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>My personal hope is financial analysts get more tech savvy over time. Probably won't happen and isn't important imo. If somebody can dig SQL/Python/R then so

by tpuser 5y ago

>My personal hope is financial analysts get more tech savvy over time. Probably won't happen and isn't important imo. If somebody can dig SQL/Python/R then somebody can get paid more to do something other than count beans (speaking here of lowest level financial analysts [accountants]; I was probably the only person at the division trying to make a meaningful financial forecast that was more detailed than a top level number with zero transparency. I started w/ python but wanted a COTS solution. Didn't want to babysit it.). >Better use of databases would allow one spreadsheet with a database to store the changing inputs. This is the key. The number one complaint of every other business area was that forecasts came in asynchronously and it was impossible to tell whether what had been added or removed was real. Hallway conversations took the place of structured data. That's fine for many things, but not for projections which determine whether we need to hire twenty more engineers or let go of a dozen. The product that would've solved the problem (and then some) was IBM's TM1 (now "Planning Analytics powered by TM1"). My model worked well in TM1 and could've been extended to being better than a calculated model--the direct inputs from the dozens of IPTs could have been collected without the need for any math used to back out of numbers. No "model", merely the collection of demands of every program and every potential contract. The program teams already generated all of this data; finance threw most of it away while rolling it up. TM1/PA has Excel plugins which render the change invisible to the financial analysts doing the work. Their job doesn't change but the organization can hoover up more data by at least an order of magnitude, breaking the cycle of relying upon opaque, top-level numbers that no other business area actually trusts.

andrewlgood 5y ago
I think one of the communication challenges in this broad discussion is what is a "finance" person. Several people refer to them as people in Accounting (accountants) when I think they really mean Financial Planning & Analysis (FP&A analysts). Within most Finance organizations there is a big difference. Accountants (particularly early in their career) focus primarily on the past and properly describing it in the general ledger following accounting rules (e.g. GAAP / IFRS). FP&A analysts (should) focus on forecasting the future, then looking at what happens and describing why it differed from their forecast (variance analysis) so they can make a better forecast next time. I agree with you that it is unlikely accountants will learn SQL/Python/R. They are tied to their ERP and Excel. My hope is the FP&A analysts will develop the SQL/Python/R skills to enable the better/faster development of complex models to forecast. >The product that would've solved the problem (and then some) was IBM's TM1 I have not used TM1, but have heard many good things about it. Today I hear more people discuss Workday's Adaptive Planning than any other product in that class. Unfortunately most are still creating their primary forecast in a spreadsheet, then loading it into the TM1 or Adaptive which then has additional rules to build out the forecast. I agree that using these types of products increases transparency and speed.
- tpuser 5y ago
  >I think one of the communication challenges in this broad discussion is what is a "finance" person. Several people refer to them as people in Accounting (accountants) when I think they really mean Financial Planning & Analysis (FP&A analysts). Noted and agreed. I'm not well versed in finance lingo beyond what I learned by taking up a business analyst role. The distinction you mention was likely lost on me due to the fact that this division didn't really have an FP&A team and every accountant was given the title of "financial analyst". Sure, FSS made projections, but those were all terrible. They were worth less to functional managers than the paper they had been printed on. A given year's labor forecast came in the form a single column of multimillion dollar (Ex)cells per cost center. No ability to dig in. Consistently low by ~10%. Did leadership get a bonus by expanding the business book over the course of a year? Who knows?! FP&A was an afterthought for leadership. I was probably the only full-time FP&A employee (at an office with over 700 employees), yet I did not report to finance--I was under the program management umbrella for some reason. It didn't take long to recognize the potential value-add that our finance area could provide with a single change. Alas. Appreciate the replies. You probably feel my pain better than I do.

by tpuser 5y ago

andrewlgood 5y ago

I think one of the communication challenges in this broad discussion is what is a "finance" person. Several people refer to them as people in Accounting (accountants) when I think they really mean Financial Planning & Analysis (FP&A analysts). Within most Finance organizations there is a big difference. Accountants (particularly early in their career) focus primarily on the past and properly describing it in the general ledger following accounting rules (e.g. GAAP / IFRS). FP&A analysts (should) focus on forecasting the future, then looking at what happens and describing why it differed from their forecast (variance analysis) so they can make a better forecast next time. I agree with you that it is unlikely accountants will learn SQL/Python/R. They are tied to their ERP and Excel. My hope is the FP&A analysts will develop the SQL/Python/R skills to enable the better/faster development of complex models to forecast. >The product that would've solved the problem (and then some) was IBM's TM1 I have not used TM1, but have heard many good things about it. Today I hear more people discuss Workday's Adaptive Planning than any other product in that class. Unfortunately most are still creating their primary forecast in a spreadsheet, then loading it into the TM1 or Adaptive which then has additional rules to build out the forecast. I agree that using these types of products increases transparency and speed.

tpuser 5y ago
>I think one of the communication challenges in this broad discussion is what is a "finance" person. Several people refer to them as people in Accounting (accountants) when I think they really mean Financial Planning & Analysis (FP&A analysts). Noted and agreed. I'm not well versed in finance lingo beyond what I learned by taking up a business analyst role. The distinction you mention was likely lost on me due to the fact that this division didn't really have an FP&A team and every accountant was given the title of "financial analyst". Sure, FSS made projections, but those were all terrible. They were worth less to functional managers than the paper they had been printed on. A given year's labor forecast came in the form a single column of multimillion dollar (Ex)cells per cost center. No ability to dig in. Consistently low by ~10%. Did leadership get a bonus by expanding the business book over the course of a year? Who knows?! FP&A was an afterthought for leadership. I was probably the only full-time FP&A employee (at an office with over 700 employees), yet I did not report to finance--I was under the program management umbrella for some reason. It didn't take long to recognize the potential value-add that our finance area could provide with a single change. Alas. Appreciate the replies. You probably feel my pain better than I do.