about IBM Cognos products
  • The ability to networking with other business analytics professionals
  • Privileged contact with IBM employees

Christoph: What is your relationship with IBM through the group?

Steve: We have a very close relationship with IBM. They actually sponsor us to a certain degree and provide us with resources for our meetings. We typically invite speakers to help us understand the latest news about the technology and services.

Christoph: There are some regions that do not have a user group. What advice would you have for IBM Cognos sponsors and users who are thinking about forming or joining a similar user group?

Steve: My clear advice: Start or join a Cognos user group! First of all, you need to find a few like-minded people. Once you have made up your mind, make sure to share responsibilities. A successful user group requires some time and effort. People need to provide some help with organising meetings, managing contact lists, finding and selecting presentation topics and speakers, reserving the facilities, etc.. Our “Groupe d’utilisateurs Cognos du Quebec” is managed by an executive committee for that purpose. Once the user group is up and running I recommend to take care of a few things:

  • Listen to your user community. If possible, try to find conference topics they ask for (we frequently conduct a survey).
  • Avoid consultant-only presentations. We strongly prefer customer presentations and we think this is one a the reason why our Cognos user group is so successful.
  • Encourage your members to actively participate. It can be a challenge to find and convince customer “champions” to prepare materials and to present them. To encourage them we offer free registrations to our meetings and also offer them a gift for their effort.
  • Work with IBM. We have had great IBM people present at our meetings.  Exactly like you, Christoph!
  • Charge a registration fee for your meetings. Not only does this help cover fixed expenses (room, audio/video, meals) but it also helps us get some prestigious speakers. We were able to attract influential experts like Wayne Eckerson, Shawn Rogers, Brett Knowles, Philippe Nieuwbourg, Naomi Robbins and some others. Interest in our events has significantly increased since we started bringing in these prestigious speakers (+40%).
  • Try to have fun and share the good news! This is really important! Once you start having fun and people get value out of the community, word of mouth will bring in new members.

Christoph: Tell me about your career in Performance Management and Cognos

Cognos user Group

Steve Veilleux

Steve: I started my career 17 years ago at Groupe Canam Inc.. Until 2000,  I was involved in payroll, manufacturing and financials systems development. With all the knowledge I had gained on those systems at Canam Group Inc,  I started a Data Warehouse project in 2000. And for the past 11 years I was thus responsible for the development of the BI environment. Can you believe it – I started with Cognos 6.6 back in 2000. I guess that makes me an “early adopter”. I have hands-on experience with almost all versions between Cognos 6.6 and IBM Cognos 10.1. During those years I also participated in Customer Reference and IBM Cognos Beta Programs. You can even find my profile on the IBM website. I recently decided to make a major change in my career by join Keyrus Canada as a Business Intelligence Consultant.

Christoph: Thanks much for your time, Steve!

You can connect with Steve directly via LinkedIn.

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Business analytics & the Innovator’s DNA

Creativity

Chris Barez-Brown, author of "How to have kick-ass ideas"

The other day, I wrote about how Business Analytics can help create innovative businesses. For some reason, the topic kept hovering in my mind and I pulled out an interesting six-year study conducted by INSEAD professor Hal Gregersen, Jeffrey Dyer of Brigham Young University and Clayton Christensen of Harvard. It is called ‘The Innovator’s DNA’. The authors of the study found that creative and innovative people tend to have five key characteristics. When looking at these characteristics, it seems that Business Analytics can indeed have a very positive impact on each one of these. Let’s take a look:

  • Associating: Creative people are able to connect seemingly unrelated pieces of information. Military camouflage, for example, stems from ideas created by Cubist artists. Business Analytics allows us to analyze data from various different angles. We can compare different aspects of our business, observe trends and create what-if scenarios. Analytics can therefore help us make new associations between different data sets.
  • Observing: Creative entrepreneurs tend to be keen observers. They have a high level of awareness. Business Analytics can help us raise our own level of awareness: we have the ability to stay closely connected with our business. We can observe trends in great detail. We can obtain information without too much difficulties. We find new trends.
  • Experimenting: No big surprise – innovators are good at experimenting. They try out different things. They fail, they succeed. Business Analytics allows us to try out different things. We can ask what-if questions? We can test assumptions. What would be the impact to costs, if I hired new managers in location A instead of location B? What if we shifted production from one plant to another?
  • Networking: Innovators seek interaction with diverse people to further their thinking. They try to discuss problems with different people outside their normal teams. Business Analytics allows us to connect with people across our organization. Using collaboration features we can share insights, seek input and observe what other people are thinking.
  • Questioning: This is a core skill. Creative minds ask lot’s of questions. They don’t just assume. They explore. Business Analytics helps us ask a lot of questions: How are we doing? Why is that so? What should we be doing? What if we increased our travel budget.

LET’S FOSTER CREATIVITY AND INNOVATION

Creative Powerhouse: Walt Disney

Don’t get me wrong. Business Analytics is not going to turn all of us into creative powerhouses. Although, it could and should….But if anything, it lowers the barrier towards creative thinking. The worst thing we can do today is to just sit there and work with the same type of information over and over again. It gets worse when people are afraid to look beyond the normal standardized paper reports. A classic case of tunnel vision frequently occurs.

INNOVATION IS THE DRIVER

There is a lot of opportunity in the markets today. Actually, much more opportunity than ever before. But global competition forces us to find new and better ways. But to stay competitive and to leverage these opportunities we all need to foster innovation and creativity.

If used right, Business Analytics will make a serious contribution towards success. Try pushing yourself and your users. Also, start considering the above mentioned points in our business case. We sometimes focus on the hard facts such as cost savings. But creativity and innovation can lead to something much bigger. Once again, think about the successful companies out there!

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What’s happening in the IBM Labs? The BA Forum Keynote – Day 2

Information on Demand 2011

The IBM Business Analytics Forum 2011 featured two keynotes this year. The day 1 keynote focused on the general IBM strategy in the business analytics segment along with several product updates and demos. The day 2 presentation had a bigger focus on specific solutions. And not only that: There was a preview of what is being developed in the IBM Labs. You will have to watch the hands-on demo.

The Cognos keynote chapters

In case you have limited time, here are some key chapters that can view in the video below.

  • Minute 10:30 – Trends & Decision Making with Deepak Advani
  • Minute 23:30 – Demo: Social Media Analysis – Jason Verlen
  • Minute 28:30 – Solution update with Deepak Advani
  • Minute 45:00 – Demo: Decision Management – Jason Verlen
  • Minute 55:30 – IBM Labs (Personal Analytics) with Harriet Fryman, Eric Yau and Christoph Papenfuss

Watch live streaming video from ibmsoftware at livestream.com

IMPRESSIONS

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IoD 2011 – Here we come!

Information on Demand 2011Greetings from Ottawa, Canada! I arrived here last Sunday to work with our team on getting ready for BA Forum and Information on Demand 2011. The conference will kick off with our annual partner summit on Saturday, October 22nd. It will be a great show. We have some cool stuff to show you and there will be lot’s of great sessions. I have the honor to deliver a few demos at the Business Analytics keynote sessions. That’s what we are working on this week.

Before I head out to IoD 2011 and BAForum tomorrow morning, I wanted to share a few infos with you.

KEYNOTES

There are two Business Analytics Keynotes this year. Make sure not to miss them. Rob Ashe, Eric Yau and Depak Advani are scheduled to speak. Together with some colleagues, I will show some interesting demos. Of course, there will be a few surprises as well (sorry….can’t share the details…). The sessions are:

  • Monday, October 24th: 3:45pm – 5:00pm
  • Tuesday, October 25th: 11:15am – 12:15pm

TRACKS AND SESSIONS

There are lot’s of exciting sessions this year. Please look at the agenda for the details. Here are my recommendations:

  • The Business Analytics Experience workshop: This is a real-life business simulation. You get to run a fictitious company called Future Chips. But the good news is that you and your team will have a live Cognos system available to prepare and make decisions. It is a lot of fun and you can learn a lot about business strategy, business analytics and decision making. There are a bunch of these scheduled.
  • Social Media Track: There is an entire track dedicated to social media this year. You will get to know Cognos Consumer Insight etc. I will definitely try to see some of those sessions.
  • Behind the scenes: My friends and colleagues Andrew and Jason will run a very cool session on Tuesday: How to build the keynote demos. You will get to see how our team build the different demos that we will show during the main sessions. Sign up early. This session will be packed.

SOCIAL MEDIA

There are two social media lounges this year: Connect and Share. From what I understand, this will be a perfect place to hang out during breaks. There will be phone charging station, social media feeds and a lot more. The lounges will be a perfect area for a tweet-up or just to get some work done. I will definitely try to stop by during breaks.

To stay current with the social media stream check out the Social Media Aggregator. It allows you to review relevant tweets and blogs for the entire conference. When you post something, please make sure to use the proper tags: #baforum or #iod11.

That’s it for today! Hope to see you in Las Vegas at BAForum. Ping me via Twitter if you have any questions or want to meet for coffee. I will also try to blog every day.

Cheers,

Christoph

P.S.: Last but not least, here are a few Tweeters I recommend following:

 

 

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How to create happy business people

“Projects could be so much fun if it wasn’t for the users.” Well, I have often heard this from different project teams. And there is some truth to this: Too many projects fail to ‘wow’ an organization because the business is disappointed about the final results. Based on my personal experience, I believe that the traditional implementation approaches are partially responsible for that.

Continue reading

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Success with Forecasting – A discussion with Pieter Coens

Please meet Pieter Coens. Pieter is the Director of Finance & Control at Landal GreenParks in the Netherlands. He started his career in public accounting and joined Landal over 16 years ago. Pieter has held various positions in finance at Landal.

Landal GreenParks is a leader in bungalow-park management and rental. Landal has over 65 parks with a total of approximately 11,000 chalets. With 47 parks in the Netherlands, Landal leads the Dutch bungalow -park market. Outside the Netherlands, Landal has parks in Germany, Belgium, Austria, Switzerland and the Czech Republic.

Pieter gave a great presentation about Landal’s planning and forecasting processes at the IBM Finance Forum in Amsterdam on May 24th, 2011. We were able to have a quick chat at the event.

Christoph Papenfuss: You have implemented IBM Cognos to automate your budgeting and forecasting processes. What have you accomplished so far?

Pieter Coens: IBM Cognos currently helps us create an annual budget along with a monthly forecast. For that purpose, we have implemented several elements including models for Rental Revenue and our P&L.

Christoph Papenfuss: How did you manage your processes before that?

Pieter Coens: We used to manage our processes with a myriad of Excel files. It was very difficult. We ran into various issues such as managing excessive file sizes that slowed down the network, dealing with sluggish recalculations, difficulties tracing interdependencies etc.. Aggregating the different files was extremely cumbersome and time-consuming. And of course, there are the associated audit issues with spreadsheets.

Christoph Papenfuss: How are you benefiting from the implementation?

Pieter Coens: IBM Cognos has allowed us to automate a lot of the steps in the process such as preparing, distributing and aggregating planning templates. We are also able to develop more intricate models that provide us with better insights. Overall, we feel that our finance team and the business users are now able to focus more on the actual planning activities rather than the administrative tasks that I described earlier. My team is much more productive.

Christoph Papenfuss: You have an annual budget and also a monthly forecast. Who is involved in the process?

Pieter Coens: Finance is in charge of executing the process. But the business owners have to work and develop their own budgets and forecasts. They are in charge of entering their data in the models. Finance plays the role of the coach: we help the business make sense of the numbers and we guide them through the forecasts and budget iterations. This approach provides us with several advantages: By actively involving the business we can obtain more accurate and timely data. We also feel that the business is able to gain better business insights by actively working with their budgets and forecasts and the associated monthly actuals. Last but not least, Finance has more time to focus on value-added tasks such as performing analysis.

Christoph Papenfuss: You have a solid forecasting process. How often do you update the forecast and how far do you look into the future?

Pieter Coens: We currently use a monthly forecast. This allows us to anticipate and react to market changes. We ask the business to perform a detailed forecast for the next two months only. The remaining months until year-end are automatically calculated as a trend of the 2-month forecast. We found that creating a detailed forecast further out than 2 months does not necessarily result in very accurate data and it also takes a lot effort. We want the business to focus their energy on the short time-horizon and only forecast the know effects throughout the Full Year.

Christoph Papenfuss: You are proponent of driver-based models. Can you give us an example of how you have implemented this? Also, what are the benefits for the organization.

Pieter Coens: Driver-based models allow us to increase the speed of the budgeting and forecasting exercise. Also, we are able to perform better analysis at month-end and during the planning activities: Instead of just looking at an absolute variance, drivers allow us to review this from different angles such as price or volume effects. Food & Beverage Revenue, for example, can be calculated as Number of Guestnights * Average Spend on Food & Beverage.  The associated Cost of Sales are a percentage of the Food & Beverage Revenue that has been calculated.

Christoph Papenfuss: How did you go about implementing the IBM Cognos solution?

Pieter Coens: We decided to follow a modular approach and started with a few smaller projects. This allowed us to build critical skills and develop success much earlier. This in turn led to a situation where the business heard about our accomplishments and they started asking for additional projects e.g. forecasting on Operational Management Information.. Change management is a lot easier if the business users ask for projects instead of us pushing them to accept

Christoph Papenfuss: What else are you planning to do?

Pieter Coens: We are definitely looking to reduce the level of detail in our models. More detail does not mean higher accuracy. On the contrary, more detail requires more work and it does not necessarily drive accuracy. We are also looking to implement additional models such as cash flow and predictive modeling/forecasting for our Yield department.

Christoph Papenfuss: Thank you very much, Pieter! Good luck with your implementation.

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