Process flows
Processes and Reports
The strategic and program funding capability supports strategic planning by providing the ability to set time-phased financial targets at the strategic and program levels. The strategic budget is created by entering labor capacity and non-labor financial targets into the financial plan, then baselined to allow for variance reporting between the baseline and actual cost of delivery. This capability supports strategic investment planning by providing the context of budgets to analyze against demand, enabling you to assess your organization’s ability to take on new investments.
Video: Strategic and Program Funding Demo
Financial Targets Process Steps
Financial targets process flow
| Process Step | Description |
|---|---|
| Define labor costs |
Enter the cost targets for labor into the strategic financial plan. For this capability, the costs for labor capacity represent the investment “pot” of money that will be used to balance against the many demand priorities an organization is considering. Budgets may be created at any level of the Strategy structure on the Financial Planning Detail screen then spread down to lower levels or rolled up to higher levels. Alternatively, data may be loaded using a strategic financial load, then rolled up and edited. For more information: |
| Define non-labor costs |
Enter the non-labor costs into the strategic budget. These costs should be divided into the appropriate non-labor categories. Non-labor data is often entered manually, then spread down to lower levels or rolled up to higher levels as part of the larger budgeting process. |
| Define expected benefits and revenue | Enter the revenue targets and benefits for the strategic investment. These targets and benefits can be manually entered into the strategic financial plan. |
| Baseline financial plan | Following the input or roll-up of financial planning target data, a financial baseline should be taken to compare and track variances of the financials across time. |
Best Practices
Embrace adaptive funding
Capture changes over time to assess and manage funding changes at both the investment and portfolio level. Fund portfolios incrementally based on timeframe or stage-gate to evaluate investment progress and make course corrections easier.
Manage strategic funding and performance
The right strategic plan enables you to maximize the ROI from strategic initiatives. An investment-centric approach creates capital plans that integrate strategic and organizational financials to promote visibility and drive performance. Executives and others should be able to prioritize and rank investments based on their alignment with corporate strategies and financials.
Reallocate funding
A shift in strategy prompts an analysis of portfolio funding. Knowing the current spending on each strategic initiative provides a baseline for determining changes to support the new direction. Teams can determine new funding levels for each portfolio based on the updated strategy. This strategic management process encourages finance to create more flexible funding approaches to easily reallocate as circumstances require.
Capture benefits
Capture the benefits of strategic programs by how they add value and contribute to the strategic objectives of the organization. Track benefits over time and automatically calculate financial metrics such as IRR, NPV, ROI, and Payback Period, using dashboards to understand the performance measurement across the portfolio in an easy, visual way.
Plan at all levels
Support business plans at different levels – strategy, objectives, initiatives – with each having their own budgets, desired results, owners, and other key information to outline the plan. Identify both financial and non-financial benefits to be achieved to create value.
Build a business case
Enable stakeholders to build a strategic business case with capital and operating expense plans to achieve objectives, understand how funding is being spent, and reallocate as needed throughout the fiscal period.