Finance executives and managers in every business are under tremendous pressure to make realistic and achievable projections regarding key financial metrics such as revenues, COGS, and gross margins. In the face of today's extreme business volatility, they are struggling to capture the impact of rapid changes in costs and operational drivers, and to incorporate them into their financial planning process in a timely manner to support proactive decisions.
Existing planning solutions in finance and operations provide little value in addressing the margin planning challenge. Today's financial planning systems make simplistic assumptions on costs and do not model concepts such as bill of materials and production lead times. On the other hand, while supply chain planning applications do model the supply complexities, they are invariably unable to support interactive what-if analysis on these cost drivers and to tie the impacts of the demand and supply changes to the financial world. As a result, financial planners typically struggle with offline spreadsheet models to manually piece together a reasonable picture of costs and margins. This results in substantial value loss from ineffective margin management and poor productivity.