Video Transcription
Welcome. Welcome. Happy Wednesday. Welcome to annual planning part three, planning for the unpredictable, how to adapt your budget and plan for volatility.
If you've been with us in this annual planning journey parts one and two, we've learned a lot of things about how to collaborate with our leaders, how to plan for different scenarios, and now we are planning learning to plan for, what's to come, things that we can't predict, and learn new ways to address that. So a couple housekeeping items as always before we get started. This is a, webinar that will have a live q and a, so please feel free to pop all of your questions in the chat. We normally set aside thirty minutes for the webinar content, and then we'll have fifteen minutes at the end where we'll dive into the questions, and answer any and all things that you may have to ask. We do have an upcoming webinar later in October, and I will be sharing more information on that at the end of, this session as well as some additional resources and recording if you love what you see here and want to see what else we've got going on here at Qube.
So let me go ahead, and I'm gonna turn it over to, Chris Misha. I'm gonna go ahead and stop my sharing so that Chris can, get himself ready for the presentation. But Chris is one of our solution architects here at Qube. He has years of experience in FP and A, starting his career originally as a consultant, specializing in software implementation and automation initiatives. Chris has helped hundreds of clients evaluate and understand how business and tech can work together to make their finance teams more strategic. So without further ado, Chris, take it away.
Thank you, Jasmine. I wanna thank everybody again for joining us. I'm just gonna start off with a couple of slides, kinda set the stage here, get our agenda out of the way, and then we're gonna jump into Excel and do that product demo. So on our agenda today, that unpredictable.
Right? How to plan for things we don't know how to plan for? Mostly through what if scenarios, good hunch, a good guess. So to start, we're gonna go over some volatility and planning challenges that are common across our customer base and may resonate with some people on the call today.
Gonna lay out some ways that Qube can help overcome those challenges to that kind of, set the stage, and then we're gonna jump into the product itself and start tackling some of those challenges. And then as Jasmine mentioned, we're gonna go through some of these resources we have available for you guys, and we'll do that q and a at the end. So I'm gonna jump into Excel, or I'm gonna jump into my next slide now instead of, you know, kinda tee up everything. So the reality of volatility.
What some things that are going to occur out in the marketplace, out in the world at large that may impact our planning for the future? These market factors, inflation, interest rates, geopolitical uncertainty, those tariff restrictions, all the things that I'm sure we're all keeping our, eyes on in the news today that happens and challenges our business, our supply chains, and what goes on there. So price fluctuations, tariffs, those foreign exchange rates, how is the dollar doing globally versus other currencies, and how could that impact my business plan? And then, again, we know everything is interconnected, whether it's offshoring, onshoring, restructuring the company, project or supply chain delays, those revenue ups and downs we may plan for.
Nothing is just what it is. Everything has a downstream domino effect, so to speak. So maybe revenue goes up here, but it's gonna cost us more money to fulfill those contracts in the world where everything's in interconnected.
How does this affect one thing? Go down the supply chain, go down the chain of my p and l? How do I look at that full picture?
So some of the challenges a lot of organizations face when they plan for these things are, you know, we just talked about that everything was interconnected, but sometimes, sometimes, maybe my tools at my disposal are siloed, and that's a big challenge for me. How do I bring that all together? Constantly reworking in those spreadsheets. Right?
I have many iterations. What if I tweak a number over here? That doesn't look right. I need some input from a colleague on the West Coast, on the East Coast.
How do we collaborate? These budgets, these forecasts, these iterations, everything changes so quickly. Just like that, there could be a new vendor you need to onboard. You're switching to a new provider.
The price moves, things like that. It's hard to account for everything upfront. So how can we have many scenarios and figure out what's gonna work best for our business model?
Those resource constraints as well, a lot of time, at least in my experience and the people I work with every day, they may have the ideas on how to make things better, but they don't have the practical time to put these things to work. So how do I make one person feel like ten? How can I do these things more efficiently and effectively? So instead of having that idea on the right to work, I can actually operationalize that and put that in front of my leadership.
And just, again, being proactive. Getting ahead of things as opposed to reacting and saying, oh, no. Now what do we do?
So this is really where Qube comes into play. How do we integrate all those systems? How do we make that interconnectivity a reality not in not just out in the world, but in my model, in my plan, with my sets of data? How can I instantly make these changes?
How do I push data, pull data against many disconnected sources or collaborators across the globe that need to contribute to one business plan. Streamlining those workflows, setting up that who does what by when, making sure the prior step in the process is done before you move on, and everything is in front of everybody right at their fingertips. And, of course, all of this contributes to saving time, being more accurate, being more efficient, doing your cycles faster. So maybe the month end close process doesn't take a week or two.
It takes two or three days. Budget season is daunting at first. Maybe we do it once a year, twice a year, once a quarter. Can we really do this once a month?
Can we react? Can we be proactive?
Yes. Yes. We can. So with that, I'm gonna jump into a model now. I wanna cover some of the some scenarios we've laid out here.
Maybe they'll apply to some people on the call. I'll try and get a couple flavors on the agenda to see what that looks like. So I'm gonna jump into my Excel model now, and I'll go into my first page here. So I'm gonna tee up that scenario where I've got some budget, and maybe I wanna do another iteration of it.
I've got my baseline budget. Through Qube, I'm able to quickly create two scenarios in my back end. We've covered how to do this on a prior call prior webinar. If that's something you missed or you just need a refresher, we have plenty of videos, plenty of recordings, and you can always reach out to us to cover some of these use cases.
But I'm gonna start here. Okay. I've got two budgets teed up, but I wanna start iterating on number two and say, what if what if these things happen? Or maybe I've got some information to plan, and I wanna adjust accordingly.
So then I'm gonna go into this product input tab.
This tab's really flavored to be I'm looking at a specific product. I'm looking at TVs in this example. This is a electronics company we're looking at today, and I'm gonna plan for one product in particular. So let's go ahead and start making some updates.
I'm coming up on the end of the year. I'm getting ready for my holiday season, and TVs, they're gonna move at the end of the year as we start issuing discounts, we run promotions, so on and so forth. So I've got this historical trend rate of I'm offering about a fourteen percent discount on this model of TVs this year. Let's just say as getting prepared for the holiday season, I wanna increase these discounts, kind of plan for what maybe I'm not expecting.
So I'll do twenty percent to start just to keep it easy, doing a quick input here. And with that twenty percent discount, I'm gonna drive more units. So those units are coming out the door a little faster with my discounts. I'm gonna up my November here.
I got my Black Friday sale, and maybe I'll figure I'll do fifteen hundred in December.
This is good. I'm planning for this, but kind of those unpredictable things happen. Got an email from someone in supply chain. Great.
You're planning that, but we've got some supply chain issues. We've got some tariffs that are gonna hit our cost per unit here. We're gonna try and be conservative, and we're gonna just say, we wanna up this to thirty two hundred. We think it's gonna be about an eight percent increase, so I'm just gonna key that in at a high level for this particular product, and I'll go ahead and drag that over.
Now I've quickly tweaked some assumptions here. I'm gonna sell some more units, but I'm gonna be also issuing bigger discounts, and I've got this cost per unit baked in increase here. Towards the bottom of the sheet, again, I'm just looking at a particular product now. I'm looking at what this does to my margins, my net sales, so on and so forth. But what I've done in my assumption area here, I wanna publish and push this data to see how it affects all these things I've set up to calculate downstream.
So I'm gonna go ahead and publish this information onto my page. That's great. Now what does this do at the end of the day for these other margins?
So if I look here, with those increased costs and those increased discounts, I thought may have helped my business. It's looking like even though I am pushing more units, that gross margin is not going the way I want it. I need to do some additional analysis.
Maybe I come in here and I say, okay. Those discounts were great. I need to be a little more conservative in what I'm discounting now. Let's see if sixteen percent will work for me, and I'll drag that over. And then, again, same kind of mechanics here.
I'm going to scroll, and I'm gonna publish my data and see what that sixteen percent discount does for me. Got my success message. Now let's go ahead and fetch that down.
Okay. We're back in the green. Still not great. I wanna maybe to get into leadership, talk about our supply chain, how we can manage our pricing strategy moving forward. But at least I have a a more, coherent and connected idea of how this is gonna interplay for my specific type of product.
Now what I can do now is I can jump back to this high level variance analysis tab where this is just gonna give me my sales dollars, not necessarily my whole gross margin. And I'm gonna refresh this data and see what these impacts have done at a whole. So for me, even with those discounts, right, I've got that four million dollar increase in sales dollars across this TV lineup in general, or I know LED TVs, and that's gonna be a one point five percent driver across my products. But maybe I have sweeping changes.
I don't wanna do just one product. So this is great if you have a clean lens of focus on a specific product lineup. We could also do the same thing across many products. So I'm gonna jump into a tab like this where I'm looking at, some various metrics here.
I have ASP, sales dollars, units, etcetera.
For this one, I'm gonna change my ASP. Hey.
It looks like we're getting some supply chain issues. We've got those COGS increases. Maybe I need to pass some of these things on to the consumer. So I'll zoom in, make this a little easier to see for everybody on the call, and I'm looking at this general TV lineup. Perhaps we're gonna do some what if analysis on, okay, what if we bump this price up a little bit? I've got some historical rates in here, but I wanna start making a change. I'm gonna go ahead and start using these Excel formulas for me.
I'm gonna anchor this down, and maybe we multiply this by one point zero five to have that one or that five percent price increase. I'll carry this down and across moving forward.
Fix this real quick.
Carry this down and across, and then I wanna publish these changes and see what this does to my sales plan. So very quickly, I can action these insights. I can action these what ifs plan and see what everything looks like in the aggregate. Queue is gonna help consolidate, aggregate, move these things, and plan. So coming back here, again, I'm gonna fetch that down Let's see what these changes have for my model.
And it looks like here, that's gonna give me an additional nine hundred thousand in revenue to help offset some of those costs I had on the manufacturing side.
In conjunction with that, we can also look at discount rates in the aggregate. So maybe my return percent. We're switching manufacturers.
We're a little worried that, yes, we've moved manufacturers to a different country. That's gonna save us on those COGS. That's gonna give us that tariff exemption we've been looking for, but there's always a little uncertainty with that. Are they gonna really be able to execute that product that they said they're gonna deliver? I wanna be a little conservative in this plan. Let's just say I'm moving my headphones to a new country. They're gonna be manufactured there instead.
Just to be sure, I wanna put in a a clean twenty percent across the board on returns just to help me plan for that uncertainty.
Similar vein to what we've been doing, I'm gonna go ahead and publish this data, get this up, and then now it's gonna interconnect in my plan.
In conjunction with all of this, I have some inventory assumptions that I'm layering in. So if we take a look at these headphones here, I have a model that says, based on my supply in a trigger level, how many do I need to produce when I get this level? I've been tracking this over time. Traditionally, when I hit two hundred and thirty one units in my warehouse, I wanna up that call I wanna up that production.
I wanna trigger an order. But it looks like here for headphones, I've set that a little white. I wanna go ahead and bump this up to help plan for that so I don't have those supply chain lows I've been dealing with through the beginning of the year. So I'm taking a look at my unit sold month over month.
Gonna use a judgment call here. I think three hundred will do that, and there it goes. It's gonna help alleviate those concerns.
So very easily, I'm able to switch between individual products, high products, cost, revenue, rates, inventory, and have them all coalesce into a cohesive summary with just a couple clicks that allows stakeholders at large around the globe to be able to assess what's happening out in that business.
Now this is all going downstream, and this is great. And I love that I'm working in my spreadsheets here, but Qube has just recently launched our AI analyst that allows you to interact with a language model, a a chat like experience where you're just speaking in plain English and asking questions on what happened. So I'm gonna jump back into I'm gonna jump into web now and take a look at some of those questions I have set up. So if I go into here and take a look at this AI analyst, prior to the start of today's call, I set up, hey. What products of mine have the lowest gross margin in twenty twenty five? I want you specifically look at this budget scenario for me.
So it scanned through that budget for me, looked through that information, and identified some products for me. Again, those supply chain issues we've been looking at, maybe we need to take a step back and say, yes. We can move those manufacturing. Yes.
We can tweak the price. But do we wanna discontinue the product lineup at all? Maybe this isn't profitable for us. So looking at this one for me, point and shoot thirty five millimeter camera, pretty bad margins here.
That's not looking good for our business. So what we can do is we can come in here, look at this very quickly, have the analyst sweep through things, and then I can actionize those insights right back into Excel. Okay. Maybe I wanna do some point and shoot camera what if scenarios.
Jump quickly back into my model here and back into this product, and I'm gonna look for those point and shoot cameras and see if I can do some business analysis here to make this a little cleaner. So I'm gonna bring in data for this particular product lineup. And as you see, we're not doing so great. I think I need to offset these cost per unit to do this, and I'm gonna increase this ASP.
So I'm gonna just cherry pick. Let's do two fifty.
Jump that sell price up, and I'm gonna assume that's gonna have a reduction in how many units I'm going to sell, but it should at least help my margins. So maybe I'm gonna drop this down to, let's say, two seventy and then three hundred through December.
And I can quickly again, I can publish this data up here and see how everything flows downstream and starts impacting my margins.
So little better, but I think I still need to have a meeting at the end of the quarter here with my leadership team that cameras aren't doing so great for us. I don't think we have a path forward. Maybe we need to do something else in this department.
So we've covered that consumer product goods style of uncertainty, supply chain issues, moving the sale price, return rate, you know, trying to predict that offshoring and onshoring, manufacturing style. What if we remove the price? What if we move the cost? Now, hopefully, this resonates with some people on the call, but not everyone has a consumer product goods company. Maybe someone's selling software. So let's take a look at some of that.
I'm gonna open up a software style model now, and I will zoom in just to make it a little easier to see. So in this guy, we have a bunch of assumptions based in our leads, average deal size, some close rate, so on and so forth. But, again, as I mentioned before, everything's interconnected.
This feeds into other assumptions. Based on how many deals I sell, how many sales reps do I need based on my leads, how many engineers do I need to do to implement this product, so on and so forth. So let's go through some of that. So I've got a little uncertainty in my mid market.
I'm worried about churn, and I'm worried about because of that market downturn, I'm reading some reports on Bloomberg or my various letters that these mid market companies are really sensitive to price over the next few quarters, and I wanna make sure I lock those in. So what I'm gonna do is I'm gonna start off on my average deal size. This is a six month weighted average to tell me what I'm going to be doing in ACV, but I wanna have a pricing initiative here to kind of onboard more customers. So I'm gonna ignore what my actuals, my weighted average are telling me in this case, and I'm going to move into a more discretionary number.
I'm gonna drop my ACV down to thirty two thousand and see what that does for me moving forward. If I could type, that would be even better.
So thirty two thousand here, and then same thing on my close rate. I'm using this weighted average, but I'm gonna assume I'm gonna sign some more deals now because my price is considerably more attractive. Let's bump this up to forty percent.
So I'm gonna change a couple quick drivers here in my forecast to help get ahead and be proactive on this expected market downturn in the beginning of next year and try and capture that. So, again, I'm going to publish this data up to my cloud, and then as this is publishing everything in my back end, all these calculations I've set up to help me downstream are rethinking, recalculating, reconsolidating to give me that big picture. Great. I've got my success message.
Now let's review this at large. What is this going to tell me? I'm gonna jump into that variance report now. So this is a very high level by market type report, closed deals, booking, ACV, so on and so forth.
But, really, what I wanna focus my attention on here is this implementation manager number.
This one, I've got some assumptions baked in that any given manager, any given consultant, any given engineer that we have, they're only gonna be able to do so many projects at the time. So right now, we're budgeting. Hey. We need twenty five to fill our leads.
Let's see what it looks like when we increase our close rate. So I'm gonna go ahead. I'm gonna fetch this data down, and I'm gonna pull it in. Yes.
I'm closing more deals. Great. This is more money for me, but my ACB went down a little bit. It's gonna cost me an additional nine seventy to implement those deals.
And and it looks like based on my assumptions, I need to hire four more seats into my organization to fulfill those requirements.
So, again, even that this number is strictly it's not Excel calculated.
I'm not referencing anythings. I've done some work in advance. I've set up cube. I've set up some formulas to bake into my assumptions. Hey.
Based on my deals, based on my close rate, based on how much capacity anybody has, this is gonna plan on headcount. So as we talked about before, everything's interconnected. More deals, more money, but some more expenses to fulfill that.
Now I've got this plan to help me figure out exactly how many people I may or may not want to hire.
Let's jump somewhere else and look at what that hiring, what that seat's actually gonna look like for me.
So I'm gonna briefly go into a little headcount demonstration.
This really tees up into our next webinar where we're gonna go through headcount in detail. I just wanna tee us up a quick example, to show what that looks like. So I have a roster here, and I will collapse some things just to make it a little easier for everyone to see on the call. So I'm in my professional services area of my headcount roster now.
I just planned on more revenue. I know I need to hire a few more folks to fulfill those contracts. So let's see what it looks like to add somebody new. Right here, I've got some professional services employees.
Looks like I've got Peter Parker and Peter Griffin. Let's copy and start from there. Just give myself a starting point based on what they're doing. So I'm gonna insert that row here and start making some adjustments.
So when am I gonna hire this person?
Let's just do let's start let's do today. So they're gonna start right away. I'm super aggressive. So I'm gonna bring somebody on today. I'll have their contract terminating at the end of the year.
US, they're gonna be professional services. I do not know their employee ID yet. I'll switch that to be hired. Peter Parker and Peter Griffin.
Let's round out the Peter team. I'll bring in Peter Dinklage to assist. I hope that's how you spell his name. I will give him a consultancy role.
Level three employee, let's give him that annual salary of seventy five thousand.
Bonus, yes. Individual.
Unfortunately, mister Dinklage is not on the family plan. We've all watched the last season of Game of Thrones.
I figure he is in New York, and we'll say he's he saves a bit. He's looking towards the future. I was given that ten percent rate. So I've quickly added a new seat to my roster here in this what if imaginary scenario of we're adding a new hire.
What does this look like for us downstream? Again, similar functionality. I can publish this data. It's going to scan this table, scan those assumptions, say based on his start date, his salary is picking up starting in October.
I get my success message. Great. What does this look like now from a dollars perspective?
I'm gonna jump over into my OPEX variance report here. I'm looking at my professional services department for twenty twenty five. Let's go ahead and fetch some of that data in, and beautiful. Just like that, it's only working three months to the end of the year. Because I've done that work in my template, quickly adding that row, I see it's gonna cost me twenty eight k to add that seat. It's gonna be this much in salary, bonus, payroll, benefits, etcetera.
So taking a step back to recap on everything we've kind of looked at so far, everything is interconnected. There's many different volatile natures of the business world and just globe the global geopolitical scheme.
These interest rates, supply chain, tariffs, increased revenue, all of these factors may contribute to the alterations we wanna make in a business plan and various what if scenarios. We just covered one scenario today, but you could just as easily start from the same point, duplicate to scenario three, four, five, just like that, one click of a button. Use that as your starting point. Build from there. You have many different actors contribute to these plans. And most importantly, you can do it quickly, and you could see how everything flows downstream and attach your whole p and l at large and what this looks like at the big corporate picture.
So we've went through a lot in short order today. I wanted to give kind of everybody a little flavor of what their business may look like.
I'd like to, do a little q and a now, see if anybody has any questions, anything I could address, that came over the call.
Thank you so much, Chris. That was super helpful, to learn all of that. We do have a couple of questions. Great. One pertaining to the AI that you showed previously.
How can Qube's AI help with volatility planning, in more detail? Is there anything you can expand on about that?
Yeah.
More interest in our conversational agents. I think people like that.
Yeah. Absolutely. So I kinda went through a very simple example today, but I can kind of give you some insights on what we've seen out in the field, what our customers are using. So our cost of goods model was relatively straightforward for today's webinar, but we have some clients out there that are actually driving that off of inflationary metrics as well as tariffs by vendor.
So in short, they're tracking vendor by their location on the globe, what the latest tariff projections are there, and then using that conversational AI model to say, hey. If we move x y z vendor from come from country a to country b, what is their new COGS gonna look like assuming everything stays the same except for tariffs? And just like that, you can quickly get your answer. Some folks are a little more traditional.
They like playing with that in Excel.
I'm getting more and more comfortable just chat chatting with the bot right in the web portal now. I think I'm using it more and more every day, saving me time. But the short answer is it can help you, and you can make it as complex as your business needs. For some folks, that's a little too much. It's a little too granular, but you can incorporate any of these factors into your model. You could ask it about interest rate projections, capitalization flow, depreciation over time, so on and so forth.
Awesome. Thank you. A follow-up to that immediately, does AI analysts, work on actual data and point out which product sales better or worse? Not just for something like budget purposes, but for a monthly financial reporting purpose?
Yes. Absolutely. So in our example today, I teed it up to focus in and hone in specifically on our budget, but you could do the exact same thing for your actual. Say, hey. In q one of this year, can you rank my products by gross margin from highest to lowest? Is anything changing dramatically quarter over quarter?
Things like that are very common questions we see in our day to day.
Okay. Perfect. Now we may have a few folks on the call who haven't attended our annual planning one or two, webinar series, where we kind of went into depth about version control and what that looks like. So in regards to stakeholder engagement and how we can provide version control, what does that look like in queue, and how can we keep things safe and for certain people's eyes only?
Yeah. So we have comprehensive access and security control. So in short, basically, by user you or by user group, if that's a little easier for you to manage. You can say, hey.
The HR team, they can only look at HR data. They're not allowed to make, any they're not allowed to view anything in the finance or maybe the sales team, or you have some read only users. Hey. You can read data across the whole organization, but you're only allowed to make edits in the marketing department.
More specifically, if you have sales territories, maybe you have a sales manager, you want them to make edits in the southwest. They can only view the northeast.
Building on that, you could also do it by scenario. I have a baseline forecast. I'm locking that down to be read only. Then I can open up my team to use that as a copy to see their what if scenarios, version two, three, four, five.
We see a lot of people using that to then you have many different analysts or maybe yourself. You just you know, throughout the week, you have different what if scenarios. You can then take, hey. I like this part of version five, this part of version two, merge them back into the master scenario, and then iterate from there.
So I guess to summarize, you can set anything to read or write based on each person and then each cut of the organizational data.
Okay. As a follow-up to that We had someone ask how they could limit which budget versions others can write back to.
Yeah. So you could basically set it up. So each user, hey. I want this user to be able to read every budget, but they can only write to butt working budget or budget v two. They can't change these ones or whatever it may be. And it's just click of a button, read only, writable, etcetera.
That makes sense. In regards to what if scenarios, can multiple people create their own what if scenario in queue?
Absolutely. So as long as you set those permissions up and allow that user to be able to create scenarios, Normally, what we see is we'll have that baseline forecast. That's gonna be our starting point. We don't want anyone to edit that, but we'll allow anyone to create a copy of that and then use that to iterate on their own what ifs.
Okay. Wonderful.
We don't have any more questions in the chat, so I'm just gonna go ahead and wrap up sharing some resources and do a little bit of a deeper dive into, what our next webinar is gonna be. Thank you so much for presenting, Chris. So, again, everyone, we've got our headcount planning webinar, on October twenty second. So I hope I'm not triggering any budget season anxiety or anything like that for anyone on the call, but who knows?
Are we gonna hire more people next year? If you want to learn how to headcount plan, without the migraine that it might provide you, join us for that webinar. We also have our planning and cute guide on our website. We welcome you to subscribe to our finance fix newsletter, from our serial, CFO turned CEO, Christina Ross, and then we've also got a link to the help center.
And as always, I wanna remind everybody this call was being recorded, so everyone is gonna have access to this recording, to our deck, all of these resources.
And if you're new to joining us for webinars, we're so happy that you stopped by. We will be sending out annual planning one and two in case you missed that as well. So now you can have the full annual planning in cube series, at your disposal.
So thank you guys so much for joining, and happy planning. We hope to see you soon.
Thank you, everybody.
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