Financial consolidation is the engine that keeps the finance department in motion. Yet, organizations regularly pour huge investments into systems that continue to disappoint – and really, cause more hindrance than help. I’m pleased to announce that we have solved that with no, not yet another expensive and time-consuming tool, but with a cloud-based application.
The Financial Consolidation Pain
As a company, you publish books and financial statements. Consolidation is the act of combining the books of a company’s subsidiaries into a single group economy, so that you can see the complete financial picture. This process is extremely necessary but historically ungainly; each subsidiary produces its own accounts, and then they all must be combined. This is exponentially complicated when you consider all combinations of parameters that drive consolidation calculations: currencies, intercompany transactions, consolidation methods, versions such as actual and forecast, and many more.
The Anaplan Answer
Old solutions just do not work in today’s economy and consolidation is no exception. While integral to finance, financial consolidation has historically been a huge burden on time, resources, and team sanity. Anaplan’s financial consolidation app reverses all of that. We have completely rethought the whole process to leverage fully today’s technology and eliminate every wasted second of your precious time. This series of blog posts will focus on several aspects of Anaplan’s Financial consolidation application, and explain how Anaplan radically simplifies and accelerates the overall consolidation experience, from setup to financial statements production.
Today, let’s focus on immediacy and what it means when it comes to consolidation:
Immediacy Benefit #1: Rapid Setup
Remember the (not so good) old days? Setting up a new app entailed new hardware, getting the right versions of base software (OS, DB), and an overly complex installation process. Very often, it could take weeks until you could even simply access login screen. And then, the tedious but necessary task of application development began in order to transform a toolbox into something useful. This could take months, and required development skills to deal with the scripts that had to be written.
Now let’s consider Anaplan.
You’re up and running in three simple steps:
- Access Anaplan: all you need is a browser and an internet connection.
- Copy the Financial consolidation app into your environment: this takes no more than a few minutes.
- Configure the app: Yes – configure. No script, no development. The application is fully comprehensive; all consolidation logic is already built-in. You just have to load your chart of accounts and organization structure, and you’re good to go. This took half a day at one of our customers.
So we’re talking about hours, not months (or even years).
Immediacy Benefit #2: Real-time Consolidation
As discussed earlier, consolidation is a complex process that involves many different parameters. As a result, legacy solutions run calculations in batch. This means that you have to wait tens of minutes in the best case (and hours in most cases) to measure the impact of a journal or a data load on consolidated statements.
Anaplan’s ability to perform complex business modeling in real time is fully leveraged in the app. There are no batch runs: every time a number is entered, or a journal is posted, consolidated statements are updated in seconds. You can analyze the impact of a change immediately.
The benefit is huge. The batch concept forced consolidation to become a waterfall process: data loads, then validations, then currency conversions, and then… the process goes on and on. This is very inflexible; huge costs (in time and energy) are incurred to go back to a previous step. By comparison, consolidating with Anaplan is fully flexible; all tasks can be parallelized. The system is always up-to-date. While this is great for actuals, just think about the benefits for forecasts or simulation.
Welcome to agile consolidation.
Immediacy Benefit #3: Continuous Upgrades
We talked about immediate setup. Another big pain is upgrades. Whenever your preferred vendor comes up with new features, it very often turns into a new project with all the initialization pains we have already discussed.
With Anaplan, you get access to new features immediately. We take care of the entire upgrade process. That releases you from waiting for years before you finally benefit from the latest developments of the platform.
So, to recap: very fast setup, real-time financial consolidation, and continuous upgrades are three examples of how Anaplan’s technology dramatically impacts the financial consolidation process.
Stay tuned for more examples to come in the next consolidation application blog post.