Dave Kellogg, CEO at Host Analytics, examined the alignment between financial and operations and its impact on today’s businesses during his presentation with Argyle’s CFO membership at the 2015 Chief Financial Officer Leadership Forum in New York on Nov. 5. In his presentation, Kellogg explained how enterprise modeling tools can help businesses link operational plans and models to their financial plans.
Kellogg noted that financial budgets are driven top/down and commonly used to set targets and serve as compensation tools. However, he also pointed out the need for operational plans and models that are built from the bottom/up and act as living documents, that must remain flexible as business conditions change over time.
But the problem is that in most enterprises, the operational plans and models don’t align to the financial plans – which often leads to results that miss expectations, Kellogg pointed out. As such, Kellogg said businesses must identify ways to bridge the gap between finance and operations: “We need to figure out how to tie the operations analysts and their models together to the financial team and plan and we also need to figure out the appropriate use of Excel. Because our vision is that we really want to be able to unite finance and operations.”
Also, Kellogg noted Host Analytics provides cloud software to help with financial and operational planning and modeling, a process that is becoming increasingly important for today’s businesses. Enterprise modeling tools can help a business tie together various data, and ultimately, improve its decision-making processes, Kellogg added: “If you’re trying to build a plan for hiring 10 new sales reps, the Finance guys are thinking about compensation, benefits, office equipment, facilities allocations and depreciation. But the Sales Operations plan needs to factor in ramp time for new reps, quotas, incremental sales, and commissions. We argue, those two things need to tie together, but they really are kind of different lobes of the brain working when you think about scenario analysis and planning.”
ABOUT DAVE KELLOGG:
Dave Kellogg has more than 20 years of leadership experience at high-growth companies.
His experience includes being CEO of MarkLogic, CMO of Business Objects, and member of the Aster Data Board of Directors. Dave also served in advisory roles to MongoDB developer 10gen, Hadapt, and Tableau Software.
Prior to joining Host Analytics as CEO, Dave served as senior vice president and general manager for Service Cloud at salesforce.com, overseeing one of the company’s fastest growing businesses. Previously, he spent six years as CEO at MarkLogic, growing the company from zero in revenues to an $80M run-rate. Before that, Dave led Marketing at Business Objects for nearly a decade as the company grew from 250 to over 4,500 people and from $30M to over $1B in annual revenues.
A recognized industry thought leader on topics ranging from venture capital and Silicon Valley culture to cloud, big data, and social enterprise technologies, Kellogg authored a highly regarded blog for five years and remains active on Twitter @Kellblog.