Financial planning is at the heart of any successful business. The ability to build sound forecasts and adjust pricing and other factors to suit market conditions and consumer behavior often determines whether a company flourishes or flounders.
Aaron’s, a specialty retailer that sells and leases furniture, electronics, home appliances and accessories, is a $3 billion firm with more than 2,000 company-operated and franchised stores scattered across 48 states and Canada. The company’s focus on financial efficiency led to a major upgrade in software.
“Our revenue stream is heavily annuity based, as opposed to just straight cash transactions,” explains Ginger Bleess, manager of financial planning and analysis for Aaron’s. “We faced a significant challenge in planning and forecasting effectively because of the nature of the business and the limited forecasting abilities within prior software models.”
In many cases, relatively basic changes—such as a store opening or moving to a new location—broke existing models and formats. That required undergoing a fairly complicated process of rebuilding and reformatting the models, and then ensuring that analysts and other stakeholders had the correct model in hand.
The process could take between three and four days. “We realized that we had to start thinking about planning in a more organized way, which also meant including people outside of finance,” Bleess says. “We had to move beyond spreadsheets and mostly manual methods.”
This insight led the company, which is more than 60 years old, to a cloud-based business planning solution from Anaplan. The software-as-a-service (SaaS) system introduced a real-time calculation and modeling engine that makes it possible for the company to rebuild financial models in as little as 5 minutes. The software also supports a high level of collaboration and input within the organization.
“We recognized that there was a need to input data from operations personnel and various departments,” Bleess recalls. “This [solution] created a level of forecasting and financial accuracy that hadn’t been possible in the past.”
In addition, the hosted nature of the Anaplan solution was appealing. “We didn’t want the IT department involved with building data cubes—and waiting a week to have a tangible model available,” she adds. “We wanted a solution that was fast and allowed the finance department to build cubes and formulas on its own.”
The system, which went live in September 2012, has transformed the finance operation and the company, Bleess reports. Among other things, it has introduced the ability to conduct what-if planning and explore modeling simulations. “We can examine possibilities and potential results based on best- and worst-possible scenarios,” she points out
An added benefit to the SaaS approach is the ability to access data and financial models using a mobile device, anywhere and at anytime. This makes it easy for executives to tap into key data, but it’s also is a boon for store managers and district managers who may be traveling between locations or working from home.
Bleess says that reducing business planning from months to weeks—and producing models in minutes—has been transformative, enabling employees and managers to make smarter and better decisions. She summarizes the benefits this way: “We are able to operate in real time and view financial and business data in a way that wasn’t possible in the past.”