Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

FP&A that Delivers Value in the

Subscription Economy

• Benchmark your FP&A practices against those that

define success in a recurring revenue business

environment

• Define the metrics that drive performance at your

company

• Increase the value delivered from the FP&A function at

your company

After attending this event you will be able to:

Learning Objectives

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Welcome to Proformative

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

FP&A that Delivers Value in the

Subscription EconomyEileen Tobias, VP of Financial Planning & Analysis, NetSuite

Agenda

• FP&A – Challenges Today

• Planning - Business Strategy and Value Creation

• Planning Cycles

• Designing an Effective Process

• Process Overview

• KPI Framework

• How Cloud Helps

• Key Takeaways

NetSuite: World’s #1 Cloud ERP

Top 10 Cloud Companies

to Watch

#1 Cloud ERP Suite Industry Recognition

Fastest Growing

Top 10 FMS Vendor

3rd Year RunningBest Financial Management

Best Cloud Infrastructure

World’s most deployed cloud ERP

Used by 20,000+ organizations

Fastest growing top 10 ERP

Used across 150+ countries

Founded 1998

Publicly traded on NYSE: “N”

Offices in 10 countries

3,000+ employees

$414.5M revenue FY13 (34% Growth)

Background Performance

FP&A – Challenges Today*

• Confronting Global Change - not fully equipped to analyze and deal with new business risks leading to forecasting and transaction processing errors.

• Strategic Initiatives – FP&A is increasingly is tasked with contributing to organizational strategy, as well as meeting demand for operational insights.

• Getting Insights - data is not translated into information quickly enough to be useful to business units.

• Single View - information is not sufficiently detailed to be meaningful. A unified view to data and information is essential to gain visibility to financial and operational performance.

• Closing and Reporting - takes twice as long for an average company vs. a world-class enterprise.

• Lacks a Standard Discipline - example standard chart of accounts, common processes, globally mandated standards, common data definitions etc.

• Information Gathering Process necessary to generate timely, relevant insights can be extremely challenging.

• Inefficient Budgeting & Forecasting - iterative processes that frequently yield inaccurate results.

• Internationalization - diverse business structures, assorted systems and processes*Rethinking the FP&A Operating Model – FTI Consulting

Planning - Business Strategy and Value

Creation*

Basic Practice Progressive Practice Benchmark Practice

Process

Characteristics

• Annual plan with no long-

term forecast

• Strategic initiatives not

quantified

• Strategic planning is

short-term and reactive

to immediate problems

• Annual plan with re-forecast

during year, long-term forecast

independently managed

• Strategic initiatives are

prioritized and approved

annually, but not translated into

targets

• Strategic planning focuses on

improving current operations

• Long-term forecast integrated with annual

plan, budgets, and revised interim

forecasts

• Strategic plan and strategic initiatives are

core inputs into planning process

• Strategic planning focuses on realizing a

3-5 year vision that addresses most

critical market and organizational

challenges

Business

Integration

• Planning is a nuisance:

Business ignores targets,

participation is a

necessary evil to avoid

corporate retribution

• Planning is tolerated: Finance

establishes a plan and everyone

accepts the need to complete an

orderly and accurate process

• Planning is core: Planning process is

critical to governing business decisions,

goal setting, and performance

management

Value Finance

Brings

• Finance acts as the

steward for the process

to assure some minimal

level of accuracy amid

business pushback

• Finance strives to be an efficient

process operator to minimize

pain and assure accuracy

• Finance is a strategic player that uses the

planning process as a catalyst for

achieving performance goals

*Rethinking planning, budgeting and forecasting - A Deloitte perspective

Leading Practices in Planning Cycles*

*Rethinking planning, budgeting and forecasting - A Deloitte perspective

Planning, Budgeting and Forecasting -

Principles

• Our Philosophy

• Fund top line growth while maintaining profitability and generating cash

• Focused and valued externally on revenue growth

• Forecast used to manage the business

• Robust feedback loop between Finance, Executive team, and business owners

• Top-down approach

• What do we forecast?

• Revenue, Expenses, Deferred Revenue, Operating Cash Flow

• Rolling eight quarter view updated monthly

• P&L forecasts saved as different versions in Financial Planning module

• Forecasts that are unique to SaaS companies

• Deferred Revenue

• Customer-level revenue forecast by month

• Churn

• Headcount – expense lever

Planning & Forecasting – Designing an

Effective Process

Integrated Planning Capabilities

Forecast Inputs and Outputs

Thank you for your interest in this presentation.

View the on-demand webinar or download the full

presentation at:

www.Proformative.com

FP&A that Delivers Value in the Subscription

Economy