Authored by Mike Martin, Jeff Haynes and Aaron Kahn

Times were good, revenue growth was climbing, hiring was like clockwork, and prosperity seemed as if it would never end. There were signals of a slowdown, then a possible recession, but we didn’t expect a global pandemic to begin the year. So, now what?

If your organization ran models and had a financial plan in place for a downturn, perhaps you are more prepared to make well-thought-out critical decisions. If not, here are some thoughts on the steps you can take.

Let’s take a look at five examples where enterprise performance management (EPM) software can give your organization the power and visibility it needs to navigate these times of economic uncertainty, and why it’s a perfect time to consider investing in a solution.

Prepare

Ideally, you are prepared and have already worked through a variety of scenarios for your organization, ranging from the best case to worst case. Maybe you have even mapped out a plan for “in case of” scenarios. As we have seen, recessions happen fast, and quick decisions need to be made. Being prepared can help you make rational decisions before you are in the depths of a crisis. Having a plan in place can be the difference between not knowing what to do versus making the right critical decisions confidently and accurately. 

In case your organization isn’t as prepared for the current situation, EPM software, such as Oracle EPM Cloud can help do exactly that. This software can ensure you have a plan in place for what’s next. Oracle EPM provides best practices for planning and scenario modeling with true out-of-the-box functionality. These models, managed by Oracle, are used to forecast, plan, run what-if scenarios and model your business trajectory in real time.  This means no more waiting for IT to run reports to get the information you need to make critical, timely decisions. In the current economic environment, this is more important than ever.

Cash management

The most vital bloodline of your organization is cash. We all have heard the expression “cash is king.” Knowing your cash flow options is critical. 

You need to be able to make cash flow decisions quickly, accurately and thoughtfully. This applies to many areas, including: modeling operational cash flow, determining which financial vehicles to leverage during times of crisis, and/or raising investment capital for M&A. 

Many organizations try to model cash flow in Excel, but this can be error prone and time-consuming, resulting in a maintenance nightmare. The same is true for systems based on custom calculations. In contrast, Oracle EPM provides true out-of-the-box models for the majority of your cash flow drivers, models and reports, which will enable the types of speedy accurate decision-making you need in this critical time and support easily maintained custom calculations if needed.

Strategic modeling

The strategic modeling business process in Oracle EPM enables rapid analysis of vital cash flow. This is ideal for what-if modeling of business risks, simulation of long-term alternative strategies, stress testing financial models and development of contingent scenarios, or even modeling how to fund M&A opportunities. You can easily run various scenarios at different levels of granularity within the organization, giving you much greater insights and capabilities than trying to manage these models with spreadsheets.  Baker Tilly client organizations have used this functionality to renegotiate more favorable terms on debt covenants, refinance debt, model-hedging strategies, determine M&A options, decide whether to dissolve unprofitable revenue segments, and reinvest in creating new business lines. Oracle’s patented Strategic Modeling is the most powerful tool available to ensure you can confidently make quick game changing decisions accurately, so your team can be prepared to navigate these difficult times.

Execution

Oracle’s EPM Cloud solution offers out-of-the-box driver-based modeling, trend-based planning, and predictive analytics built right into the solution. This allows your planners to quickly update their plans. From conducting what-if analysis, using numerous versioning options, or simply entering their sales numbers, your knowledge workers across the business can easily input their key metrics. This allows you to get accurate reports and analysis so you can confidently make decisions at the speed of business.

Workforce

Another vital part of your organization is your workforce; one in which you have probably invested heavily.  In most industries, it is the most expensive and important line on your profit and loss statement. Modeling how to fully maximize your workforce will be key to a successful recovery. Understanding the skill sets, availability and mobility of your resources and candidates could mean the difference in not only mitigating financial impact, but also maximizing recovery and productivity. Utilizing an EPM solution such as strategic workforce planning will ensure you have the right supply of people to meet the demand now and in the future.

We are currently in a time of crisis, but also poised for a time of recovery. The right solution such as EPM can help your organization understand how to navigate this crisis by gaining insights into your cash flow and how to prepare your workforce for what’s next.

If you have questions about how EPM can help your organization, please contact our team.

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