Long Range Planning

Most financial plans for evaluating long range strategies are developed using spreadsheets and most have the same problems — cell formulas too difficult to trace, inputs spread across multiple sheets, links too easy to break, and structures too difficult to maintain.

With flexible time periods and no requirements for using account codes, Alight Planning solves these problems and lets you create any type of long range or strategic financial models in 80% less time — with fewer errors and with a seamless transition between strategy and operational budgets.

Translate strategy into long range financial models
Evaluate models using sensitivity analysis and scenarios
Integrate long range models with budgets and forecasts

Translate strategy into long range financial models

Alight Planning is activity-based planning, the fundamental tool for translating strategy into a financial model. With spreadsheets, strategic thinking and financial models are typically detached. With Alight, long term thinking and finance are interactively linked.

• Underlying assumptions about activities and the costs or prices of each should drive the long range financial model. In spreadsheets, such assumptions are spread over across multiple worksheets or workbooks. In Alight, they are integrated and linked: you change and monitor assumptions from one plan file with complete visibility into underlying activity units and rates.
• Activity-driver relationships — Activity based planning is about creating an interactive financial model that lets you build and modify complex structures and observe the financial impacts. In spreadsheets, building structures with formulas takes time; changing structures nearly always creates errors. Alight's intuitive architecture and unique interface for linking makes it fast to create activity driver relationships and safe to make changes.
• Rolling up details to financial statements — How often have you heard (or said) this: "That's a good question... let me update the spreadsheet and get back to you..."? With Alight, you can identify and make changes in real time with instant updating of the activity model and roll ups to the P&L, Balance Sheet and Cash Flow.

Evaluate models using sensitivity analysis and scenarios

Understanding the sensitivity of assumptions and constructing scenarios that depict alternate outcomes are critical activities to evaluating and refining a long range financial model:

• Sensitivity analysis is the process of changing individual assumptions to understand impacts on a financial model. You do this to focus market research and operational resources. Alight has built-in sensitivity analysis tools — for any target such as sales or profits, Alight generates a list of input assumptions ranked by the amount of the financial impact on the target.
• Scenario analysis is the process of changing a series of assumptions and measuring the impact on profits, capital requirements and other measures. Scenario analysis is particularly important for testing impacts of alternate timing of milestones such as completing a product development — a difficult and error-prone process with spreadsheets. Alight incorporates a broad range of tools for scenario analysis including comparing scenarios at the line item level.

Integrate long range models with budgets and forecasts

Alight Planning integrates long range plans and strategic thinking with operational budgets and forecasts. In the world of spreadsheets, varying plan structures make the process difficult at best, if not impossible. With Alight, integration is built into its very structure.

• Market planning — Spreadsheets typically incorporate models for revenues by product, region, channel and customer types across multiple workbooks with a disparate structures separate from expense and capital budgets. With Alight, it's seamless.
• Levels of detail vary between strategic plans and budgets: longer time horizons for strategic planning; different line item and modeling structures for each; and different rollups to financial statements. With Alight, you can roll back and forth between levels of detail.
• Accounting structures drive the budget process — revenue categories, cost centers, and natural class accounts. Accounting structures are at odds with long range plans based on activity drivers that have no accounting reference. As a consequence with spreadsheet planning, budgets and strategic models don't talk. Alight bridges the two structures for integrated and consistent planning.