What is Financial Modelling?

Financial modelling is a superpower. 

A superpower that lets you test your assumptions and hypotheses across dimensions, versions, and time before executing budgets and plans. 

A well-formulated model lets you run unlimited scenarios across any program, department, or business unit according to your fiscal calendar or other business milestones. In other words, dynamic financial models show you the probable results of pulling various levers (e.g., adding headcount, reducing production time, expanding sales territories) to see likely outcomes. 

Not exactly X-ray vision, but close. 

Yet if financial modelling is a superpower, outdated tools and manual processes that limit the number and types of scenarios you can run are kryptonite. 

Let’s look at how to generate flexible and robust financial models powerful enough to drive strategic decisions and help your business surpass the competition in a single bound. 

Manual processes undermine your models. 

Ideally, financial models should be robust and flexible enough to accommodate current circumstances and multiple queries. If your team is bogged down aggregating data from multiple sources and making sure spreadsheets are accurate, modelling takes a back seat to fix errors and broken formulas. 

According to an Adaptive Insights CFO Indicator Report, 71% of finance teams manage data from at least three sources. When data is aggregated manually from multiple sources and managed in spreadsheets, it’s often laborious, error-prone, and inaccurate. 

Financial modelling that works in today’s fast-paced business models should automate these processes and free your time to test your hypotheses. 

Properties of robust models 

Robust models should let you model everything, everywhere—expenses, capital, headcount, revenue, projects, grants, quotas, and territories—across any department, entity, or function. 

Your financial model is an opportunity to check in with stakeholders, gather information about priorities and plans, and create a set of assumptions that improve decision-making throughout your organization.

 Done well, financial models teach you and the people in your organization something: a new way of doing business, in-depth information about the competitive landscape, or the factors that might support or detract from corporate objectives and KPIs. 

Robust and effective financial models should accomplish the following: 

Establish a single source of truth with Financial Modelling

A single source of data truth that is accessible, relevant, and flexible enough to respond to emerging market conditions ensures that there’s a united front and full alignment behind the same objectives. When everyone agrees on the validity and accuracy of the data, there is less bickering over the numbers and more collaboration between business units. 

Build confidence in the numbers 

If everyone is fighting about the validity of data sources, the process will be caught up in arguments instead of strategic decision-making. From extensive cost allocations, multiple budget versions, and various organizational structures, your financial models and analytics should build confidence in the numbers and the models. 

Automate calculations 

Outdated tools and manual processes take too much time to generate insights. By automating planning, budgeting, and forecasting tasks, your team will have more time to run unlimited what-if scenarios and answer multidimensional queries in real-time. 

Enable collaboration 

Everyone in your organization is modelling—whether they know it or not. By making financial data modelling tools broadly available to business units and ensuring that tools are user-friendly, you’ll allow everyone to weigh in—on assumptions about headcount, product releases, and more. After all, true collaboration results in better financial models. 

Modern modelling requires modern tools

Modern businesses require financial modelling and analysis capabilities that enable on-the-fly queries, limitless what-if scenarios, and testing. Proliferating data, outdated tools, and a rapidly changing market make continuing with the same-old, same-old a strategic mistake. 

The solution? 

An intelligent, scalable, and comprehensive cloud-based planning platform that gives you the power you need to support the sophisticated and robust financial planning, modelling, and analytics modern businesses require.


What is Corporate Performance Management (CPM) Solution and Why is it Different From ERP & BI?

Cloud-based CPM applications for enterprise planning, financial consolidation, management and regulatory reporting, and budgeting and planning analytics are implemented by us to address the challenges faced by clients dealing with unwieldy Excel spreadsheets and the need for autonomous IT operations.

Companies often try to use a single product to support business processes that are very different. Still, it is essential to note that software vendors often promote their solutions as one-size-fits-all. When encountering such claims, it is crucial to consider that there is typically a conceptual alignment with an all-purpose platform. You should be wary of the very high costs that come with these sites. Frequently, this stems from a lack of understanding regarding how modern technologies effectively support various business processes. We have seen companies spend much money on platforms that aren’t very specialised to solve problems that could have been solved with purpose-built apps for a fraction of the cost. So, in today’s business world, finding the right tool for each business need is more important than ever.

There appears to be considerable confusion surrounding the term “analytics.” Executive stakeholders seek to adopt a cost-effective, platform-centric BI strategy that experiences strong user adoption. However, they often become perplexed by the array of products and terminologies that sound similar when presented by salespeople. To alleviate some of this confusion, it is crucial to understand the fundamental differences between Corporate Performance Management (CPM), Business Intelligence (BI), and Enterprise Resource Planning (ERP). These three technologies should coexist harmoniously, each serving their respective roles.

ERP – CPM – BI: the definitions per Gartner

a. According to Gartner, CPM is an umbrella term that describes the methodologies, metrics, processes, and systems used to monitor and manage the business performance of an enterprise. The most commonly used functionalities include financial consolidation, reporting and disclosure, budgeting & planning, and analytics.

b. Gartner defines BI as an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance. Commonly used functionalities include data discovery, visualization, and big data.

c. ERP applications automate and support a range of administrative and operational business processes across multiple industries, including line of business, customer-facing, administrative and asset management aspects of an enterprise.

Enterprise Resource Planning (ERP) is not Corporate Planning Management (CPM)

The company supported CPM functionalities concerning data collection and data validation through the utilisation of ERP technology. Similar to many companies in Singapore, certain overseas subsidiaries employed a different ERP brand compared to the platform utilised at the head office.

Consequently, data collection became a daunting task for these overseas subsidiaries. The monthly reporting had to conform to a journal entry format to align with the corporate ERP. Mapping the local chart of accounts to the corporate chart of accounts and translating the functional currency to the corporate functional currency were carried out using Excel. This resulted in a convoluted process that lacked transparency and was highly susceptible to errors. The overseas subsidiaries had to exert substantial effort to deliver the monthly reporting to the corporate centre. Non-financial reporting, such as headcount figures, had to be generated outside the corporate ERP and typically relied on Excel.

Business Intelligence (BI) is not CPM

A company sought to use BI technology to help CPM support financial unification functions. However, the BI tool could not cope with the currency conversion of equity at a historical cost. Consequently, their worldwide operations always had to recalculate the consolidated equity and especially the currency translation reserve in Excel.

In addition, the BI tool didn’t have any features for process control. Its database would always have the most current data set, so the business centre would always aim at a moving target. Since reported times couldn’t be closed appropriately, corporate reports usually show data that is constantly changing because prices are always changing.

Shearwater & Workday Adaptive Planning

As you can garner, it highlights the importance of addressing the corporation’s business processes, each with the right technology. Neither EPR nor BI is meant for integrated Business Planning & Analytics applications. With prominent CPM solution Workday Adaptive Planning and Shearwater’s professional service, you can enjoy best-in-class enterprise planning software that gives you the unique power to plan, execute, and analyse in one system. You can make better strategic decisions more effectively and achieve greater business efficiency, agility and growth.

Shearwater Taiwan Group Named Winner of the FY23 Solution Provider of the Year Award – Rising Star

Shearwater Group announced it was named a winner of the FY23 Solution Provider of the Year Award – Rising Star by Workday. The awards were announced during the Workday Sales Kick-off on February 28, 2023.

The FY23 Solution Provider of the Year Award – Rising Star acknowledges Asia’s top-performing Workday Adaptive Planning Solution Provider, achieving the most tremendous year-on-year increase in joint business with Workday. Additionally, the award recognizes the provider that has secured the largest Workday Adaptive Planning deal in Japan during Q4. Workday Adaptive Planning is a powerful tool that facilitates ongoing enterprise planning for finance, workforce, sales, and operations.

The Shearwater Group is a company that specializes in business transformation in Asia. They have offices in different parts of the region, including Singapore, Japan, Korea, China, Hong Kong, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines. With their expertise, they help other companies optimize their performance by utilizing technology. They have dedicated templates for various industries, such as high-growth technology companies, services, distribution, manufacturing, hospitality, and non-governmental organizations. By using Workday Adaptive Planning, businesses can achieve continuous enterprise planning for finance, workforce, sales, and operations and enjoy its benefits soon after implementation.

With extensive industry experience and a wealth of technical skills, the Shearwater Group also helps companies integrate disparate systems into Workday Adaptive Planning by collecting data from multiple sources and giving one comprehensive picture via Workday Adaptive Planning. 

The Shearwater Group is part of the Workday Adaptive Planning Solution Providers Program that delivers deployment services to a customer base of more than 6000 customers.