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Financial planners at a medical device company saved about six weeks of time after the company replaced Excel with Host Analytics software for forecasting and modeling a budget.
With the financial forecasting software, planners for Welch Allyn became more consistent and accurate with forecasts and much better at accounting for costs of employees and exchange rates for 15 currencies, said Rick Odom, senior manager, financial planning and analysis at Welch Allyn.
Planners take about two to three weeks to complete rolling, 18-month profit and loss statements and budgets in the Host Analytics Planning Cloud platform. With Microsoft Excel, the process could stretch out to two months, Odom said.
The company holds 25 software-as-a-service licenses for the financial forecasting software from Host Analytics for users in offices around the world, he said.
"We've improved because we can do a forecast that quickly and that regularly," he said. "It's the same with our budget. It has speeded up our budget process."
Looking beyond SAP for financial forecasting
The company implemented the cloud software with a Host Analytics solution architect based in St. Louis and with no help from IT, he said. Upgrades from Host Analytics are seamless, he added.
Even though Welch Allyn is a longtime user of SAP software, he said, it would not have been easier to choose SAP for financial forecasting software.
The company uses on-premises SAP software, for example, for ERP and human resources.
The company also contracts with IBM for IT services. "Any time you do anything to SAP, you need support," Odom said. "It is not something finance people can support. We need to go to IBM if we need to reconfigure and they will quote us a price to do that."
Host Analytics seemed very familiar from the start, he said, because it is Excel-based and looks like Excel. He said financial forecasting software is essentially Excel with a database behind it.
Excel still useful for the details
Excel retains some staying power. Planners still use Excel spreadsheets for pulling data from the ERP and some analytics, such as trending on specific product lines, he said. A big plus with Host Analytics is that the finance department can also support the cloud software, with any configuration changes, training users or developing reports, for example, he said. Welch Allyn does not need to use limited resources to pay IBM for support and experience possible delays.
The 100-year-old company, located outside Syracuse, N.Y., manufactures medical diagnostic instruments and sells in 80 different countries.
The software has not eliminated swings in estimating revenues and expenses, but the company is more accurate in some areas, he said.
When forecasting, it is easier now to build in consistent drivers, or operational activities such as a new product, erosion in prices of medical devices, or employee costs, he said. These consistent drivers can be used across the company rather than have each site put its own twist on things, he said.
Financial forecasting software gives analysts more time to think
With Excel, forecasters spent a large amount of time verifying numbers before analyzing them, he said. Planners would need to double check that they had the latest version of the figures, and check to ensure that formulas and inter-worksheet links worked correctly. This work in Excel has now been eliminated, giving analysts more time to step back and think about what drives the numbers and what is appropriate, he said.
Odom said the company decided against initially integrating Host Analytics with the SAP ERP system for the general ledger.
"It's very difficult to get financial data out of SAP," he said. "The tables in SAP are very complex. Rather than bog ourselves down, I have found ways to pull the data out of SAP for reports, which I can easily get in an Excel format. Once you have an Excel format, it uploads very easily into Host."
When the company closes its books for the month, including totaling general ledger accounts, it takes a few minutes to upload the data from the ERP and then do most of the reporting from the Host Analytics tool.
In March, June and September, financial planners in each of seven regional financial sites around the world complete 18-month profit and loss forecast and budgets. Forecasts and budgets are also completed for six or seven product lines. The forecasts are consolidated and the one in September becomes the budget for the following year.
"Once we close out the last month of the quarter, we update those actuals, maybe tweak it a little bit more and then we start using the forecast until we get to the end of the next quarter and then we start again," Odom said.
Human resources planning, too
The company, which has 2,500 employees, also uses Host Analytics for workforce planning. For example, before the company completes a forecast or budget, it downloads information for all employees including salaries, bonuses and benefits.
"It is a time saver because all the calculations are done automatically in the software," he said. "Your salaries and benefits are all spit back out. You don't have to deal with it. It is also is very easy if you are adding employees, transferring employees or terminating employees. We do that in the software and it will recalculate what the costs are."
When using Excel, it was a struggle to account for employee information, he said. It was difficult to know the numbers of employees being added to the budget or transferred, he said.
Planners in each office would need to ask human resources for the numbers and salaries of employees. HR would dump the information into Excel and the planners would do their own calculations to come up with numbers.
The software allows planners around the world to forecast in their home currency. After exchange rates for the currencies are loaded in, Host Analytics converts the information into U.S. dollars so the forecasts can be consolidated.
Odom said he also likes the service from Host Analytics and the cloud in general.
With the on-premises ERP from SAP, Odom said, each upgrade requires testing and demands attention of finance leaders.
On the other hand, Host Analytics completes enhancements and improvements with no disruptions to the business, he said.
"It's been a great relationship," Odom said. "It may sound a little bit contrived, but we don't have any major complaints at this point."
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